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State telecom taxes Follow

Overview

Like many technology companies, Zoom is routinely evaluating its tax collection and remittance obligations. The application of state telecom taxes to businesses like Zoom that offer new types of technologies is a complex and evolving area. 

Telecom taxes may be imposed by state, local, and municipal governments on goods and services, including phone services (i.e., telecom). In addition, federal, state and local governments may impose regulatory charges on providers of certain communications or telecommunications services, including interconnected VoIP service like Zoom Phone.

Zoom continues to review the products and services we sell, as well as the nature and extent of its activities in different jurisdictions. Based on such reviews, Zoom will implement tax changes from time to time to stay compliant with all government regulatory and tax requirements. These tax changes described below are expected to go into effect on or shortly after November 1, 2020. If you have any questions regarding the tax changes below, please submit a support ticket to Zoom and we will get back to you.

California

Zoom will begin collecting the California Utility User Tax (UUT) and Communication User Tax (CUT) in applicable counties and cities within California. Zoom has reviewed the UUT and CUT requirements and determined that these taxes should be charged to our customers on the sales of Zoom Phone services and most conferencing services. These taxes are levied on all residential and business customers for the purchase of services that include communication services where the sold to address is within one of the 150+ cities and counties that impose a UUT or CUT. 

The tax rate imposed on communication services differs from city to city and will range from 0.5% to 11%. California does not provide for any tax exemption that a customer can claim specifically against these taxes unless they can demonstrate that the imposition of the taxes would be in violation of a federal or state statute, the Constitution of the United States, or the Constitution of the State of California. If you have any questions regarding this tax change, please submit a support ticket to Zoom and we will get back to you.

For additional information about the California UUT/CUT, please refer to the California City Finance website. For general information about the California UUT/CUT tax rates, please refer to the Excel spreadsheet that is hosted and maintained by the California City Finance website.

Maryland

Zoom will begin collecting the 9% Prince Georges County sales tax and the 8% Baltimore City sales tax on communication services. These taxes are levied on all residential and business customers for the purchase of telecommunication services where the sold to address is within Prince Georges County or Baltimore City.

The offering of all conferencing services whether done by audio or video and all Zoom Phone products, except for Zoom Phone Pro (formerly referred to as BYOC), will be subject to this tax. Since this is a sales tax, any valid Maryland sales tax exemption will be extended to apply a tax exemption against these taxes. 

If you qualify for a Maryland tax exemption, you may submit your certificate for review and approval through our exemption certificate portal. The exemption certificate portal will request your Billing Support Ticket Number. Please submit your Billing Support Ticket Number as New MD Tax along with your email address and Zoom Account Number for the exemption to be applied to your account. 

Once you have input this information, you will be directed to select the applicable exemption certificate to complete. The website will provide guidance on what information needs to be completed and will allow you to sign the form electronically for Zoom’s review and approval.  You will also be given the option to upload your exemption certificate rather than completing the online form. 

Once your exemption certificate has been submitted, you may be contacted by email to provide additional information for its completion. Our team will review your exemption and if approved, your account will be updated to be tax exempt. 

Please be advised that due to heavy volume of tax exemption requests, it may take several weeks for Zoom to complete its review of your exemption certificate.  We appreciate your patience and continued business. 

New York City

Zoom will begin collecting the 2.35% New York City Utility Tax on the sale of Zoom Phone and audio and video conferencing products. These taxes are levied on all residential and business customers for the purchase of communication services where the sold to address is within New York City which includes the five boroughs of Manhattan, Brooklyn, Queens, the Bronx, and Staten Island. If you are outside of this area, you will not be impacted by this change.

The New York City Utility Tax does not provide for any tax exemption unless the customer can demonstrate that the imposition of the taxes would be in violation of a federal or state statute, the Constitution of the United States, or the Constitution of the State of New York.  

Virginia

Zoom will begin collecting the 5% Virginia Communications Sales Tax (“CST”) on the sale of all Zoom Phone products except for Zoom Phone Pro (formerly referred to as BYOC). The CST telecommunication will be charged to all residential and business customers for the purchase of Zoom Phone products where the sold to address is within the State of Virginia.

The CST collected by Zoom will be remitted to the State of Virginia and will support the Virginia Relay Center, a telephone relay service for the hearing impaired, as well as other similar programs in Virginia cities, towns, and counties. 

Virginia sales tax exemption forms previously provided by the Commonwealth of Virginia, any political subdivision of the Commonwealth, and the federal government and any agency or instrumentality of the federal government will also extend to the CST. However, Virginia sales tax exemption forms provided by all other customers will not extend to the CST. The exemption from the CST is very narrow and can only be considered if you are purchasing Zoom Phone services for resale or are a provider of Internet access service. 

If you meet one of these criteria, you will need to provide a completed Virginia Form CT-10; Communications Sales & Use Tax Exemption. Please submit your CT-10 certificate for review and approval through our exemption certificate portal. The exemption certificate portal will request your Billing Support Ticket Number. Please submit your Billing Support Ticket Number as New VA Tax along with your email address and Zoom Account Number for the exemption to be applied to your account. 

Once you have input this information, you will be directed to select the applicable exemption certificate to complete. The website will provide guidance on what information needs to be completed and will allow you to sign the form electronically for Zoom’s review and approval.  You will also be given the option to upload your exemption certificate rather than completing the online form. 

Once your exemption certificate has been submitted, you may be contacted by email to provide additional information for its completion. Our team will review your exemption and if approved, your account will be updated to be tax exempt. 

Please be advised that due to heavy volume of tax exemption requests, it may take several weeks for Zoom to complete its review of your exemption certificate.  We appreciate your patience and continued business.