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.
For all exemption certificates, please submit your exemption certificate for our tax experts to review. Upon approval of your exemption certificate, all applicable taxes that are eligible for exemption will be refunded or credited to you.
If you have any additional questions, please chat with us mentioning “Tax”.
Zoom collects 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 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.
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.
Zoom collects the 9% Prince Georges County 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.
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.
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.
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 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, 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.