Communication Services Tax · United StatesSelling voice or VoIP service into Florida brings a tax of its own. Most other states have telecom charges too.
We register providers for Florida’s Communications Services Tax, prepare the monthly DR-700016 return, and map the other telecom taxes and fees your service triggers.
Tax
At a glance
- Authorities
- Florida Department of Revenue · State revenue departments and 911 authorities · Universal Service Administrative Company (USAC) · Federal Communications Commission (FCC)
- Forms & references
- Florida Form DR-1Florida Form DR-700016FCC Form 499-AFCC Form 499-Q
- Administered by
- Florida Department of Revenue
- Florida state portion
- 7.44% at the time of writing, plus local rates that vary by jurisdiction
- Return
- Form DR-700016, monthly; due the 1st, late after the 20th
- Also relevant
- State and local 911 fees, state USF charges and federal USF contributions (FCC Form 499)
Overview
What it is, and why it matters.
In the US, “communications services tax” usually means Florida’s Communications Services Tax (CST). It replaced sales tax and several other state and local charges on telephone, VoIP, cable and satellite services with a single tax administered by the Florida Department of Revenue. It has a state portion, made up of the state CST and a gross receipts tax, and a local portion whose rate depends on the customer’s service address.
At the time of writing, the state portion totals 7.44% (4.92% state CST plus 2.52% gross receipts tax), and local rates vary by city and county. Providers register with the Department, collect the tax from customers and file Form DR-700016 each month. Returns are due on the 1st and late after the 20th of the following month.
Outside Florida, telecom and VoIP providers face a patchwork of their own. Some states have telecom-specific taxes (Virginia, for example, has a communications sales and use tax), most states and many localities charge 911 or E911 fees, and some run state universal service funds. At federal level, providers contribute to the Universal Service Fund through FCC Form 499 filings, covered under FCC Filing.
Who needs it
Who typically needs it.
- 01
VoIP providers
Businesses selling hosted PBX, SIP trunking or business phone service to customers with Florida service addresses, and in other states.
- 02
Telecom resellers and MVNOs
Companies reselling wholesale voice or wireless service under their own brand, which makes them the retail seller responsible for tax.
- 03
CPaaS and cloud communications platforms
Providers of programmable voice, messaging and phone numbers, where the tax treatment of each product can differ by state.
- 04
Prepaid calling and prepaid wireless sellers
Businesses selling prepaid service, which often has point-of-sale 911 fee rules and its own sourcing rules.
- 05
Foreign telecom companies entering the US
Operators from Pakistan, the UK and elsewhere adding US customers and working out which state and federal charges apply.
When you need it
The moments that usually trigger it.
- You’ve started selling voice or VoIP service to customers with Florida service addresses.
- You’re launching a US telecom product and need to know which taxes and fees belong on the invoice.
- The Florida Department of Revenue has contacted you about unregistered sales.
- Your wholesale supplier has asked for a resale certificate or started charging you tax.
- You’re unsure how to split revenue between interstate, intrastate and international for tax and USF purposes.
- You’re buying or selling a telecom business and need to understand its tax position.
Scope
Exactly what we handle.
Our engagement letter lists these specifically, so you know what is included before any work begins.
- 01
Reviewing your products and customer locations to identify Florida CST and other state and local telecom tax obligations.
- 02
Registering with the Florida Department of Revenue for communications services tax on Form DR-1.
- 03
Preparing and filing the monthly Florida DR-700016 return, including local tax by jurisdiction.
- 04
Checking that customer service addresses are assigned to the correct local jurisdiction, using the Department’s address database or another accepted method.
- 05
Mapping state 911 and E911 fees, state universal service charges and other telecom surcharges in the states you serve.
- 06
Reconciling the tax charged on invoices with the amounts filed and paid.
- 07
Coordinating federal USF reporting on FCC Forms 499-A and 499-Q so it uses the same revenue data.
- 08
Working with your billing platform or tax engine so the right charges appear on customer bills.
The process
How it runs, step by step.
Timings depend on the authority and on how quickly documents come together. We tell you what’s typical for your case at the start.
Start with a conversationProduct and customer review
We look at what you sell, how it is delivered and where your customers’ service addresses are.
Obligation map
We list the taxes and fees that apply by state and locality, including Florida CST, 911 fees and USF.
Registration
We register you with the Florida Department of Revenue and with other states where required.
Billing set-up
We check that your billing system or tax engine applies the right rates and sourcing.
Monthly filing
We prepare and file DR-700016 and other returns from your billing data and reconcile the amounts.
What we’ll need
The information to have ready.
A typical checklist. After the first conversation we send a version specific to your situation, so you don’t gather anything you don’t need.
Business and product details
- A description of each service (hosted voice, SIP trunks, numbers, messaging, bundles)
- Wholesale suppliers and resale arrangements
- FCC Registration Number (FRN) and Form 499 Filer ID, if you have them
Billing data
- Revenue by customer service address and by month
- Sample invoices showing the taxes and fees currently charged
- Billing system or tax engine reports
Existing registrations
- Florida and other state tax account numbers
- Prior returns and any notices
Please don’t email passports or bank statements. Once we’ve spoken, you’ll get access to a secure upload.
Common mistakes
Where this usually goes wrong.
The problems we are most often asked to fix, and what they tend to cost.
- Mistake 01
Charging Florida sales tax instead of CST
Communications services sold in Florida are generally taxed under the CST rather than the ordinary sales tax. Charging sales tax usually means collecting and filing under the wrong regime.
- Mistake 02
Assigning local tax to the wrong jurisdiction
Local CST follows the customer’s service address. Relying on ZIP codes alone can place customers in the wrong city or county, leading to underpayment or overcharging.
- Mistake 03
Treating a bundle as a single product
When taxable and non-taxable services are sold together, the whole charge can become taxable unless the non-taxable part is separately identified in the way the state requires.
- Mistake 04
Keeping tax and USF data in separate silos
Revenue reported to the Florida Department of Revenue, state 911 authorities and USAC should reconcile. Inconsistencies commonly prompt questions from any of them.
Worth knowing
The limits, stated upfront.
Whether a service is taxable can depend on its technical and legal classification. We do not give legal advice on regulatory status, and complex classification questions may need telecom counsel.
Rates and local jurisdiction assignments change. We use the Department’s current published rates for each filing.
State and local 911 fees and utility users taxes vary widely; the states and localities covered are agreed at scoping.
We are not affiliated with the Florida Department of Revenue, USAC or the FCC.
Questions
Communication Services Tax: frequently asked.
If yours isn’t here, ask us directly. We’ll answer in plain terms.
Ask a questionIs communications services tax a federal tax?
No. The term usually refers to Florida’s Communications Services Tax, a state and local tax administered by the Florida Department of Revenue. At federal level, telecom and VoIP providers instead contribute to the Universal Service Fund through FCC Form 499 filings.
Does Florida’s CST apply to VoIP?
Generally, yes. Florida’s definition of communications services is broad and covers voice-over-internet services as well as traditional telephone, cable and satellite services, while internet access itself is not taxed. Particular products can be treated differently, so we review each one.
What is the current Florida CST rate?
At the time of writing, the state portion is 7.44% (the 4.92% state CST plus 2.52% gross receipts tax), and each local jurisdiction adds its own rate. Direct-to-home satellite service is taxed differently. We use the Department’s current published rates for each return.
When is the Florida CST return due?
Form DR-700016 is filed monthly. Returns are due on the 1st and late after the 20th of the month following the reporting period, and the date moves to the next business day when the 20th falls on a weekend or holiday.
What other taxes and fees should a VoIP provider expect?
Common charges include state and local 911 or E911 fees, state universal service fund surcharges, telecommunications relay service fees, some state telecom excise or gross receipts taxes, and federal USF contributions. Which ones apply depends on the states you serve and how your service is classified.
We only sell wholesale. Do we collect CST?
Sales for resale are generally not taxed, provided you hold the documentation Florida requires, such as a valid resale certificate from your customer. The retail provider then collects from end users.
Related
Often needed alongside this.
Speak with a consultant
Talk to us about communication Services Tax.
Pick the closest match and we’ll take it from there. You’ll get a written scope and fee before any work begins.
Or use our three-step guide, or email hello@fiscorra.com
