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Taxes, and where they go:


The following is a list of frequently asked questions that we believe are important to consumers.  These charges are applied to your monthly invoice based on the type of service you have and your geographical location:


What is the Federal Excise Tax?
Telephone services are subject to a 3% Federal Excise Tax. This tax is collected by Clear Rate and remitted to the Internal Revenue Service. Exemption under the income tax laws does not necessarily qualify you for exemption under the excise tax laws.


Why do I pay State and Local Taxes on my phone service?
States, counties, cities, and special taxing districts assess sales tax on goods and services sold in Michigan. These taxes are usually assessed at 6% of the total price of goods or services sold.  Applicable taxes are collected by Clear Rate and remitted to the jurisdiction that is assessing the tax.

What is the E911 Emergency Surcharge?
This charge is imposed by State and Local governments to help pay for emergency services such as Fire, Police, and Rescue services.  These funds are distributed to your Local and State emergency providers

What are Federal Access Charges?

After the break-up of the Local and Long distance Telephone Monopolies in 1984, the FCC allowed local telephone companies to charge a fee to recover the cost of operating the local telephone network, and to promote competition in the telecommunications industry. Clear Rate Communications contributes to the operational cost of maintaining these networks through the Federal Access charge.


What are State Access Charges?

This charge is imposed by the States’ Public Service or Utility Commissions to provide communications to rural areas via the local telephone network.  Clear Rate Communications contributes to the rural operational cost through the State Access charge.


What is the Universal Service Fund Surcharge?
All telecommunications providers are required to contribute to the Universal Service Fund. The Universal Service Fund subsidizes programs for schools, libraries, and rural and low income health care providers. Clear Rate contributes to the USF through a monthly surcharge. 
The FCC imposed a fee of 9.92% USF (Universal Service Fund) to be charged on all interstate and international calls.


What is the Local Number Portability Fee?

The FCC allows local phone companies to recover the cost of providing business and residential customers the ability to retain their phone number when switching from one local provider to another.


What is the Telephone Relay Service Surcharge?

The Telecommunications Relay Service Fund (TRS Fund) charge supports the service that enables speaking and/or hearing-impaired individuals to communicate over the telephone network. Under Title IV of the Americans with Disabilities Act (ADA), all telephone companies must provide relay services free of charge to users either directly or through state programs throughout the 50 states, the District of Columbia, Puerto Rico, and all of the U.S. territories. All telephone subscribers are billed one TRS Fund charge per phone line whether a household uses the service or not. This charge varies by state and is also known as the Telecommunications Access System Act Surcharge, the Telecommunications Relay Service Surcharge or as compliance with the Americans With Disabilities Act.