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Understanding Taxes, Surcharges, and Fees

The following is a list of charges that may be applied to your monthly invoice depending on the type of service you have and your geographical location. Because taxes and surcharges differ by state and services provided, you may find some variation of the following charges on your bill.

Amounts paid for local telephone service are subject to a 3% federal excise tax. This tax is collected by Clear Rate and remitted to the Internal Revenue Service. Bundled local and long distance telephone service provided under a plan that does not separately state the charge for the local telephone service is exempt from federal excise tax.

States, counties, cities, and special taxing districts all may assess sales tax on goods and services sold in a particular state. Applicable taxes are collected by Clear Rate and remitted to the jurisdiction that is assessing the tax.

This charge is imposed by state and local governments to help pay for emergency services such as fire, police, and rescue. These funds are distributed to your local and state emergency responders.

The USF supports telecommunications services in schools, public libraries, and rural healthcare facilities. The fund also subsidizes local service to high-cost areas and low-income consumers. The Federal Communications Commission (FCC) regulates this charge and customers pay a monthly, per-line surcharge to recover local companies’ contributions to the Fund. This fee helps keep local telephone rates affordable for all consumers.

The Telecommunications Relay Service Fund (TRS Fund) supports a service that enables speaking- and/or hearing-impaired individuals to communicate over the telephone network. In compliance with the Americans with Disabilities Act, all telephone companies must provide relay services free of charge to users. Federal law also requires that all telephone service subscribers pay one TRS Fund charge per phone line regardless of whether you use the service or not.

The Federal Communications Commission 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.

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, promoting competition in the telecommunications industry. Clear Rate contributes to the operational cost of maintaining these networks and assesses this fee to recover a part of that cost. This fee may appear on your bill as the “FCC Authorized Line Charge”.

This is a monthly surcharge telecommunications carriers are permitted to assess in order to defray the following: a portion of the costs to terminate calls on other networks; fees paid to support government programs such as TRS and Local Number Portability; other charges assessed by the FCC; and, additional indirect costs associated with administering and complying with government programs. Rates vary from company to company, as do the names given for this charge.

Local government agencies may require Clear Rate to collect funds for different purposes and these amounts vary by state and surcharge. Any miscellaneous surcharges or fees will be listed individually on your bill if they apply to your area.