On July 1, 2021 Zoom will begin passing through the Federal Universal Service Fund (USF) charge, as well as various state USF and city excise charges on Zoom Phone services.
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The Federal Universal Service Fund (FUSF) is a federal program created by Congress to help ensure telecommunications services are available to all consumers within the U.S. The FUSF supports the provision of communications services in rural and high-cost areas, income-eligible consumers, and to support access to communications for schools, libraries, and rural health care providers. The FUSF is administered by the Federal Communications Commission (FCC) and the Universal Service Administrative Company (USAC). The FCC requires all regulated telecommunications providers, such as Zoom, to contribute to the FUSF based upon a percentage of their interstate and international end-user telecommunications revenues.
Regulated telecommunications providers that contribute to the program are permitted to recover these FUSF contributions from their customers through FUSF recovery charges. The FUSF recovery charges are discretionary charges that the FCC allows and is not a tax. Zoom, as a contributor to the FUSF program, is permitted under FCC regulations to recover the FUSF through an invoice pass through charge to all customers that are purchasing regulated telecommunication services. Zoom is permitted to this recovery for all customers, including those that may be sales tax exempt, except for customers that are a telecommunications service provider that pays FUSF contributions directly to USAC.
The FCC, which regulates all telecommunications companies, set up the Universal Service Fund in 1997. All communication companies that provide service between states contribute a percentage of the total amount they bill to the fund. This includes providers of VoIP services. As a communications company, Zoom Voice Communications contributes to this fund, and we recover our cost in the form of this charge, as allowed by the FCC. You can find more information about the Federal USF on the FCC website.
Zoom may also be required to contribute to State Universal Service Funds (SUSF). The funds may be used to assist in providing universal service and to support a variety of other programs at the state and local level. Zoom recovers applicable charges from its end-user customers. These charges are permissible pass-through surcharges but are not taxes or charges mandated by the government. Currently Zoom is collecting State USF in 15 states, which is subject to change.
Certain states also require contributions to their State Telecommunications Relay Services (TRS) Funds or their user utility fees to offset the cost of providing local transmission services that provide hearing or speech challenged individuals with the ability to use certain communications services. Many states require Zoom to remit this fee to the governing authority. Zoom recovers applicable fees from customers and remits them to the relevant authorities.
In general, all regulated interstate communications services purchased in the U.S. are subject to the Federal USF. While the Federal USF is remitted by Zoom and other regulated communication providers to the FCC, Zoom is permitted to pass through these charges through line item charges to end users.
Zoom will charge the Federal USF and any applicable State USF/local excise tax on Zoom Phone services at the time of invoicing. The USF will be included on the invoice and as a separate identifiable charge.
No, as of July 1, 2021, all government, schools, non-profits, and other tax-exempt customers will have the Federal USF passed through to their bill. Under FCC rules and policies, only telecommunications service providers (including resellers) that pay Federal USF contributions directly to USAC are typically exempt from paying the Federal USF charges to underlying providers such as Zoom Voice Communications.
Like other regulated communication providers, Zoom is following FCC regulations which provides that the Federal USF may be recovered through interstate telecommunications-related line-item charges from the end user. Likewise, the state and local communication charges we apply are recoverable from the end user and are typically applied to intrastate service and will appear as a separate identifiable charge on future invoices.
Zoom United bundles comprise video conferencing services, our core Zoom services, and Zoom Phone. It is important to note that our Zoom Phone products are taxed differently than our core Zoom services because Zoom Phone products are generally subject to additional regulatory fees and assessments such as the federal and State Universal Service Fund (“USF”) as an interconnected VoIP product.
However, because Zoom United has one single price, the cost of the bundle must be allocated between our core Zoom services and Zoom Phone products in order to accurately calculate and apply all relevant taxes and fees. It is also important to note that ONLY the portion of Zoom United allocated to Zoom Phone is subject to the Federal and State USF charges. Taxes and fees are automatically calculated based on the aforementioned allocations and are listed as separate line items on your invoice.
Zoom uses the customer-provided sold-to address to determine the sourcing of a sale. The Federal USF, State USF and any applicable state and local fees will be charged when the customer’s sold-to address is in an applicable U.S. jurisdiction and they are purchasing Zoom Phone services.
Currently the purchase of Zoom Phone Pro, which requires that the customer maintain their own phone carrier, will not be subject to Federal and State USF.
If you still have any questions, please reach out to Billing by chat.