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Verizon Partner Solutions \
Doing Business \
Local Billing for Verizon East
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Taxes & Surcharge Information
Verizon West
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Verizon North & South |
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This section is intended as an overview of the various taxes, regulatory surcharges and fees applicable to telecommunications service that are administered by federal, state and local tax authorities within the Verizon-East territory.
Each CLEC is responsible for billing, collecting and remitting the appropriate taxes, regulatory fees and surcharges (federal, state and local) applicable to resold or unbundled products and services from its end-users. Verizon strongly recommends that each CLEC consult with its own professional tax advisor for advice in order to properly account for its particular needs and requirements.
It is the CLEC's responsibility to claim any exemption to which it may be entitled. If the customer incorrectly fails to identify himself as tax exempt, then Verizon is legally required to collect the tax and remit it to the tax authorities and customer should file claim for refund directly with the appropriate federal, state and local tax authorities.
The following taxes may be applicable to Reseller or UNE charges on CLEC bills:
- Federal Excise Tax (FET)
- State Sales Tax - All Verizon East states except New Hampshire,
Delaware, Virginia and West Virginia
- Communication Services Tax - New Hampshire only
- Local Consumer Utilities Tax - Virginia only
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Federal Excise Tax (FET) |
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Each CLEC must collect Federal Excise Tax for its end-user customers and remit the collected tax to the federal government, as required by the applicable provisions of the Internal Revenue Code and Treasury Regulations.
In order for the CLEC to purchase service from Verizon without
paying FET, the CLEC must provide Verizon with an appropriate
exemption certificate, which indicates that the CLEC is not the
final customer, but reselling the service (Check off Box 6, Form
2506-11 Verizon's "Federal Excise Tax on Telecommunication Services
Exemption Certificate").
Federal tax exemption will be reflected on a CLEC's bill within 30 days of Verizon's receipt of a valid exemption certificate.
In the absence of a Federal Excise Tax exemption certificate, Verizon must continue to collect the FET.
If a CLEC is exempt from Federal taxes only, any applicable state and local taxes would be calculated based on before-tax charges.
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State and Local Taxes |
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Sales Tax on Tangible Personal Property
Delaware and New Hampshire do not impose a state sales tax.
For all other states: In the event that "tangible personal property is purchased from Verizon, the Reseller/CLEC would have to provide a Resale Certificate in order to have the tax suppressed from the bill, and that tangible personal property (i.e. telecommunications equipment) would have to be resold in order to be tax-exempt.
Sales Tax on Telecommunication Services
Wholesale accounts are not subject to state sales tax on telecommunications service in the following states: Delaware, Virginia, West Virginia and New Hampshire. Delaware and New Hampshire do not impose a state sales tax. New Hampshire does, however, impose a Communications service tax. Virginia and West Virginia do not impose state sales tax on telecommunications service. The state of Maine does not impose state sales tax on Unbundled Network services.
In order to suppress the various state and local taxes in the Verizon East territory, the following certificates are required.
Table 1: Certificates Required by State
| State |
Item Required for Exemption |
Form Number |
Update Needed |
| CT |
State Resale Certificate |
No number on form |
Every 3 years |
| MA |
State Resale Certificate |
ST-4 |
None |
| ME |
State Resale Certificate |
ST-P-69 |
None |
| NH |
Certificate of Resale |
RP-138 |
None |
| NY |
State Resale Certificate |
ST-120 |
None |
| RI |
State Resale Certificate |
No number on form |
Every 3 years |
| VT |
State Resale Certificate |
S-3 |
None |
| NJ |
State Resale Certificate |
ST-3 |
None |
| PA |
State Exemption Certificate |
Rev 1220 |
None |
| DE |
No sales tax |
N/A |
N/A |
| MD |
Resale Certificate |
No form provided by the state |
None |
| DC |
Certificate of Resale |
FR-368 |
None |
| VA |
No sales tax on telecommunication services |
N/A |
N/A |
| WV |
No sales tax on telecommunication services |
N/A |
N/A |
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NOTES: The Multistate Tax Commission provides
a "Uniform Sales and Use Tax Certificate Multijurisdiction" that
can be submitted in place of the individual state certificates
for all states in the Verizon East territory except Massachusetts,
New Hampshire or New York.
If the CLEC/Reseller that has given a resale certificate to Verizon, itself consumes some of the telecommunications services that it has purchased tax free under the resale certificate, CLEC/Reseller must file use tax returns and pay tax on the sales price of the telecommunications that it consumes.
Maine Unbundled Network Services in the state
of Maine are not subject to state sales tax. CLECs purchasing
only UNE products from Verizon would not be required to provide
the Maine Resale Certificate in order for their UNE bills to be
state sales tax exempt.
Maryland Resale Certificate (COT/ ST 103) or
Multi-State Tax Commission Resale Certificate is only required
to suppress the following taxable services in MD:
- cellular telephone or other mobile telecommunication service
- custom calling services provided in connection with basic telephone service
- telephone answering services
- pay per view television service and
- a prepaid telephone calling arrangement (effective January 1, 2000)
Maryland state sales tax is always applied to Audio Text services (ie "900", "976" - type telecommunication services) even is a valid resale certificate is provided and the account is MD sales tax-exempt.
Virginia Local Consumer Utilities Tax (LCUT)
A sworn affidavit is required from the CLEC to suppress the Local Consumer Utilities Tax (LCUT) on their wholesale bills. Without a sworn affidavit, Verizon-Virginia will apply LCUT to the customer's wholesale bills (Va. Code . 58.1-3812(J)-Taxable Purchases). If a valid Federal Excise Tax exemption certificate is submitted by the CLEC operating in the state of Virginia, this may serve as the sworn affidavit and the LCUT will be suppressed on their Virginia Resale or UNE bills.
In the absence of a State Resale or exemption certificate, Verizon must continue to collect the applicable state and local taxes.
If a CLEC is exempt from state and local taxes only, any applicable Federal taxes would be calculated based on before-tax charges.
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Surcharges |
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There are certain surcharges that are suppressed from Resale and UNE bills, and others that will bill. Some surcharges will bill at a discounted rate, if certain documentation is provided to Verizon.
In the state of New York, there are some surcharges that may bill if the CLEC does not provide Verizon with a New York State Resale Certificate. These are as follows:
- NY State surcharge (NY Gross Receipts Tax surcharge)
- MTA surcharge (Metropolitan Commuter Transporation District Tax Surcharge)
- Municipal surcharge, for Local Utility Gross Revenue Taxes (MUTS)
If the CLEC has provided Verizon with a New York state Resale Certificate and a copy of their NY Certificate of Public Convenience and Necessity (CPCN) approval letter, their wholesale accounts should be "surcharged at the wholesale rate." The following discounted surcharges will always be billed on fully-exempt NY Resale and UNE accounts.
NY State Gross Receipts Tax surcharge
- Resale bills The NY State surcharge will
bill in accordance with PSC NY No. 9 (915) Resale Services,
Section 6.3.6, which refers back to PSC NY No. 1 (900) General
Tariff, Statement No. 2.
- UNE- and UNE-related bills This surcharge
will bill in accordance with PSC NY No. 10 (916) Network Elements,
Section 18.1.1.
M.T.A. Surcharge
- Resale bills The MTA surcharge will bill
in accordance with PSC NY No. 9 (915) Resale Services, Section
6.3.6, which refers back to PSC NY No. 1 (900) General Tariff,
Statement No. 3.
- UNE- and UNE-related bills This surcharge
will bill in accordance with PSC NY No. 10 (916) Network Elements,
Section 18.1.2.
NOTE: The MTA surcharge is only applicable to end-user accounts in specific counties (New York City Counties, Dutchess County, Bronx County, Nassau County, Kings County, Orange County, New York County, Putnam County, Queens County, Rockland County, Richmond County, Suffolk County, Westchester County).
The following surcharges are applicable on Resale and UNE accounts, regardless of the exemption paperwork provided to Verizon:
- Local Number Portability (LNP) surcharge
- District of Columbia's Right of Way Use fee
- Federal Subscriber Line Charge (FSLC)
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