TELEPHONE; TAXATION (GENERAL); PUBLIC UTILITIES;

UTILITIES - TELEPHONE; TAXATION;

You asked for description of state and federal taxes and fees that apply to wireless telecommunications services. OLR memo 99-R-1070 describes fees that apply to wireline (traditional telephone) service. All of the taxes and fees that apply to wireless service also apply to wireline service, although some fees apply to the latter and not the former.

STATE

Wireless and wireline services are subject to the state’s 6% sales tax. The tax also applies to sales of telephones and related equipment. Both types of service are also subject to an E-911 fee, which covers the costs of upgrading and operating the state’s emergency telecommunications service. The charge varies by the number of lines a customer has, and is capped by law at $ 0. 50 per month for the first line.

Wireless customers may also be charged a fee for the Connecticut Service Fund, which supports the state’s Lifeline and Telecommunications Relay Service programs. The former subsidizes telephone service for low-income customers and the latter provides equipment and services to allow hearing-impaired people to use the telecommunications network. Telephone companies are assessed to

provide funding for these programs, and may pass on these costs on a pro rata basis to the wireless carriers that use their networks. (SNET does not pass on these costs; Verizon, which serves part of Greenwich, does. ) The wireless carrier, in turn, may itemize these charges on customers’ bills.

FEDERAL

Most telecommunications services are subject to a 3% federal excise (sales) tax. In addition, there is a monthly charge of $ 0. 55 per line that goes to the Universal Service Fund. This fund subsidizes service for schools, libraries and rural health-care facilities. It also subsidizes services for low-income individuals and customers in rural areas, which are more costly to serve than urban and suburban areas.

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