VoIP Mapping Guidelines

Safe Harbor

There are three accepted methods for collecting/reporting interstate and intrastate VoIP revenue for regulatory purposes. The first two are compatible (but not exclusive) to bundled selling; the third is not compatible with bundled selling:

Mapping Information: Transaction Types

AvaTax for Communications supports taxation for three different types of VoIP service, all with unique transaction types: Non-Nomadic or Fixed Location VoIP; Nomadic VoIP; and Non-Interconnected VoIP. As a starting point, users will need to determine which transaction type(s) is appropriate for the category of VoIP services they are offering.

Non-Nomadic or Fixed Location VoIP service is typically tied to a particular physical and/or IP location and may only make a VoIP connection from the location recognized by the subscriber’s Internet Service Provider (ISP) as the subscriber’s service location. These services should use Transaction Type 19 or 20 (VoIP or VoIPA). VoIP and VoIPA (VoIP Alternative) were set up to accommodate the differences in VoIP taxation theories as various jurisdictions formulate their VoIP policies. Where a jurisdiction clearly declares its intent to tax VoIP services, AFC applies tax to the corresponding service types in both VoIP and VoIPA. If a jurisdiction clearly does not tax a particular VoIP service, AFC will not return tax in either VoIP or VoIPA transactions. If it is unclear that a jurisdiction intends to tax a VoIP service, AFC applies tax to the VoIP services, and does not apply tax to the VoIPA service.

Nomadic VoIP service typically utilizes a phone adapter or software application that may be moved from location to location to connect the calling phone to the internet from any location in the world where a broadband internet connection is available. In reverse, this would also allow any caller to automatically locate and reach a nomadic VoIP subscriber anywhere in the world by calling the VoIP user’s phone number, as long as the user’s VoIP adapter or software-enabled device is connected to a broadband internet connection. This service should use Transaction Type 59 (VoIP- Nomadic).

Non-Interconnected VoIP is sometimes referred to as “peer-to-peer” VoIP and often limits users to calls with other users of the same service/protocol and does not offer the ability to make and receive calls from the Public Switched Telephone Network (PSTN). This service should use Transaction Type 65 (Non-Interconnected VoIP).

Mapping Information: Service Types

The following table represents service types that are used for VoIP (19), VoIPA (20) and VoIP-Nomadic (59) transaction types. Those that are valid with Non-Interconnected (65) as well are marked with an asterisk (*).

E911 and other Per-Line Taxes

Many jurisdictions have different rates or reporting requirements for landline, wireless and VoIP services. For this reason, there will be jurisdictions where the VoIP tax type applies and other jurisdictions where an unspecified E911 applies. Non-Interconnected VoIP services are not typically subject to 911 compliance as these types of services do not ordinarily provide 911 functionality. Thus Non-Interconnected VoIP services are not submitted with line count transactions. For fixed location and nomadic services, in order to ensure that appropriate per line taxes are returned, users must submit at least one line count transaction with line quantity data. For single channel lines, Lines (service type 21) is appropriate. Additionally, using Wireless Lines (service type 52) will produce the wireless rate when it differs from the standard rate.

For customers using trunks (PBX or PBX High Capacity), three transactions must be passed to provide the proper per line taxes. This is because some jurisdictions assess per line taxes, such as E911, on the number of Trunks used, while others assess on the number of Outbound Channels and still others assess based on the number of Extensions. In some cases, tax could be assessed on more than one transaction. For example, the jurisdiction may assess TRS on the trunk and E911 on the Outbound Channels.

For PBX Trunks, the transactions are as shown below:

• 578-PBX – Designates the number of PBX Trunks a customer is using. The Lines field of this transaction should be populated with the number of Trunks to be taxed.
• 566-PBX Outbound Channel – Designates the number of outbound channels a customer is using on a PBX Trunk. The Lines field of this transaction should be populated with the number of Outbound Channels to be taxed.
• 41-PBX Extension – Designates the number of Extensions a customer is using on a PBX Trunk. The Lines field of this transaction should be populated with the number of Extensions to be taxed.

For High Capacity Trunks, the transactions are as shown below:

• 579-PBX High Capacity – Designates the number of High Capacity Trunks a customer is using. High Capacity Trunks are usually defined as T1 or greater. The Lines field of this transaction should be populated with the number of Trunks to be taxed.
• 582-High Capacity Outbound Channel - Designates the number of outbound channels a customer is using on a High Capacity Trunk. The Lines field of this transaction should be populated with the number of Outbound Channels to be taxed.
• 580-High Capacity Extension – Designates the number of High Capacity Extensions a customer is using on a High Capacity Trunk. The Lines field of this transaction should be populated with the number of Extensions to be taxed.

The following table represents service types that are used for VoIP (19), VoIPA (20) and VoIP-Nomadic (59) transaction types. Those that are only valid with Non-Interconnected (65) are marked with a double asterisk (**).

Per-Invoice Taxes

In order to ensure that appropriate per invoice taxes are returned, users must submit one invoice transaction using service type 43-Invoice. Tax is based per invoice per account per billing cycle. Pass one transaction for each invoice issued. The charge and lines fields are irrelevant and must be set to zero.

The following table represents service types that are used for VoIP (19), VoIPA (20), VoIP-Nomadic (59), and Non-Interconnected (65) transaction types.

Directory Assistance

Clients who offer directory assistance should use the following Directory Assistance transactions.