Federal, state, and local taxes and fees

This is an occupation tax levied on CenturyLink by some local governments. The rate can change quarterly. By state law, the tax is passed directly to customers.

City sales taxes are assessed by some municipalities. State statutes may allow the provider to pass the assessment on to customers.

Rates for these taxes vary by city, as well as by the products and services being taxed. Your bill will show two or more "city sales tax" lines if different city sales taxes are applied to various products and services. Additionally, some cities may impose separate occupation taxes on CenturyLink, and these are passed on to the customer pursuant to tariff rules.

This tax is assessed by a county government. Rates, taxed services, and allocation of tax revenues vary by county.

Also known as:

• Local County Tax

Federal tax is assessed by the United States government on telecommunications services. It was created in 1898 as a luxury tax to pay for the Spanish-American War. It was not applied to telephone bills until 1971. Today, all proceeds go into the general revenue fund.

The percentage has decreased on a steady basis from its original 10% in 1971 to its current level of 3%. The Federal Excise Tax was set to expire in 1982; however, government action that year made it a permanent tax.

Who put it on the bill?

United States Congress.

Who gets the money?

U.S. Treasury - General Revenue Fund

Applies to:

• Basic local service (not including long distance)
• Vertical services (call forwarding, caller ID, call blocking, etc.)
• Interstate access surcharge
• Universal service fee
• Directory assistance (local)

Exemptions

• Installation charges
• Answering services
• Mobile radio telephone service
• Coin-operated telephones
• Telephone-operated security systems
• News services and radio broadcasts of news and sporting events
• Common carriers and communications companies
• Military personnel serving in combat zones
• International organizations
• Communications serving federal, state, and local government

Also known as:

• Federal Excise Tax (FET)

A tax placed on tolls originated and terminated in a state other than the customer's home state as determined by the state and/or local taxing authority in the foreign state.

Tolls originating in one foreign state and terminating in another are not charged foreign state tax. The rate of this tax varies depending on the state where the call originated.

A Local Sales Tax is assessed by a local government. The services that the tax is applied to depend on the locality.

Who put it on the bill?

The tax is imposed by local jurisdictions, including cities, counties, special purpose districts, and transit authorities. CenturyLink is required to collect this tax on behalf of the applicable entities.

Who gets the money?

Revenues collected from local sales taxes are allocated by the local authority. Recipients may include:

• State General Revenue Fund
• Parks and Wildlife Department
• Highway Department
• Parks and Recreation Department

Also known as:

• Local County and City Tax
• Local Communication Services Tax
• Local Interstate Telecom Tax

Special District taxes are assessed outside the scope of states, counties or cities. They are used for transit districts, stadium districts and other special purpose tax districts.

This tax funds the operational costs of the State Commission or other state regulatory agency whose responsibilities include oversight of the telecommunications industry.

Who put it on the bill?

Typically authorized by the state legislature

Who gets the money?

The State Commission or other state regulatory agency

Also known as:

• State Regulatory Tax
• Regulatory Fee
  

Provides financing for equipment purchases for advanced telecommunications services to public schools, hospitals, and libraries. Funds are distributed by grants.

Who put it on the bill?

The state legislature.

Who gets the money?

Institutions like public schools, hospitals, and libraries that apply and qualify for the grants covered under the program.

State sales tax is assessed by the state government. The services that the tax is applied to vary by state.

Who put it on the bill?

The state legislature requires CenturyLink to collect state sales tax on behalf of the state.

Who gets the money?

Revenues collected from state sales taxes are allocated as designated by the state authority. Recipients may include:

• State General Revenue Fund
• Parks and Wildlife Department
• Highway Department
• Parks and Recreation Department

Also known as:

• Communications Sales Tax

This surcharge helps keep local service rates affordable for all residents of the state, subsidizes specialized telecommunications programs, and provides discounts to low-income families.

Who put it on the bill?

Individual state legislatures can choose to add this charge for CenturyLink customers.

What is it?  Who gets the money?

This surcharge is a funding mechanism for your state's Universal Service Fund (USF).  The largest part of the Universal Service Fund helps fund telecommunications services to the rural, high-cost areas of the state, which helps keep phone services reasonably priced for all residents.

It also provides financial support for specialized telecommunications programs like Relay and Specialized Telecommunications Device Assistance programs for the speech- and hearing-impaired and physically disabled.

Finally, the Universal Service Fund provides assistance to income-eligible customers who qualify for discount service programs.

Also known as:

• Universal Service-Local
  
• Universal Svc
• Universal Svc:Local Toll
• Universal Service

In 1999, Texas House Bill 1777 required companies that provide telecommunications services within a municipality to compensate the municipality for use of public rights-of-way. Texas state law also gives a certificated telecommunications carrier the right to recover, on a pro rata basis, the amount paid to a municipality from its customers who are within the boundaries of the municipality.

The charge may be separately stated on the customer's bill. The Municipal Franchise Fee offsets the costs that local telephone companies must pay municipalities for use of public rights-of-way in Texas.

The rate varies based on municipality and type of customer.