Industry transformation can impact taxes
New technology. M&A activity. Changing legislation. Whether you’re a wireless or cable provider accustomed to telecom tax, you provide streaming or IoT services, or you’re just entering this daunting new world, you need to be certain you’re keeping up with potential tax implications.
It’s opening a new world of connected services for both consumer and business applications. Many of these offerings are in industries with little or no communications tax familiarity.
Even in wireless and cable industries well-versed in communications tax it’s a challenging environment filled with contingencies, exceptions, special cases, and incredibly complex determinations.
Does your product have voice? It’s probably taxable. Does it serve video or media? It’s taxable in many places, too. Is there a sensor involved? There’s a good chance it’s taxable.
Count on Avalara to help you understand what you need to know about communications tax now — and get ready for the future.
Voice demand is in flux
Demand for voice service continues to trend to VoIP. It’s likely 5G adoption will only increase consumer appetite for these more data intensive needs. Understanding when voice is communications taxable is very important since it can be taxed at an extremely high rate. Making sure your systems are configured for accurate records, reporting, and billing is critical, particularly since bundle prices change regularly. Understanding best practices to maintain compliance can be challenging; doing so while remaining competitive is even more difficult.
Video is increasingly in demand
Today’s consumers want video and audio content from multiple devices. Video downloads and streaming services are outpacing pay TV subscriptions, with reliance on cable alone becoming a rarity. Cable companies and content providers are launching streaming options, while streaming platforms offer content from multiple providers. Wireless, content, and cable partnerships are common. Bundles change frequently and may often be paired with voice. It’s an incredibly complex tax environment, especially for businesses new to communications tax.
Tech or connectivity may mean tax
If you sell anything that can be described as XaaS, hosting, internet connectivity, hardware with a telecom service, or a device or service that utilizes a sensor, there’s a chance you may be responsible for communications tax. This includes a big slice of 5G-powered IoT. The fastest growing areas with communications tax responsibility are B2B applications in automotive, agriculture, and manufacturing. It’s always best to ask an expert to make sure you’re compliant, especially since this area will likely see future legislative and regulatory changes.
Avalara for Communications simplifies tax compliance for an increasingly complex industry.
Connects directly to your billing or ERP system to calculate taxes and fees for communications services.
Handles return preparation, files on your behalf, and remits payments to the appropriate jurisdictions.
5G: Taxes and a telecom revolution (Accounting Today podcast)
Is the End Looming for Traditional Voice Services? (ECN)
Benefits of 5G can usher in a new era for Industrial IoT – and maybe new taxes, too (IIoT World)
Adding UC To Your Platform? Don't Forget Tax (Unified Communications)
Series Part 1: Why are communications taxes so complex? (Accounting Today)
Sensors poised for hyper growth In 5G networks, is your tax team prepared? (FierceElectronics)
How Avalara helps companies navigate complex telecom taxes for IoT services like in-car calling and telematics (TechRepublic)