Personal Technology Tips in Plain English
Is 46% Taxes Reasonable?
VoIP is one of the best things that the Internet era has brought to the world, even if Vonage is having trouble right now staying afloat.
While it’s here, you surely should look at Vonage and other VoIP providers for cheaper long distance for your home or business. That’s one of the main reasons why you get a broadband phone line – save money.
But after looking at your bill, you may not think that VoIP is really there to save you money. Take a look at one of my VoIP line bills that I received from Vonage recently:
(click image for full-size detailed copy of the bill breakdown)
Since it’s an extra line, I was persuaded by customer service to go on the $9.99/100 minute plan with unlimited voicemail, unlimited incoming calls, etc. So for $120/year, it’s not a bad investment to have a separate additional dedicated number.
But when I received the first bill, I was amazed to see that my $9.99 plan had a WHOPPING 46% IN TAXES AND FEES added onto the Vonage bill. For me personally, I’m keeping this rediculously tax-heavy plan, but it may not make sense for others.
LESSON: Make sure you pick the right plan for your needs otherwise you might be slammed with taxes and fees that are not quoted in the sales materials which really affect your bottomline.
I love tech, gadgets and the web. Hope you pick-up a useful tip or two here today that helps you use technology to your advantage! Better yet, why not share your own expertise in a comment on a post today to help the other readers that land here for answers!
January 13, 2008 - 5:25 pm
Looks like you did no research on these fees:
USF Fee: Vonage actually spent its own money appealing the FCC’s ruling to force VOIP providers to pay into the Universal service fee (http://caselaw.findlaw.com/data2/circs/dc/061276A.pdf). Guess what: they lost.
911 Fee: Yea, same thing. FCC (squarely in the pocket of Verizon/AT&T) decided that Voip Providers (read: Vonage & Comcast) had to provide customers enhanced 911 service, in 9 months time from ruling to completion. Cell phone companies have had over 25 years to provide spotty 911 service.
http://www.cellphonedigest.net/news/2007/09/sprint_alltel_us_cellular_not.php
Most States (including New Jersey, or Washington State) force all telecommunications providers to pay to have access to the PSAP (Public Safety Answering Point). 6100+ of ‘em paid for by your tax money and the fee. So, since you voted for this service by electing the officials, Vonage (in fact every Voip provider [got it on my Packet8 bill when I had them]) passed that fee on to the consumer.
That regulatory service fee? Remember how everyone had to have number portability? Yea, that’s not a free ride either. http://www.fcc.gov/fees/regfees.html
And Sales Tax… Yea, seems the state decided that since people would not pay a sales tax (how many people actually pay the state their rightful tax for goods and services bought on the internet) unless it was collected for them, you get stuck with that too.
Hey, if you got the $24.99 plan, only your sales tax would have gone up. The percentage of your bill would be less. Heck, in California, they’re planning on increasing sales tax on telecommunications for any company that terminates a call in the state.
So, please, remember that when voting for these people at the polling booth. Hey, in the fine state of California, we’re 3.1 billion in the hole. Those folks in New Jersey are ahead of us, 3.3 billion in the hole. Don’t ask me why a fine company like Vonage would headquarter themselves in the tax center of the world.