In Part I, we covered regulated and non-regulated charges that will appear on your bills. This issue will describe different kinds of taxes that you will find, what they are paid for and who is exempt from them.

Taxes and tax-like charges can add as much as 25%, and more, to local telephone charges in some jurisdictions. This is an area to which no rules are universally applicable, so all generalities have exceptions. That being said, there are three "rules-of-thumb" which can be useful in understanding taxes placed on your bills.

1. Generally, four types of taxes include service fees and charges; franchise tax or surcharges; sales use or special taxes; and federal excise tax.

2. Taxes are not uniformly imposed on all services.

3. Some categories of users are exempt from some taxes. Let's take a closer look at specific taxes you'll encounter on your bills.

Specific Service Fees and Charges These charges may be imposed to support 911 services, operation of Public Utility Commission (California), provision of special equipment for handicapped persons (California), Universal Service Funds, poison control centers (Texas), etc. The Presubscribed Interexchange Carrier Charge (PICC) would also fall into this category. Such charges may be calculated on a per-line or percentage basis. These fees apply universally and there are no exceptions.

Franchise Taxes or Surcharges

Usually local items, these charges can and may be imposed by county or state governments. Most often these are calculated as a percent of items that apply, (various local service charges, additional calls or message unit charges, and installation charges), but they may be calculated on some other basis. This tax is called a variety of names, including franchise fee, city tax, municipal charge, surcharge, additional charge (AC), gross receipts tax, etc. As usual, this varies from state to state.

While a simple review of telecom bills can reveal cost-saving savings opportunities, Customer Service Records contain very specific information and data. Most suppliers will release a copy of a CSR when requested by a customer or auditing firm on their behalf.

What is a CSR? A CSR is a copy of how your telephone records appear in telephone company's database. It contains information about each separate line charge (i.e. type of service, federal access charge, number portability charge, calling blocks on line, 911 charge, etc.) that encompasses your monthly service charge on your bill.

In addition, a CSR reveals service location of account, billing address, additional directory listings, PIC designations, hunting order, features that are being charged and on which line these features appear, calling plans that may include monthly charges, and taxes applied to each of items on record.

"Customer Service Record" is most commonly used term for internal record of your account. Others may include a "2733" or "PBX/Key/Multiline" record. (SBC) Some LECS use term "Service Record" or "Billing Services Record" while others have no record at all. These would include Mom and Pop telephone companies and CLECS. They can usually type them manually with information you request.

Universal Service Order Codes (USOC) Customer Service Records are written in codes, commonly called USOC, or Universal (or Uniform) Service Order Codes. These codes are literally a foreign language to most, so allow yourself plenty of time to become familiar with USOC codes used by your local carrier. A more in-depth discussion of USOC codes will be discussed in a future issue of this newsletter. At TelCon Associates, we've developed a database of over 10,000 USOC codes. CONTACT US for information on this valuable auditing resource.