Communications Taxes FAQs for Providers
When did the current communications tax structure become effective?
The current provisions for communications taxes took effect on January 1, 2007, and apply to all bills issued by communications service providers on or after that date.
What are the communications taxes that a provider must report to the Department of Taxation?
The communications taxes are comprised of (1) the communications sales and use tax, (2) the landline E-911 tax, and (3) the public rights-of-way use fee on cable television service.
What services are subject to the communications sales tax?
The tax applies to a number of services, including landline and post-paid wireless telephone services, cable television services, and satellite television and radio services. For a complete listing, see the Guidelines and Rules for the Virginia Communications Taxes.
What services are not subject to the communications sales tax?
The law provides many exclusions, including information services, installation and maintenance of wiring, sales or rental of tangible personal property, and charges for billing and collections, although some of these items may be subject to the retail sales and use tax. For a complete listing, see the Guidelines and Rules for the Virginia Communications Taxes.
Are wire maintenance fees and insurance (for example, cell phone insurance) taxable?
No. Providers should exclude wire maintenance fees and insurance charges in computing the tax on a customer's bill.
Who is subject to the cable television public rights-of-way use fee?
Effective January 1, 2007, cable television service providers must collect a public rights-of-way use fee from their subscribers. The fee is similar to the public rights-of-way fee collected by telephone companies from their customers, and is assessed at the same rate. The rate is determined by the Virginia Department of Transportation on an annual basis. As of July 1, 2014, the rate will be $1.02 per subscriber per month. This is a increase of $0.05 from last year. The fee is subject to change each year on July 1.
Who must register to collect and remit the Virginia communications taxes?
The requirement for collection of the tax is generally imposed on communications service providers. Any business engaged in the sale of communications services to customers in Virginia is required to register for an account, and to collect and remit the Virginia communications taxes. This requirement is in addition to any liability the provider may have to register for the collection of retail sales and use tax.
How does a provider register for a communications tax account?
Use Form R-1 to register for a communications tax account.
What forms should I use to remit the tax? When are the returns and payments due?
A monthly return must be filed on Form CT-75 by the 20th of each month to report and pay over the taxes collected for the preceding month. Once a provider registers for a communications taxes account, a timely return must be filed for each month, even if there is no tax due.
Does the Form CT-75 provide for a dealer's discount, similar to the discount allowed for timely filing and payment of the retail sales and use tax?
The 2010 General Assembly passed legislation that affects the Dealer's Discount taxpayers may claim on certain sales tax-type returns. The changes are effective June 1, 2010 and affect Communications Tax & E-911. Both the Communications Sales Tax and the landline E-911 dealer discounts have been repealed.
Where can I find the FIPS codes needed to complete the franchise fee schedule on Form CT-75?
The FIPS codes are available online, or you can call our Customer Contact Center at (804) 367-8037 for assistance.
Can I make my communications taxes payments by EFT?
Yes, you can pay your taxes via electronic funds transfer (EFT) using the ACH credit method. For details, refer to Section III of the EFT Guide.
What are the penalty and interest charges for late filing or late payment?
Separate penalty charges apply to each of the three tax types reported on Form CT-75. For the communications sales tax, the penalty is assessed on the tax due at the rate of 6 percent per month, from the due date through the date the return is filed or the date the tax is paid, whichever is later. The maximum penalty is 30 percent of the tax due. The minimum penalty, which applies even if there is no tax due, is $10. For the E-911 tax and the public rights-of-way use fee, the penalty is assessed on the tax due at a flat rate of 5 percent. There is no minimum penalty charge for either of those taxes. For all three taxes, interest is applied to the tax due, from the due date through the date of payment.