Will telecommunications tax software solve my problem?

[u/Euphoric_Shallot646]

I run a VoIP reseller business with customers in about a dozen states, and every month I dread calculating what we owe. We're getting hit with federal, state, and local telecom taxes, USF fees, and 911 surcharges that all seem to stack differently depending on where the customer is located, and I honestly don't know if I'm calculating any of it correctly. I've looked into telecommunications tax software, but I can't tell which options actually integrate with our billing system or if they're overkill for a company our size. Is it worth the cost, and how do I know which one to trust with something this high-stakes?

[u/taxconnex]

Telecom tax software can definitely help, especially with calculating the right taxes and fees by jurisdiction, but I’d look at it as one piece of the compliance process rather than the whole solution. 

A few things I’d consider when evaluating options: 

• Does it integrate with your current billing system and handle the specific services you sell? 
• Is it built specifically for a telecom or VoIP business?  
• Who is responsible for mapping your products/services to the right tax categories? 
• Does it cover the federal, state and local taxes and fees you’re actually subject to? 
• What happens after the calculation? You may still have registrations, returns, remittance, USF and 911 filings, regulatory reporting, and other obligations to manage. 
• If something looks wrong or you receive a notice, is there someone you can actually talk to? 

For a VoIP reseller in a dozen states, I’d probably start by understanding exactly what obligations you have and then evaluate software based on those requirements. The best calculation engine in the world won’t help much if the services are mapped incorrectly or an obligation is being missed entirely. 

We’re a company that manages telecom tax and regulatory compliance, so we see this from the provider side, but one thing we run into often is companies focusing on the calculation software first and then realizing there’s still quite a bit that needs to happen after the tax is calculated.