A telecommunications carrier wants to combine its new FCC Universal Service Fund (USF) pass-through charge with its existing state Telecommunications Infrastructure Fund (TIF) charge on one billing line, to keep bills simpler. The carrier also asked: (1) if it collects more TIF reimbursement from customers than it actually owes the state, must it remit that excess to Texas, and (2) are voice mail box revenues (with no paging component) subject to the Texas Telecommunications Assessment?

Plain-English summary

With the FCC about to require telecommunications carriers to start passing through a new Universal Service Fund (USF) charge, alongside the existing state Telecommunications Infrastructure Fund (TIF) charge already on customer bills, a carrier asked the Comptroller for permission to combine both charges onto a single billing line — reasoning that stacking more and more separate tax/assessment lines onto a bill risked making the statement more complicated than the actual service being billed. The carrier also asked two follow-up questions: (1) if it collects more TIF reimbursement from customers than the law requires it to remit, must the excess be paid over to Texas; and (2) are voice mail box revenues (with no paging component bundled in) subject to the state Telecommunications Assessment?

The Comptroller's answers: combining the USF and TIF charges into one billing line is fine — both assessments are levied against the carrier itself, not directly against the customer/ratepayer, and there's no prohibition against collecting a single combined reimbursement fee for both. But that combined charge becomes part of the tax base the sales tax applies to, and critically, it cannot be labeled or styled as if it were itself a tax or fee being charged TO the customer (it must be presented as a reimbursement of the carrier's own cost). On the excess-collection question, the Comptroller wasn't aware of any requirement that a reimbursement amount collected above what's actually remitted to Texas has to be paid over to the state (though the Comptroller couldn't speak to any parallel federal requirement on the USF side). And yes — voice mail box revenue is subject to the Texas TIF assessment, regardless of whether it's bundled with paging service.

What this means for you

Telecommunications carriers billing multiple regulatory pass-through charges

You can combine the federal USF and state TIF charges onto a single billing line for simplicity, but the combined charge still becomes part of your taxable sales price for Texas sales tax purposes, and it must be presented to customers as a cost reimbursement — not labeled as if it were itself a government tax or fee charged to them.

Carriers unsure what to do with over-collected reimbursement amounts

Based on this letter, there was no known requirement (as of 1998) to remit excess TIF reimbursement collected above what you actually owe the state — though confirm current guidance, since this is an area that could be revisited by the Comptroller or Legislature.

Providers of standalone voice mail services

Voice mail box revenue is subject to the Texas TIF assessment even without any paging component — don't assume a "pure" voice mail product escapes the assessment just because it lacks the paging feature that might otherwise trigger it.

Common questions

Q: Can a telecommunications carrier combine the USF and TIF charges onto one billing line?
A: Yes — there's no prohibition against a combined reimbursement fee, since both assessments are levied against the carrier rather than directly against the customer.

Q: Does combining the charges change whether Texas sales tax applies?
A: No — the combined charge still becomes part of the taxable sales price, and it can't be styled as a tax or fee imposed on the customer.

Q: If I collect more TIF reimbursement than I owe the state, do I have to remit the excess?
A: Per this letter, the Comptroller wasn't aware of any such requirement as of 1998 — but confirm current guidance.

Q: Is voice mail box revenue subject to the Texas Telecommunications Infrastructure Fund assessment?
A: Yes, regardless of whether the voice mail service includes a paging component.

Q: Can I rely on this letter for my own carrier billing practices?
A: No. It's based on the facts presented, and the letter notes the opinion may change on additional or different facts.

Citations and references

No specific Tax Code section or rule number was cited in this letter; the Comptroller applied its general framework for carrier-level regulatory assessments passed through to customers (see also Letter Ruling 9804500L in this corpus, addressing the same USF/TIF pass-through mechanics).

Source

• STAR search: https://star.comptroller.texas.gov/search?doc_type_code=L&tax_type_code=SST
• Opinion: https://star.comptroller.texas.gov/view/9803401L

Original ruling text

March 23, 1998

Dear Mr. *:

Thank you for your recent letter which is restated in part with response below.

Does the TUSF fund, allow companies passing the assessment through to their
customers to combine this charge with the state Telecommunications
Infrastructure Fund charge that already appears on their bill. As you know,
almost all telecommunications carriers will be adding a new separate charge for
the FCC Universal Service Fund. Our statements will have more lines for taxes
and assessments than the service we provide. By combining these two state
assessments on one billing line, we'll keep our bills as simple and inoffensive
as possible.

I request your written response for the following questions: If I collect more
revenue from billing my customer for the Telecommunications Infrastructure Fund
assessment than the law provides, am I required to remit that overage to the
state? I currently label this charge as "Telecommunications Infrastructure Fund
reimbursement". The second question pertains to Voice mail boxes that have no
paging component. That is Voice mail boxes that are not combined with paging
service in any way. Are the revenues from these boxes subject to the Texas
Telecommunications Assessment?

Response: Both the Universal Service Fund and Telecommunications Infrastructure
Fund assessments are made against the carrier and not directly against the rate
payers. To my knowledge, there is no prohibition against your collecting a
combined reimbursement fee from your customers. However, this charge will
become part of the tax base on which the sales tax is imposed and may not be
styled as a tax or fee imposed on the rate payer. Also, to my knowledge, there
is no requirement that a reimbursement amount collected over and above the
amount actually remitted to the state be paid to this agency. I cannot speak
for the Federal Government on this point. Voice mail revenue is subject to the
TIF assessment.

This opinion is rendered based on the facts presented. If there are additional
or different facts, the opinion may change.

You may call me toll free at 1-800-531-5441, ext. 3-4680. The direct line is
512/463-4680. You may also write to Tax Policy, Comptroller of Public Accounts.
The email address is .

Sincerely,

Al Van Allen
Tax Policy Division