Tax & Fees Explained

Quick Reference Guide: Which Tax Goes With Which Service

Cable Products Phone Products Modem Rental/ SecureIT

- State (Sales) Tax
- City Tax
- Franchise Fee

- Federal Tax (Excise)
- Federal Tax (t) (Excise)
- Universal Service Fund (LD&FAPC)
- State (Sales) Tax
- State (Sales) Tax (t)
- City Tax
- City Tax (t)
- E-911 Charge

- State (Sales) Tax
- City Tax
Note: Internet services are not
subject to tax- just modem fee


Federal Tax (Excise): Tax imposed by the federal government and paid to the IRS on local phone services.

Services Taxed: Phone service credits and promos (This does not include credits or promos for freedom line.) Additional phone features (all other features listed under phone excluding flat rate LD charge.)

Tax Rate: 3%

Universal Service Fund (USF): Fee imposed by and paid to the federal government on your interstate LD phone services and the portion of your local or unlimited phone plan known as the Federal Access Charge.

Services Taxed: Interstate long distance charges (calls made out of Iowa.) Federal Access Phone Charge (FAPC.) Flat $4.95 LD Plan Charge.

Tax Rate: 20.0% (varies by quarter)

State Tax (Sales): Tax imposed by and paid to the State of Iowa on your monthly cable TV and phone services plus certain equipment.

Services Taxed: Net cable service (charge for cable minus promos and credits.) Modem rental fee (fee will be $0 if there is a free modem rental promo along with fee.) Additional phone features (including flat rate LD charge.) Pay Per View. OCC. Intrastate long distance (LD calls within Iowa.) SecureIT charge. Subtract any phone credits and promos (including those for freedom line.)

Tax Rate: 6%

City Tax (Sales): Tax imposed by and paid to the City of Cedar Rapids on your monthly cable TV and phone services plus certain equipment.

Services Taxed: Same as for State Tax

Tax Rate: 1%

Franchise Fee: Fee imposed by and paid to local cities for access to public rights-of-way.

Services Included: Net cable service (charge for cable minus any promos and credits.) Pay per View. Charges or credits for cable equipment (cable box and remote, cords not included.)

Tax Rate: 5%

E-911 Charge: charge imposed by local cities to help pay for emergency services.

Service and Charge: There is a $1.00 fee for each phone line.

Federal Access Phone Charge (FAPC): A charge to help pay the costs for access to and maintenance of the local phone network. It was previously included in the phone charge, but will now be separated out and taxed the same as the phone products beginning June 2011.

Service and Charge: Local Line and Local Line Plus - $2.00 charge per line
                             Freedom Line - $7.00 charge per line