Cost Recovery Surcharge & Va Personal Property Tax Recovery for IP Transit
NANOG, We've recently signed contract of colocation + IP transit with a local provider in Northern Virginia. Co-location services is okay but we found something unusual on our IP transit invoices. - Va Personal Property Tax Recovery (1.8%) - Cost Recovery Surcharge (3%)? We've talked with our providers but they told us:
we use a tax engine that provides the taxes/rates to our services. If you would like further language on them, please let me know and I will have some one send that over.
Has anyone else ran into this? If this is a legit "surcharge"? Also, IP transit isn't a property, why is there a "Property Tax" for IP transit? Regards, Siyuan Miao
On 1/6/20 9:39 AM, Siyuan Miao wrote:
- Va Personal Property Tax Recovery (1.8%) - Cost Recovery Surcharge (3%)?
These sound like your typical BS "authorized fees" many carriers at all levels love to levy. They're basically attempting to itemize various regulatory (i.e. regulations they have to comply with just like any business would) overhead and pass it on to you directly. Cable companies and incumbent telecoms love to do this since it's a way to make more money without raising base rates that they actually have to quote to people. They were probably described deep in the bowels of your contract. If not...you might be able to get out of them. -- Brandon Martin
It seems to me the cable companies started this long ago to account for various local taxes being levied upon them in different jurisdictions. They figured "why should someone in this county make us less money than someone in another county", so they leveled the field by breaking the taxes out. It seems to have worked so well, that they just started off loading anything they could find in to below the line pricing. We're seeing this more and more. The company that hauls our office trash away has decided to put an "environmental surcharge" and "fuel surcharge" on our bills. It's all spelled out in the contract fine print, but it seems to me that the $43.00 per trip surcharge is enough diesel to go back and forth 10 times between our location and the transfer station... At 09:46 AM 06/01/2020, Brandon Martin wrote:
On 1/6/20 9:39 AM, Siyuan Miao wrote:
- Va Personal Property Tax Recovery (1.8%) - Cost Recovery Surcharge (3%)?
These sound like your typical BS "authorized fees" many carriers at all levels love to levy. They're basically attempting to itemize various regulatory (i.e. regulations they have to comply with just like any business would) overhead and pass it on to you directly. Cable companies and incumbent telecoms love to do this since it's a way to make more money without raising base rates that they actually have to quote to people.
They were probably described deep in the bowels of your contract. If not...you might be able to get out of them. -- Brandon Martin
-- Clayton Zekelman Managed Network Systems Inc. (MNSi) 3363 Tecumseh Rd. E Windsor, Ontario N8W 1H4 tel. 519-985-8410 fax. 519-985-8409
On Mon, Jan 6, 2020 at 6:40 AM Siyuan Miao <aveline@misaka.io> wrote:
NANOG,
We've recently signed contract of colocation + IP transit with a local provider in Northern Virginia.
Co-location services is okay but we found something unusual on our IP transit invoices.
- Va Personal Property Tax Recovery (1.8%)
- Cost Recovery Surcharge (3%)?
We've talked with our providers but they told us:
we use a tax engine that provides the taxes/rates to our services. If you would like further language on them, please let me know and I will have some one send that over.
Has anyone else ran into this? If this is a legit "surcharge"? Also, IP transit isn't a property, why is there a "Property Tax" for IP transit?
Hi Siyuan, If it's not written in to your contract, it's a breach of contract. Either way it's a deceitfully imposed surcharge, not a state tax. Virginia does not tax the sale of services like transit and colo. More, the only personal property tax I've heard of in Virginia is on motor vehicles. Regards, Bill Herrin -- William Herrin bill@herrin.us <https://bill.herrin.us/> https://bill.herrin.us/
On Mon, Jan 6, 2020 at 10:30 AM William Herrin <bill@herrin.us> wrote:
If it's not written in to your contract, it's a breach of contract. Either way it's a deceitfully imposed surcharge, not a state tax. Virginia does not tax the sale of services like transit and colo. More, the only personal property tax I've heard of in Virginia is on motor vehicles.
also, houses and ( I think ) boats. (personal property tax) I could imagine this is: "Hey, have our customers pay our realty/property taxes for us!" plan... or that perhaps they are 'leasing you ground space" and passing on the %-age of their total space's tax footprint to you. not saying either of those sounds terrific though :)
On Mon, Jan 6, 2020 at 10:54 AM Christopher Morrow <morrowc.lists@gmail.com> wrote:
On Mon, Jan 6, 2020 at 10:30 AM William Herrin <bill@herrin.us> wrote:
If it's not written in to your contract, it's a breach of contract. Either way it's a deceitfully imposed surcharge, not a state tax. Virginia does not tax the sale of services like transit and colo. More, the only personal property tax I've heard of in Virginia is on motor vehicles.
also, houses and ( I think ) boats. (personal property tax)
and mobile homes, and aircraft... oh, and, surprisingly, Flight Simulators (a rate of $0.01 per $100 of assessed value). I guess that this means that if I buy a joystick from amazon for $19.99 I owe the country 0.002c...
I could imagine this is: "Hey, have our customers pay our realty/property taxes for us!" plan... or that perhaps they are 'leasing you ground space" and passing on the %-age of their total space's tax footprint to you.
not saying either of those sounds terrific though :)
Yup - this sounds like the "We will charge you a modem rental fee, even if you don't, you know, actually rent a modem..." (like https://arstechnica.com/information-technology/2019/07/frontier-customer-bou...) Warren "Waitin' for the servicefinder.se spam" Kumari. -- I don't think the execution is relevant when it was obviously a bad idea in the first place. This is like putting rabid weasels in your pants, and later expressing regret at having chosen those particular rabid weasels and that pair of pants. ---maf
On Jan 6, 2020, at 07:53 , Christopher Morrow <morrowc.lists@gmail.com> wrote:
On Mon, Jan 6, 2020 at 10:30 AM William Herrin <bill@herrin.us> wrote:
If it's not written in to your contract, it's a breach of contract. Either way it's a deceitfully imposed surcharge, not a state tax. Virginia does not tax the sale of services like transit and colo. More, the only personal property tax I've heard of in Virginia is on motor vehicles.
also, houses and ( I think ) boats. (personal property tax)
Houses would be “Real Property” tax vs. “Personal Property” tax. Owen
I've checked my contract and there's a line:
If <redacted>’s costs to provide services to Customer increase due to reasons beyond <redacted>’s control, including annual escalations imposed by facility providers (often referred to as “Facility Cost Recovery Surcharges”), <redacted> has the right to increase the fees paid by Customer to cover such costs.
If any local, state, national, international, public or quasi-public governmental entity or foreign government or its political subdivision imposes any taxes (excluding taxes based on <redacted>’s net income or capital or any property taxes), fees, surcharges, or other charges or impositions on <redacted> as a result of <redacted>’s sale of Services or Customer’s use of Services, Customer shall pay any such impositions (“Additional Charges”) and indemnify <redacted> from any liability or expense associated with the Additional Charges. Taxes that arise in any jurisdiction, including, without limitation, value added, consumption, sales, use, excise, access, bypass, franchise, or other taxes, fees, duties, charges or surcharges, however designated, imposed on, incident to, or based upon the provision, sale or use of the Service.
Though, I don't think it's okay to pay CRS and property tax for IPT service. Will try to negotiate with them again. Honestly, it's my first time to see these BS. We never have any similar issues with other providers. On Mon, Jan 6, 2020 at 11:29 PM William Herrin <bill@herrin.us> wrote:
On Mon, Jan 6, 2020 at 6:40 AM Siyuan Miao <aveline@misaka.io> wrote:
NANOG,
We've recently signed contract of colocation + IP transit with a local provider in Northern Virginia.
Co-location services is okay but we found something unusual on our IP transit invoices.
- Va Personal Property Tax Recovery (1.8%)
- Cost Recovery Surcharge (3%)?
We've talked with our providers but they told us:
we use a tax engine that provides the taxes/rates to our services. If you would like further language on them, please let me know and I will have some one send that over.
Has anyone else ran into this? If this is a legit "surcharge"? Also, IP transit isn't a property, why is there a "Property Tax" for IP transit?
Hi Siyuan,
If it's not written in to your contract, it's a breach of contract. Either way it's a deceitfully imposed surcharge, not a state tax. Virginia does not tax the sale of services like transit and colo. More, the only personal property tax I've heard of in Virginia is on motor vehicles.
Regards, Bill Herrin
-- William Herrin bill@herrin.us <https://bill.herrin.us/> https://bill.herrin.us/
Cost Recovery Surcharge (CRS) is to recover costs charged to <REDACTED> by the infrastructure providers to comply with government regulatory requirements and proceedings, including costs associated with administration and support, compliance and reporting obligations. This also includes additional charges for Federal Regulatory Fees to recover direct and indirect costs associated with government programs including regulatory fees and expenses assessed by the FCC, such as fees to fund telecommunications services for the speech and hearing-impaired, North American Numbering Plan administration, FCC Regulatory Assessment and other regulatory fees. The CRS rate is 3.0%. VA Property Tax Recovery (PTR) helps to recover costs assessed on network facilities operators and related charges incurred from our underlying carriers, including government
Tried again and failed again. Perhaps it's time to go to CoreSite directly and cancel the contract. property tax assessments, franchise fees, right-of-way fee costs, network security and infrastructure management. The PTR rate is 1.8%. Thanks guys for helping us figure this out. On Mon, Jan 6, 2020 at 11:56 PM Siyuan Miao <aveline@misaka.io> wrote:
I've checked my contract and there's a line:
If <redacted>’s costs to provide services to Customer increase due to reasons beyond <redacted>’s control, including annual escalations imposed by facility providers (often referred to as “Facility Cost Recovery Surcharges”), <redacted> has the right to increase the fees paid by Customer to cover such costs.
If any local, state, national, international, public or quasi-public governmental entity or foreign government or its political subdivision imposes any taxes (excluding taxes based on <redacted>’s net income or capital or any property taxes), fees, surcharges, or other charges or impositions on <redacted> as a result of <redacted>’s sale of Services or Customer’s use of Services, Customer shall pay any such impositions (“Additional Charges”) and indemnify <redacted> from any liability or expense associated with the Additional Charges. Taxes that arise in any jurisdiction, including, without limitation, value added, consumption, sales, use, excise, access, bypass, franchise, or other taxes, fees, duties, charges or surcharges, however designated, imposed on, incident to, or based upon the provision, sale or use of the Service.
Though, I don't think it's okay to pay CRS and property tax for IPT service. Will try to negotiate with them again.
Honestly, it's my first time to see these BS. We never have any similar issues with other providers.
On Mon, Jan 6, 2020 at 11:29 PM William Herrin <bill@herrin.us> wrote:
On Mon, Jan 6, 2020 at 6:40 AM Siyuan Miao <aveline@misaka.io> wrote:
NANOG,
We've recently signed contract of colocation + IP transit with a local provider in Northern Virginia.
Co-location services is okay but we found something unusual on our IP transit invoices.
- Va Personal Property Tax Recovery (1.8%)
- Cost Recovery Surcharge (3%)?
We've talked with our providers but they told us:
we use a tax engine that provides the taxes/rates to our services. If you would like further language on them, please let me know and I will have some one send that over.
Has anyone else ran into this? If this is a legit "surcharge"? Also, IP transit isn't a property, why is there a "Property Tax" for IP transit?
Hi Siyuan,
If it's not written in to your contract, it's a breach of contract. Either way it's a deceitfully imposed surcharge, not a state tax. Virginia does not tax the sale of services like transit and colo. More, the only personal property tax I've heard of in Virginia is on motor vehicles.
Regards, Bill Herrin
-- William Herrin bill@herrin.us <https://bill.herrin.us/> https://bill.herrin.us/
Had a similar issue where a provider would slap a ~10% "FCC Regulatory Surcharge" (not specified in the contract) on IP transit delivered in Canada. We spent multiple hours trying to resolve the issues. I ended up by de-peering from the three letter name company. They were the only one doing this (out of six Tier1 providers available in the city). I don't care about paying regulatory stuff. In some places, it's part of the game. I just need my providers to be transparent. If you're selling a full 10G of IP transit at $0.40/Mbps, I expect to receive an invoice for $4000+tx a month, not $4400+tx a month. Eric On Jan 6 2020, at 10:56 am, Siyuan Miao <aveline@misaka.io> wrote:
I've checked my contract and there's a line:
If <redacted>’s costs to provide services to Customer increase due to reasons beyond <redacted>’s control, including annual escalations imposed by facility providers (often referred to as “Facility Cost Recovery Surcharges”), <redacted> has the right to increase the fees paid by Customer to cover such costs. If any local, state, national, international, public or quasi-public governmental entity or foreign government or its political subdivision imposes any taxes (excluding taxes based on <redacted>’s net income or capital or any property taxes), fees, surcharges, or other charges or impositions on <redacted> as a result of <redacted>’s sale of Services or Customer’s use of Services, Customer shall pay any such impositions (“Additional Charges”) and indemnify <redacted> from any liability or expense associated with the Additional Charges. Taxes that arise in any jurisdiction, including, without limitation, value added, consumption, sales, use, excise, access, bypass, franchise, or other taxes, fees, duties, charges or surcharges, however designated, imposed on, incident to, or based upon the provision, sale or use of the Service.
Though, I don't think it's okay to pay CRS and property tax for IPT service. Will try to negotiate with them again.
Honestly, it's my first time to see these BS. We never have any similar issues with other providers. On Mon, Jan 6, 2020 at 11:29 PM William Herrin <bill@herrin.us (mailto:bill@herrin.us)> wrote:
On Mon, Jan 6, 2020 at 6:40 AM Siyuan Miao <aveline@misaka.io (mailto:aveline@misaka.io)> wrote:
NANOG,
We've recently signed contract of colocation + IP transit with a local provider in Northern Virginia. Co-location services is okay but we found something unusual on our IP transit invoices. - Va Personal Property Tax Recovery (1.8%) - Cost Recovery Surcharge (3%)? We've talked with our providers but they told us:
we use a tax engine that provides the taxes/rates to our services. If you would like further language on them, please let me know and I will have some one send that over. Has anyone else ran into this? If this is a legit "surcharge"? Also, IP transit isn't a property, why is there a "Property Tax" for IP transit?
Hi Siyuan,
If it's not written in to your contract, it's a breach of contract. Either way it's a deceitfully imposed surcharge, not a state tax. Virginia does not tax the sale of services like transit and colo. More, the only personal property tax I've heard of in Virginia is on motor vehicles. Regards, Bill Herrin
-- William Herrin bill@herrin.us (mailto:bill@herrin.us)
Both are quite likely to be negotiable. FCC Cost Recovery fees are the federally mandated ones they are allowed to pass on to you. Most anything else named 'Cost Recovery' is optional, and so named to try and confuse you into thinking it's the mandatory stuff. "Property Tax Recovery" charges are also to my knowledge 100% optional fees. It's the carrier charging you a fee so they can pay their property taxes. Somehow, this sort of thing is legal. On Mon, Jan 6, 2020 at 9:42 AM Siyuan Miao <aveline@misaka.io> wrote:
NANOG,
We've recently signed contract of colocation + IP transit with a local provider in Northern Virginia.
Co-location services is okay but we found something unusual on our IP transit invoices.
- Va Personal Property Tax Recovery (1.8%)
- Cost Recovery Surcharge (3%)?
We've talked with our providers but they told us:
we use a tax engine that provides the taxes/rates to our services. If you would like further language on them, please let me know and I will have some one send that over.
Has anyone else ran into this? If this is a legit "surcharge"? Also, IP transit isn't a property, why is there a "Property Tax" for IP transit?
Regards, Siyuan Miao
On 1/6/20 9:21 AM, Tom Beecher wrote:
"Property Tax Recovery" charges are also to my knowledge 100% optional fees. It's the carrier charging you a fee so they can pay their property taxes. Somehow, this sort of thing is legal.
I mean, it's legal if someone signed an agreement that says they are agreeing to pay such things.
On Mon, Jan 6, 2020 at 10:17 AM Tom Beecher <beecher@beecher.cc> wrote:
Both are quite likely to be negotiable.
FCC Cost Recovery fees are the federally mandated ones they are allowed to pass on to you. Most anything else named 'Cost Recovery' is optional, and so named to try and confuse you into thinking it's the mandatory stuff.
The person getting charged FCC Cost Recovery was in Canada, however. Good to know the US annexed Canada and brought it under the jurisdiction of the FCC recently... ^_^; Matt
If your data center is in Ashburn, which is in Loudoun County, then the servers inside are considered personal property and are taxed as such. They explain it in the latter part of the article. https://datacenterfrontier.com/the-data-center-dividend-tax-revenue-surges-i... Laura On Mon, Jan 6, 2020 at 2:19 PM Matthew Petach <mpetach@netflight.com> wrote:
On Mon, Jan 6, 2020 at 10:17 AM Tom Beecher <beecher@beecher.cc> wrote:
Both are quite likely to be negotiable.
FCC Cost Recovery fees are the federally mandated ones they are allowed to pass on to you. Most anything else named 'Cost Recovery' is optional, and so named to try and confuse you into thinking it's the mandatory stuff.
The person getting charged FCC Cost Recovery was in Canada, however.
Good to know the US annexed Canada and brought it under the jurisdiction of the FCC recently... ^_^;
Matt
It's in Reston (Fairfax County). On Wed, Jan 8, 2020 at 12:22 AM Eilers, Laura via NANOG <nanog@nanog.org> wrote:
If your data center is in Ashburn, which is in Loudoun County, then the servers inside are considered personal property and are taxed as such. They explain it in the latter part of the article.
https://datacenterfrontier.com/the-data-center-dividend-tax-revenue-surges-i...
Laura
On Mon, Jan 6, 2020 at 2:19 PM Matthew Petach <mpetach@netflight.com> wrote:
On Mon, Jan 6, 2020 at 10:17 AM Tom Beecher <beecher@beecher.cc> wrote:
Both are quite likely to be negotiable.
FCC Cost Recovery fees are the federally mandated ones they are allowed to pass on to you. Most anything else named 'Cost Recovery' is optional, and so named to try and confuse you into thinking it's the mandatory stuff.
The person getting charged FCC Cost Recovery was in Canada, however.
Good to know the US annexed Canada and brought it under the jurisdiction of the FCC recently... ^_^;
Matt
participants (12)
-
Brandon Martin -
Christopher Morrow -
Clayton Zekelman -
Eilers, Laura -
Eric Dugas -
Matthew Petach -
Owen DeLong -
Seth Mattinen -
Siyuan Miao -
Tom Beecher -
Warren Kumari -
William Herrin