Industry Tax Updates

Tax Updates

• Illinois confirmed new municipal SMTT rates effective July 1, 2026. Combined rates: 8.65% state, Up to 6.00% local (outside Chicago). Providers needed to validate municipal coding, sourcing, and billing configs during April–May to prepare.
• San Francisco, CA – MTS rate increases from 15.8% to 16.02%, effective 4/1/2026.
• CA, Sales and Use Tax – rate increase for Q226 for 7 cities/districts.
  PUBLICATION 388, TAX INFORMATION BULLETIN
• Ohio eliminated several long standing exemptions, resulting in broader sales tax application to telecommunications and related digital services, including: Certain telecommunications services, Digital communications products, Data transmission and processing services historically treated as informational or ancillary.

Assurance

• CCH update – Reconfiguration of the Plano, Texas Local 911 Fee
• CCH update – Reconfiguration of the Maine Universal Service Fund
• CCH update – Reconfiguration of the Utah Universal Service Fund
  • Rising VoIP and bundled‑services scrutiny being identified and reviewed; January  1, 2026 expansions to digital and communications tax bases began showing billing and audit impact in April, especially for:
  • VoIP
  • UCaaS
• Bundled voice + software offerings
• Preparation for mid‑year state and municipal tax changes
• Security and disaster‑response obligations – CPUC in Imperial, Santa Barbara, Santa Cruz, Mendocino, Sonoma, Ventura, and Humboldt California Counties
• The FCC expanded DIRS and MDRI reporting in response to Super Typhoon Sinlaku; Providers were required to submit network‑status and outage reports throughout April

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Federal Oversight and Initiatives

Despite the Q2 dip to 37.0%, industry pressure on: expanding the contribution base (e.g., broadband) or restructuring USF methodology continues in Congress and at the FCC.

499 A filings were due April 1, 2026, using 2025 revenue data.
April and May 2026 USF invoices are based on these newly updated filings.

• The FCC announced the agenda for its April 30, 2026 Open Commission Meeting, highlighting several major regulatory actions.
• FCC Announces Tentative Agenda for April Open Commission Meeting
  April 2026 FCC releases show strong emphasis on:

• Robocall enforcement and KYC controls
• Satellite broadband and spectrum modernization
• National security in telecom infrastructure
• Disaster response accountability
• Cybersecurity certification
• The FCC signaled additional reporting and disclosure requirements tied to domestic Section 214 authorizations.
  • Section 214 compliance often overlaps with:
  • Transaction reviews
  • Certifications
  • Ongoing reporting requirements
  • Failures can trigger:
    • Fines
    • License revocations
    • Increased regulatory fees
• Wireless Telecommunications Bureau – Lower C‑Band Rulemaking – Published: April 15–16, 2026 – https://www.federalregister.gov/documents/2026/04/15/2026-07269/wireless-telecommunications-bureau-refreshes-record-on-lower-c-band-petitions-for-reconsideration
• News Release – April 20, 2026 – https://www.fcc.gov/document/fcc-issues-initial-determination-robocall-order-against-sk-teleco
• News Release – April 20, 2026 – https://www.fcc.gov/document/domestic-section-214-authorization-granted-logix

FCC Upcoming Events

• April 30, 2026 – April 2026 Open Commission Meeting
• May 14, 2026 – Cybersecurity Workshop for Broadcasters
• May 15, 2026 – Cybersecurity Workshop for Telecommunications Carriers
• May 20, 2026 – May 2026 Open Commission Meeting

Industry Recap

• South Carolina USF – 3.74% contribution factor; Applies to wireline, wireless, and VoIP, In effect since January 1, 2026, continues through April–May.
• Missouri, Madison County Subscriber Fee E911 – Added and due effective April 1, 2026
• Alaska, City of Palmer adopted changes to its sales tax ordinances; Effective April 1, 2026 the City of Palmer’s sales tax rate will increase from 3% to 4%.

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