How to dedicate telecom dollars to service, not taxes

Taxes. They're the bane of telecom pricing. Often an unexpected cost, they vary depending on your area. Here's how to lessen your tax exposure and direct more of your telecom dollars to your actual service.

Pipe voice services across the Internet

In telecom, voice services are taxed. Internet services are not. So, if you design your solution to deliver voice services across an adequate Internet connection, such as T1 lines or Ethernet Over Copper (EoC) you can lower your taxes by 50 - 70%.

An example: A business has ten Basic Business Lines (BBLs) and a DSL connection. In this configuration, the business lines cost $400/month, and that total is taxed. The DSL connection is not taxed because it's an Internet service. If the tax rate is 15% (12 - 15% is average for Seattle) the business pays a total of $60/month in taxes.

Compare that total to this one: A business goes with 5MB EoC service and ten BBLs. Delivered across EoC, the BBLs in this solution are just $10/line. That's $100/month. With a 15% tax, the business is paying just $15/month in taxes. Plus, it significantly improves its Internet connection.

Of course, EoC costs more than a DSL connection. In Seattle, EoC starts at $399/month. But those dollars are spent on greater telecom capacity and performance, not sent to the government.

Update existing services to lower your total telecom bill, as well as your tax bill

Configuring your telecom across a more powerful Internet service does not have to be more expensive. I've lowered total telecom bills while also lowering the total amounts paid in taxes. This is doable for businesses with an existing powerhouse Internet service, like an installed T1. I secure a better price on that service or replace it with a less expensive but more powerful new service, thereby lowering their total telecom bill.

Price erosion in the marketplace has made this possible. T1 lines are less expensive than they were three years ago and new services like EOC, which itself is getting less and less expensive all the time, have made traditional T1 lines obsolete.

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