Q: One of the taxes listed on my private line service invoice is labeled “fed reg fee & property tax.” Why would I be seeing property taxes on a telecom invoice?
A: The Property Tax listed on your invoice is a property tax allotment surcharge. Some providers including AT&T and Sprint assess this type of recovery surcharge on customers to help recoup the property taxes they pay. Surcharges can be assessed to subsidize any telecom-related or non-telecom related activity. Although the word tax is included within the name of this surcharge, it is not a tax on customers but rather a fee imposed by the provider to help pay their own taxes. Unlike taxes imposed on customers which are black and white (you are either tax-exempt or not), surcharges are often negotiable as these kinds of fees are regulated by the FCC (or state PUC) but not mandated upon the customer.
Q: As I have been doing research on Telecom Expense Management suppliers, I find frequent reference to both software and SaaS products. What is the difference between these two types of product offerings?
A: A software product is a traditional on-premises software program designed to be installed within the customer’s own network environment. SaaS, or Software as a Service, is a form of software application delivery where the supplier creates and hosts a web-based application and allows customers to access it over the Internet. Customers do not pay for owning the software itself but rather for using it. SaaS is currently the preferred industry term for this type of product, replacing the previously established term ASP (Application Service Provider). It can also be referred to as off-premises software or computing in the cloud.
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