This article explains how Vonage will be applying taxes to billing for the Video API, applicable in certain US states, and in Russia and Indonesia.
We do not currently apply taxes for other countries, but your service address information (see below) needs to be up-to-date to determine this.
Frequently Asked Questions
Why am I being charged with these taxes now?
Vonage is obligated to charge appropriate sales and indirect taxes for our API services and to remit these to the correct jurisdictions. Customers will be provided with an invoice which will deliver more clarity on fees and a more seamless customer experience.
What are US sales and indirect taxes?
Sales taxes and indirect taxes are taxes charged on the sale of a product or service. In the US, these taxes may be assessed at the state, county, and municipal jurisdictional levels. Each jurisdiction categorizes Vonage products differently and may have different regulations that determine which products and services are subject to sales or indirect tax.
While some US states do not charge state sales tax on cloud or SaaS services, they may still assess local taxes within certain jurisdictions within the state.
How are the US sales and indirect taxes determined?
Indirect taxation of our services is based on the service address where Vonage services are consumed. Given the nature of API products, this is typically the user's main data center location, or where communications using Vonage APIs are originated. This service address is to be determined by the user and provided to us. Vonage cannot determine this or provide advice. Please work with your own tax advisors to determine your appropriate service address.
Sales and Indirect taxes for Vonage products depend on the service address provided by the user. If no service address is provided, Vonage uses the billing address the user has provided as their service address. Users can change this in the Account Portal or send an email to firstname.lastname@example.org if this address differs from the billing address.
Please check and update your service address information in the Video API Account Portal (at tokbox.com/account). When you log in to the Portal, administrators are prompted to verify the service address, or you can make changes to your address directly in the Billing section for your account in the Portal. If you do not have this information, please contact your finance department and assist them in entering this information into the Account Portal.
If your service address information is not updated, then by default on 15 July 2021, Vonage will use your current billing address as your service address. Since this may not be accurate for your organization, you should verify and update this information as soon as possible.
Each US state has its own methods of determining whether taxes are owed for purchasable goods or services and at what rate. A US customer must have a US service address in order to be properly assessed.
In which US states will I be charged Indirect tax?
The Company is currently obligated to collect and pay taxes in all fifty (50) US states and the District of Columbia.
It should also be noted that some states impose a Use Tax, whereby, if a Sales tax is not charged at the time of purchase, the Purchaser may be required to self-assess and remit a use tax on that purchase to a particular state. Contact your tax advisor to see if this applies to your situation.
What if I am a reseller or tax-exempt?
Resellers and tax-exempt customers (schools, governmental bodies, churches, and exclusively charitable organizations) should submit appropriate exemption documentation to email@example.com for review and approval. Once approved, the billing team will be notified to update the billing data to exempt status.
What if my service address is located outside the US?
Please refer to Non-US Sales and Indirect Tax Charges.
If you have any further questions, please contact firstname.lastname@example.org.
What are Value Added Taxes (VAT) / Goods & Services Taxes (GST) taxes and how are they determined?
VAT/GST is an indirect tax, and charged on the sale of a product or service. Vonage Business Inc, as a U.S. company, is required to charge and collect VAT/GST in some international jurisdictions and countries in which it operates, or to charge VAT/GST as a billing agent of the Vonage entity within that country that our customers may be contracted with. Each jurisdiction or country may categorize Vonage products differently and may have different regulations that determine which products and services are subject to VAT/GST.
What if I need more information about this?
Contact email@example.com for further assistance with these questions.
What if I have additional tax questions?
Reach out to your personal tax advisor with additional tax questions. As discussed above, you should work with your tax and legal advisors to determine your appropriate service address.