FAQ: Sales and Indirect tax charges for Video API accounts beginning July 15th, 2021

FAQ on our Taxation rules for Vonage Video API Accounts

This FAQ explains how Vonage will now be applying taxes to billing for the Video API - applicable in certain U.S. States, and in Russia and Indonesia.

Q1: 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 updated invoice which will deliver more clarity on fees and a more seamless customer experience. 

We will start applying the appropriate taxes and fees as a line item on your bill, as applicable, to Video API billing starting on July 15th, 2021

 

Q2: What are U.S. sales and indirect taxes? 

Sales taxes & indirect taxes are taxes charged on the sale of a product or service. In the U.S., 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 and/or indirect tax.

 

Q3: How are the U.S. sales & 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 customer’s main data center location, or where communications using Vonage APIs are originated. This is to be determined by the customer.

Sales and Indirect taxes for Vonage products depend on the ‘service address’ provided by the customer. If no service address is provided, Vonage uses the billing address the customer has provided as their service address. Customers can send an email to video.api.finance@vonage.com if this address differs from the billing address.

We are asking you to 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 will now be prompted to verify your 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 please assist them in entering this information into the Account Portal.

If your service address information is not updated, by default on July 15, 2021 Vonage will use your current billing address as your service address. Since this may not be accurate for your organization, we are asking you to verify and update this information as soon as possible. If we do not have a physical billing address for you, then by default on August 1, 2021 we will use our own Vonage HQ address in Holmdel, New Jersey, USA as your service address. We ask you to update your information to avoid this default being applied. 

Each U.S. state has its own methods of determining whether taxes are owed for purchasable goods and/or services and at what rate. A customer must have a U.S. service address in order to be assessed.   

 

Q4: In which U.S. states will I be charged Indirect tax?

The Company is currently obligated to collect and pay taxes in the following thirty two (32) U.S. states 

Alabama

Arizona

California

Colorado

Connecticut

Florida

Georgia

Iowa

Illinois

Indiana

Kansas

Kentucky

Massachusetts 

Maryland

Maine

Michigan

Minnesota

Missouri 

North Carolina

Nebraska

New Jersey

New Mexico

Nevada

New York

Ohio

Oklahoma

Oregon

Texas

Utah

Virginia 

Washington

Wisconsin

     

 

Q5: 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 taxexemptions@vonage.com for review and approval. Once approved, the billing team will be notified to update the billing data to exempt status.

 

Q6: What if my service address is located outside the U.S.?

Tax is charged based on the service address. 

  • For service addresses based in the U.S., U.S. sales and indirect tax will be applied according to state and local rules.
  • For service addresses based in Russia, 20% Value Added Tax (VAT) will be applied.
  • For service addresses based in Indonesia, 10% VAT will be applied.

Tax shall be applied based upon service address as set forth above, regardless of where your billing address is. If a VAT number can’t be obtained, please contact video.api.finance@vonage.com  as we will need to handle this on a case by case basis. 

Vonage continues to monitor its tax requirements in all countries we do business in.  Based on individual country requirements, we may need to file in additional countries in the future and will provide updates accordingly.

 

Q7: 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. Nexmo 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.

 

Q8: What if I need more information about this?

Although we’ve taken steps to make these updates as easy as possible, we understand that you may have questions. Please feel free to contact video.api.finance@vonage.com for further assistance with these questions.

 

Q9: What if I have additional tax questions?

We suggest that you reach out to your personal tax advisor with additional tax questions

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