Understanding your phone bill: Taxes vs Fees
We know you are familiar with the phrase ”death and taxes”, yet the meaning stopped being sweet after Brad Pitt was no longer the face of death. Movie or not, no one can escape the truth: we all pay taxes, we all hate it. It’s just how life goes: we all hate Mondays, flies in our coffee and taxes.
Having this in mind, we are trying to set the record straight in what our services are concerned and make the proper difference between taxes and fees, so that you could easily tell a good deal from a wanna be.
The Not so sneaky FUSF tax
We stand by our pledge of no hidden fees with Tello, but you might have seen some extra cost when ordering a phone plan or pay as you go credit. No need to panic!
Tello does not charge extra, but we do collect what is legally required to, like the Federal Universal Service Fee (USF) Charge. The federal Universal Service Fund (FUSF) is a Federal program created to help ensure telecommunications services are available to all consumers nationwide. This fee increases access to advanced telecommunications services to all customers in rural areas at reasonable rates and provides funding for federal programs. Good to know: the rates change for FUSF each quarter.
Another tax, another complicated name
Behold the Federal cost recovery fee. This charge’s main reason for existence is to recover amounts incurred by companies for regulatory costs and for telecommunications services for the speech and hearing-impaired & local number portability and it changes annually. This isn’t a government tax, rather a fee collected and retained to help recover certain costs we’ve already incurred.
We collect E911 taxes. Again, these are determined on the state level and have different tax rates. This tax is collected so anyone can dial the number 911 in case of emergencies.
Understanding your phone bill
Depending on your address, we may collect taxes on the State, Local, County, and City level. As you know, each state has the power to charge Additional State Taxes based upon Public Utility Commission (PUC) Guidance. If you have a question about a charge on your bill that appears to be state-initiated, the best thing to do is to contact your state PUC for details.
All the above are legal taxes that everyone charges. Tello has no extra fees added to your phone bill, so go ahead, look all you want, but you’ll never find anything else. We’re telling you, you have a better chance of winning the lottery than finding hidden fees on Tello!
So, the answer to all your questions related to extra charges with funny made up names is NO: at Tello, there are no maintenance fees, line, upgrade/downgrade fees, late fees (what the fudge is that?) activation, and so on.
This is what we strongly believe and apply to our business: Extra Fees should be Extinct!
finally a company with honest billing
Thank you for the kind words! You got it right, we are all about transparency here!
18% taxes on my $10 refill
Hello,
The taxes that are added to your purchases on Tello apply to any type of product, so unfortunately there is nothing we can do about them. They are federal and local taxes and are not imposed by us.
Your Tello team
So what would the taxed up total be for the $15 a month bill?
Hey Candice,
This depends on where you live – your state – and what exactly are you buying.
Rest assured, everything is transparent at Tello so you can see the (total) taxes in the checkout and in your invoice they are split by category.
Have a great day!
What would the actual total monthly fee be for the $15.00 5G unlimited plan in Oregon? I’m on a very low senior social security income. And I need to count every dollar
Hi Deb,
You will be able to see the taxes on the checkout page before finalizing the order.
Just add the $15 phone plan, fill in your address and you will be able to see everything there.
Hope it helps!
So how do companies like MetroPCS, Cricket, Boost, even T-MOBILE not charge taxes and fees on prepaid lines?
How do they get away with it while you have collect it?
Am curious how all this works because any saving which you provide on paygo is completely lost because of tax and fees and then just getting lowest cost monthly at any of above or few others that also fall into no tax’s or fees category.
You don’t have explain if is a business situation but did hear good things about you guys wanted for kids but just makes more sense it seems financially other way.
Much appreciated,
Alex
Hello again Alex,
It’s true that every MVNO can make different business decisions.
Tello is making an effort to keep prices as low as possible, to better-fit customers’ needs and not charge anything but what is legally required to be collected.
So while others may fave fewer legal fees that apply, check to see if they happen to charge extra per line, if they have upgrade/downgrade fees and soon, compare the overall product and value for money.
Read the fine print, compare and choose what is perfect for you and your family.
Thanks!
What are the taxes in zip code 98499? I would like to know the truly “hidden” taxes and fees before making a decision on switching to Tello.
Hi Katrina,
Thanks for reaching out. Tello doesn’t have any hidden taxes, we just collect what is legally required to.
Here’s how you can see for yourself: you can try to place an order and depending on what products you choose, you can see the taxes and totals in your checkout – you don’t have to go through with it and pay to see how everything adds up.
Even more good news: we just had a major price drop and our prices went down by 35%. I bet you can really feel the savings now.
Hope this helps,
Maria
I went to checkout and place an order and I’m not seeing those extra fees displayed anywhere. Is there anyway to view what those extra fees are _before_ paying them?
Hi, Trevor,
As you know, we only collect taxes and fees that are legally required. They vary depending on your state and local jurisdiction and can be seen on the checkout page. If you wanna have an idea about them in advance, you can always look them up online, for your area.
Thanks!
“No hidden taxes”… except for all of those “legally required” taxes you collect. Look, if one can’t learn them through your website before signing up, they are – by definition – hidden.
And “looking them up online beforehand” is BS. Virtually impossible to do.
I appreciate the fact that companies like Cricket are hiding those taxes from the users by rolling them into their prices. The advantage to that is one knows exactly what they’ll be charged. The disadvantage is that customers in low tax areas end up partially subsidizing the taxes in high tax areas.
I don’t mind Tello’s business model of charging people the taxes of their area… i just wish you were upfront and transparent about what those charges will be. If your billing computers can figure it out, then your web server computers ought to be capable of displaying it too!
Hawkeye, thanks for your message and suggestions, we value your feedback and have passed this over towards our list of imporvements.
Have a great one!
It should be illegal to Advertise a monthly fee of $10, when the actual bill ends up being $14.xx or whatever, that you won’t find out about until your first statement. Hidden or Not, that’s False advertising. If I Can’t actually PAY the $10 you are touting, then you shouldn’t be allowed to tout it !
Please be advised that all our prices are showing without the tax, because with Tello you just need to pay the State tax. That depends on your residence.
My taxes and surcharges on a $10 pay as you go are $4.75! This is in zip code 20877. You can’t tell me that my state, local and federal taxes come to 50%! That’s BS. Where’s the breakup?
Neb, unfortunately, we don’t have a say in state, local or federal taxes, but collect what is legally required to. If you feel the need, please contact our Customer Service on this issue or do some extra research about why your zip code sums up that much. Hope it helps! Thanks, Maria
My $5 plan for my son also ends up $7.22 so almost 50% taxes. There are a total of 8 different taxes and fees. I live in Washington where this state should be tax free btw! My old prepaid cricket and new visible plan is a straight flat fee. This is BS that Tello says there’s no hidden fees.
Hi Tammy,
We’re sorry you feel this way. Unfortunately, those are government taxes and since you can see them on the checkout – they are not hidden.
These taxes are imposed and all users have to pay them. Sorry, but there is not way to display them before the Checkout because we need your billing address in order to calculate them correctly.
Do you charge a line access fee? Verizon charges $20 monthly, which got slapped on sort if sneakily after I’d gotten into the transaction and wasn’t paying attention until the bill came.
Hi, there, great question!
Tello has no extra fees per line, no maintenance fee, early termination fees and so on – we don’t believe in extra fees or contracts :).
Moreover, we have free hotspot & free upgrade/downgrade anytime.
Thanks!
So aren’t you freedompop with just a different name
Hi Ron,
Tello is not Freedompop but it’s a great alternative.
Have a great day!
I’m thinking about getting Tello $10 unlimited talk, text, 1GB data. Seems great because I currently pay Puretalk $7.50 monthly for 80 minutes of talk and no data. I live on Long Island, NYS. Does anyone know how much my total $10 bill would be with NYS and federal taxes? $12? $15? Also, how do I keep my current number?
For potential customers, i have two lines in NYC, $5 recharge plan each. Total $10.
County Sales Tax: $0.51;
Federal Cost Recovery Fee: $0.16;
Federal Universal Service Fund: $0.59;
Local Gross Receipts Tax: $0.17;
Metro Commuter Trans. District: $0.04;
Ny Mta Surchg On Excise Tax: $0.08;
Ny State Excise Tax: $0.33;
Pscs – Local Prepaid Wireless: $0.60;
Pscs – State Prepaid Wireless: $1.80;
State Sales Tax: $0.45.
Total additional surcharges: $4.73 on a $10 bill.
Have another T-mobile prepaid phone. No surcharges like that. I might switch everything over to T-mobile. the fees are ridiculous.
Hi, Buddy,
We agree that every dollar counts. That’s why we do not add sneaky service fees to Tello phone plans. We only collect taxes and fees that are legally required, and they vary depending on your state and local jurisdiction.
Thank you!
The FCC does not require this charge to be passed on, but service providers are allowed to do so. These charges usually appear as a percentage of the consumer’s phone bill. Companies cannot collect an amount that exceeds the percentage of their contribution to the USF.
I’d like to know what is Tello’s percentage of their contribution to the USF, especially since the FCC does not require this charge to be passed on?
Hi Nat!
Thank you for your question. The Universal Service Administrative Company (“USAC”) establishes a quarterly contribution factor. We charge our customers the applicable rate charged to us by USAC. You can find updated rates on FCC’s website.
Rest assured we are doing our best to optimise taxing for our customers and people who have been comparing us to other operators appreciate our detailed system as fair.
Do you charge “smartphone line access” fee?
Hi Diane,
On top of the plan price we only charge Government imposed taxes, and ““smartphone line access” is not one of them.
Still, you can check for yourself as you can see the total amount to be paid on the checkout before you enter your billing details.
Hope this help,
Maria
Your “Federal cost recovery fee” sounds exactly like a hidden fee. Why is this not simply included in the quoted price up front?
When I go to a restaurant and I order a $10 item, I pay $10 (plus a fixed percentage tax). They have plenty of regulations too, but you dont see them trying to charge some bogus “food safety inspection recovery fee” after the fact.
Steve, we feel you, but unfortunately, we don’t make the rules when it comes to things like “Federal cost recovery fee”. All purchases, including those for accounts with multiple lines, are subject to regulatory sales taxes.
Thanks for reaching out & happy holidays!
My address is Littleton, CO 80123-1816 but I do not live in the City of Littleton, Colorado. The US Post Office has assigned Littleton as the mailing address for parts of three counties and several small cities. The taxes outside of the incorporated city are much lower. SoTello charged taxes based on Littleton city rates and it took six days for Tello Customer Service to respond. If their low rate plus the over taxed amount were not less than other MVNOs charged I would be elsewhere. Multiple sellers on eBay also do this.
Hello!
We apologize for the long wait in regards to the issue that you experienced, but it was more complex so it needed further investigation on our part. However, we are glad to see that everything was sorted out. Thanks!
It’s easy, Tello is not lying but are also very careful with their wording.
Tello does not charge any fees not required by gov’t or the carrier they resell. These other fees could include Upgrade, Activation, Reactivation or other made up fees to pump up revenue. Tello does not have these. Other services that say “No fees or taxes extra” or “All-in” simply add all these taxes/fees in the total they advertise but EVERY service has these added one way or another.
As to why some fees/taxes end up being upwards of 50%, blame your local/state politicians and PUCs. Some fees are per line. On higher amounts the percentage is less than lower amounts. Add all these up and you have lower amounts being assessed a larger percentage of the total. For example “XX Fee” is 1.50 per line/transaction, regardless if the cost is $5 or $30. In this example: 5+1.50=6.50 (fee adds 30% extra) & 30+1.50=31.50 (fee adds 5% extra). Other fees/taxes are percentage added and will vary depending on the cost it is applied to.
So no, Tello is not lying, just leaving up to each person to figure out their total cost.
Please see the taxes for my tello location NYC bill help me make sense of it. ATT sulfured a massive lost after a class action law suite.
Cost Recovery Surcharge $0.09
County Sales Tax $0.25
Federal Universal Service Fund $0.24
Local Gross Receipts Tax $0.05
Metro Commuter Trans. District $0.02
Ny Mta Surchg On Excise Tax $0.04
Ny State Excise Tax $0.16
Pscs – Local Prepaid Wireless $0.30
Pscs – State Prepaid Wireless $0.90
State Sales Tax $0.22
Taxes cost and tello doesn’t disclose this. Buyer beware
With Tello you will need to pay only the state tax, this depends on your residence. Before placing your order, you have a button at the checkout page to “Calculate Taxes”.
25% for taxes on a 7 dollar bill seems like a lot. Especially since Oregon doesn’t have sales tax.
Hi James,
Please note that taxes are calculated based on a combination of factors, including the specific product selected and the state where the purchase is made. The exact amount may vary depending on these variables. For detailed information on the taxes applied, please check your invoice.
Thank you!
There are companies that say no hidden cost and that is what you get. All fees is included in the package. And there is tello which said no hidden costs and suddenly i have to pay extra for some recovery fees. Dont justify saying every company charges that. Other companies(MVNO) include that and list the final prices. But tello likes to cheat. It is cheating plane and simple. I am changing carrier. YOU ARE A CHEATER.
Hello,
Please note that Tello has no hidden fees and there’s nothing extra added to your phone bill.
We do collect what is legally required and those fees are based on the type of service you have, and your geographical location, among other factors.
The final calculated fees are shown on the checkout page after you fill in your state of residence. Also, you check any invoice in your account to see everything in detail.
If you have any additional questions, do not hesitate to contact our Customer Service team.