Re: Cost Recovery Surcharge & Va Personal Property Tax Recovery for IP Transit

[Eric Dugas <edugas () unknowndevice ca>]

Had a similar issue where a provider would slap a ~10% "FCC Regulatory Surcharge" (not specified in the contract) on IP 
transit delivered in Canada. We spent multiple hours trying to resolve the issues. I ended up by de-peering from the 
three letter name company. They were the only one doing this (out of six Tier1 providers available in the city).

I don't care about paying regulatory stuff. In some places, it's part of the game. I just need my providers to be 
transparent. If you're selling a full 10G of IP transit at $0.40/Mbps, I expect to receive an invoice for $4000+tx a 
month, not $4400+tx a month.
Eric
On Jan 6 2020, at 10:56 am, Siyuan Miao <aveline () misaka io> wrote:
> I've checked my contract and there's a line:
>
> > If <redacted>’s costs to provide services to Customer increase due to reasons beyond <redacted>’s control, 
> > including annual escalations imposed by facility providers (often referred to as “Facility Cost Recovery 
> > Surcharges”), <redacted> has the right to increase the fees paid by Customer to cover such costs.
> > If any local, state, national, international, public or quasi-public governmental entity or foreign government or 
> > its political subdivision imposes any taxes (excluding taxes based on <redacted>’s net income or capital or any 
> > property taxes), fees, surcharges, or other charges or impositions on <redacted> as a result of <redacted>’s sale 
> > of Services or Customer’s use of Services, Customer shall pay any such impositions (“Additional Charges”) and 
> > indemnify <redacted> from any liability or expense associated with the Additional Charges. Taxes that arise in any 
> > jurisdiction, including, without limitation, value added, consumption, sales, use, excise, access, bypass, 
> > franchise, or other taxes, fees, duties, charges or surcharges, however designated, imposed on, incident to, or 
> > based upon the provision, sale or use of the Service.
>
> Though, I don't think it's okay to pay CRS and property tax for IPT service.
> Will try to negotiate with them again.
>
> Honestly, it's my first time to see these BS. We never have any similar issues with other providers.
> On Mon, Jan 6, 2020 at 11:29 PM William Herrin <bill () herrin us (mailto:bill () herrin us)> wrote:
> > On Mon, Jan 6, 2020 at 6:40 AM Siyuan Miao <aveline () misaka io (mailto:aveline () misaka io)> wrote:
> > > NANOG,
> > >
> > > We've recently signed contract of colocation + IP transit with a local provider in Northern Virginia.
> > > Co-location services is okay but we found something unusual on our IP transit invoices.
> > > - Va Personal Property Tax Recovery (1.8%)
> > > - Cost Recovery Surcharge (3%)?
> > > We've talked with our providers but they told us:
> > > > we use a tax engine that provides the taxes/rates to our services. If you would like further language on them, 
> > > > please let me know and I will have some one send that over.
> > > Has anyone else ran into this? If this is a legit "surcharge"?
> > > Also, IP transit isn't a property, why is there a "Property Tax" for IP transit?
> >
> >
> > Hi Siyuan,
> >
> > If it's not written in to your contract, it's a breach of contract. Either way it's a deceitfully imposed 
> > surcharge, not a state tax. Virginia does not tax the sale of services like transit and colo. More, the only 
> > personal property tax I've heard of in Virginia is on motor vehicles.
> > Regards,
> > Bill Herrin
> >
> > --
> > William Herrin
> > bill () herrin us (mailto:bill () herrin us)
> >
> > https://bill.herrin.us/