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

Mon Jan 6 15:56:14 UTC 2020

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 at herrin.us> wrote:

>
>
> On Mon, Jan 6, 2020 at 6:40 AM Siyuan Miao <aveline at 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 at herrin.us
> <https://bill.herrin.us/>
> https://bill.herrin.us/
>
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