In an August 2025 decision, the New York Division of Tax Appeals ruled that T-Mobile Northeast LLC’s recovered Federal Universal Service Fund (FUSF) fees are subject to sales tax when included in bundled wireless service plans. The ruling addresses whether FUSF fees, federally authorized charges carriers collect from customers to fund nationwide telecommunications access, are taxable under New York Tax Law §1105(b).
T-Mobile had argued that FUSF fees should be excluded from taxable receipts, citing federal sourcing rules and recent decisions treating similar charges as nontaxable. However, the Administrative Law Judge determined that when FUSF fees are part of a bundled charge for mobile telecommunications services, they are considered part of the total taxable receipt, even if separately listed on the invoice. The ruling distinguished this case from a recent Time Warner decision involving VoIP services, where certain fees were deemed nontaxable when separately stated.
This decision reinforces that mobile service providers cannot unbundle FUSF fees to avoid tax on bundled wireless plans in New York. (For full details, see DTA No. 850185, In the Matter of the Petition of T-Mobile Northeast LLC.)