Tax & Fee Disclosure

Understanding Taxes, Surcharges, and Fees

In addition to the Software platform and Voice service charges billed by enQ (Instant Telecom Solutions, Inc.), surcharges, taxes, fees, and other charges may be applied to your monthly invoice based on the type of service you have and the Service Address shown on your invoice, among other factors. The sections below describe taxes, fees, and surcharges that may appear as separate line items on your invoice; the list is not exhaustive.

How charges appear on your invoice

enQ charges are itemized on your invoice as follows: Software platform (SaaS subscription) — access to and use of the enQ software application; and Voice service (VoIP) — the VoIP service used to place and receive calls. The two components are priced and stated separately on your invoice because they are subject to different taxes and surcharges. Subscription fees, usage charges, early termination fees, discounts, and the Administrative Cost Recovery Fee are each apportioned between the two components and shown on your invoice.

Service Address

Taxes, fees, and surcharges are determined by the Service Address shown on your invoice, not by the billing address associated with your payment method. Please keep your Service Address current in your account settings; enQ is not responsible for taxes assessed as a result of an inaccurate Service Address.

Federal Regulatory Surcharges

Federal Universal Service Fund (FUSF)

The Telecommunications Act of 1996 requires Instant Telecom Solutions, Inc. (utilizing the tradename enQ) to contribute to the Federal Universal Service Fund ("FUSF"). The FUSF helps to make phone service affordable and available to all Americans, including consumers with low incomes; those living in areas where the cost of providing telephone service is high; public schools and libraries; and rural healthcare providers. The Federal Communications Commission ("FCC") delegates the administration of the FUSF to the Universal Service Administrative Company ("USAC"). Each quarter, the FCC adopts a "contribution factor" for FUSF support. The contribution factor is a percentage of the total interstate and international end-user telecommunications and Interconnected VoIP ("I-VoIP") revenue that each provider is responsible for contributing to the FUSF. As permitted by FCC regulations, enQ has opted to bill the FUSF surcharge as a separate line item to end-user customers. Consistent with such regulations, enQ only bills FUSF line item charges in an amount equal to the quarterly contribution factor currently in effect multiplied by the invoiced amount subject to the FUSF, the interstate and international portion of the Voice service charges. Software platform charges are not subject to FUSF. This is a permissible pass-through surcharge but is not a tax or charge mandated by the government.

Please visit USAC's website (https://www.usac.org/) for more information on the FUSF.

enQ Fees

Administrative Cost Recovery Fee (ACRF)

An Administrative Cost Recovery Fee ("ACRF") equal to 4% of total invoiced charges (excluding taxes and surcharges) applies to the Software platform and Voice service charges on your invoices. The ACRF is apportioned between Software platform and Voice service charges in the same proportion as the underlying charges and appears on your invoice as a charge rather than as a tax. The ACRF recovers costs enQ incurs to comply with federal, state, and local regulatory and tax obligations, including the items listed below, along with other carrier and administrative expenses (including costs imposed on enQ by its suppliers).

This is a permissible fee but is not a tax or charge mandated by the government. The ACRF may itself be subject to sales or use tax where state or local law includes fees in the measure of tax. The ACRF helps recover costs including the following. These are not billed as separate line items.

• Federal Telecommunications Relay Services (TRS) Fund — The TRS Fund was established by the FCC in 1993 to reimburse TRS providers for the cost of providing interstate TRS services. TRS services are telephone transmission services that enable individuals who are deaf, hard of hearing, deaf-blind, or have speech disabilities to use a traditional telephone. Under the FCC's rules, enQ must contribute a percentage of its end-user communications revenues to the TRS Fund. The contribution percentage varies annually.
• Local Number Portability Administration (LNPA) — Local Number Portability ("LNP") is a customer's ability to keep existing phone numbers when switching to another service provider. enQ must provide LNP, as well as contribute to the FCC's LNPA program, designed to defray the costs of administering LNP. enQ pays a proportionate share of the LNP costs in each region in which it operates and has customers. This fee varies frequently by region.
• North American Numbering Plan Administration (NANPA) — The North American Numbering Plan ("NANP") is an integrated telephone numbering plan for the Public Switched Telephone Network ("PSTN") serving multiple countries including the United States and its territories. It is administered by the North American Numbering Plan Administration ("NANPA"). Under the FCC's rules, enQ must contribute to the costs of numbering administration. Contributions are based on a percentage of enQ's revenues from customers using international, intrastate and interstate communications services. The percentage varies annually.
• Annual Regulatory Fee — enQ, as an interstate service provider, must pay an annual regulatory fee to the FCC. This fee varies annually.
• Transaction Tax Compliance — enQ is required to register for, collect, report and remit sales and use, communications and similar taxes and surcharges in the states and localities where it has customers, and to maintain the systems and records those obligations require. These costs apply to both the Software platform and Voice service components and vary by jurisdiction and over time.

State & Local Regulatory Surcharges

State Universal Service Fund (SUSF)

enQ may also be required to contribute to State Universal Service Funds. The funds may be used to assist in providing universal service and to support a variety of other programs at the state level. enQ collects applicable charges from its end-user customers. These charges are permissible pass-through surcharges but are not taxes or charges mandated by the government.

State Telecommunications Relay Services (TRS) Funds

Some states also require contributions to State TRS Funds to offset the cost of providing local transmission services that enable individuals who are deaf, hard of hearing, deaf-blind, or have speech disabilities to use certain communications services. Many states require enQ to remit this fee to the governing authority. enQ collects applicable fees from customers and remits them to the relevant authorities.

State Public Utility Commission Fees

Some state public utility commissions ("PUCs") impose fees on telecommunications and I-VoIP providers to fund state commission operations (in California, for example, the CPUC user fee). These fees apply to the Voice service component. enQ collects these fees from customers as permitted and remits them to the state.

911 and 988 Surcharges

The enQ service connects you only to the IRS and California Franchise Tax Board telephone numbers listed on our website. It does not provide general outbound calling and cannot be used to reach 911, 988, or any other emergency number. For this reason, state and local 911 and 988 surcharges do not apply to enQ's service.

State & Local Taxes

Sales and Use Taxes

All states, with limited exceptions, impose some form of state-level sales and use tax. The sales and use tax is generally imposed on the sale or use of tangible personal property and certain services. These taxes are intended to be passed on to the end user/consumer.

A growing number of states also tax software-as-a-service. Where a state does, enQ collects sales or use tax on the Software platform component of your charges. California: effective January 1, 2027, California sales and use tax applies to software-as-a-service (SB 122). Invoices dated on or after that date will include California sales tax on the Software platform component for customers with a California Service Address. Where state or local law includes fees or surcharges in the measure of sales or use tax, tax is computed on those amounts as well.

In many states, local jurisdictions also impose a sales or use tax. In some instances, the local sales and use tax is administered by the local jurisdiction. In other instances, the state administers the local sales and use tax.

enQ collects sales and/or use taxes as required by state and/or local law.

Communications Services Taxes

Some state and local jurisdictions impose communications-specific taxes on communications services in addition to or in lieu of sales or use tax. The communications services tax is intended to be passed on to the end user/consumer. The rates for communications services taxes are usually different from the sales and use tax rates and vary by jurisdiction.

enQ collects communications services taxes as required by applicable state and/or local law.

Gross Receipts Taxes

A number of states impose a gross receipts tax on communications service providers. In some states, gross receipts taxes are intended to be passed on to the end user/consumer. In other states, the gross receipts tax is the responsibility of the seller, and there is no pass-through to the end user.

enQ pays gross receipts taxes, and collects them from customers when required (or permitted) by applicable state and/or local law.

Local Utility Taxes

Local utility taxes are imposed by cities and counties in a select number of states.

enQ pays local utility taxes, and collects them from customers when required (or permitted) by applicable state and/or local law.

Local License Taxes

Local license taxes are imposed by cities and counties in a limited number of states.

enQ pays local license taxes, and collects them from customers when required (or permitted) by applicable state and/or local law.

Claiming an Exemption

Exemptions may apply to sales for resale and to sales to certain entities (e.g., the federal government, state and local governments, and non-profit entities).

If your organization is exempt from a tax or surcharge described above (for example, a government entity, a qualifying non-profit, or a purchaser for resale), send a valid, fully completed exemption or resale certificate for the relevant tax to support@callenq.com. Exemptions are applied prospectively to invoices issued after enQ receives and accepts the certificate; enQ does not refund taxes collected on earlier invoices. A tax exemption does not waive the ACRF itself, except where required by federal or state law.