Globalstar gets crystal clear on tax compliance

A pioneer of mobile satellite voice and data services, Globalstar provides a solution center for customizable Internet of Things (IoT) solutions, personal tracking devices, and satellite Wi-Fi connectivity for asset management, personnel safety, and lifesaving communications.

Taxes in the telecommunications industry are notoriously problematic and sometimes feature “a tax on a tax,” in which one tax nests within another tax. For example, the Federal Universal Service Fund can include some of a state’s Universal Service Fund taxes, as well as some local regulatory fees and surcharges. 

“You won’t necessarily see all these taxes and fees on a customer’s bill, but the calculation behind the scenes has to be correct or you’ll be out of compliance,” says Erwin Wilson, who is responsible for indirect tax at Globalstar. “To make matters even more complex, the rules and rates are always changing at the jurisdictional level. For example, 911 is usually regulated at the state level, and sometimes at the city and county levels. To be in compliance we have to comply with these moving targets, at every level, on a monthly basis.” 

Globalstar files in all 50 states, so there are more than 3,000 counties and nearly 20,000 cities to keep track of. “We would have to staff up the department, meaning a significant increase in headcount, to keep up with the compliance and filing requirements,” says Erwin. “We’re talking about multiple full-time jobs, and even then, I think it would be impossible.”

Instead of staffing up internally, Globalstar relies on Avalara to provide regularly updated communications tax calculations and help with filing and remittance. Avalara’s communications tax team monitors relevant statutes, regulatory rules, and rate changes. “We depend on Avalara’s expertise and their solution,” says Erwin. “They’re in the business of being right, and their technology makes it easy for us.”

Globalstar integrates Avalara AvaTax for Communications with its billing system, CSG Singleview. AvaTax powers all the necessary calculations of sales and use taxes, as well as the communications taxes, relevant fees, and surcharges. Avalara Returns for Communications allows Globalstar to offload returns preparation, filing, and remittance, improving compliance across a vast range of jurisdictions and tax regimes. 

“We’ve been highly satisfied with the results,” says Erwin. “When we migrated to Singleview, we expanded our use of Avalara into several other countries, including Canada, Australia, New Zealand, and most of Europe.” 

“In the markets where we don’t use Avalara, we have accuracy issues that cause a lot of operational headaches,” he adds. “We have never had a problem where we use Avalara, which has been very reassuring.”