CPUC User Fee

The Commission determines annually the appropriate CPUC User Fee to be paid by telephone corporations. This fee is based on the telephone corporation's gross intrastate revenue excluding inter-carrier sales, equipment sales and directory advertising. The purpose of this fee is to finance the Commission's annual operating budget.

Telephone corporations, including Interconnected VoIP service providers, with annual gross intrastate revenues in excess of $750,000 are required to remit this fee on a quarterly basis by the 15th of April, July, October and January. Telephone corporations with annual gross intrastate revenues of $750,000 or less shall remit the fee on an annual basis on or before January 15 (See table below). Questions about this fee should be directed to CPUC's Budget Office at 415-703-2470.

 
Use of TUFFS to pay User Fee

Telephone corporations must report and pay their user fees via the online Telecommunications and User Fee Filing System (TUFFS).

NEW TUFFS for User Fee reporting periods beginning April 2023.

  • TUFFS Login [NOTICE: A TUFFS account is created for new telephone corporations. To login into the new TUFFS, you must first set up your password through a link sent to the primary regulatory contact with the subject line "Welcome to the new Telecommunications & User Fee Filing System." If you are the primary contact for a new telephone corporation and have not received the welcome e-mail, please contact us at telcosurcharge@cpuc.ca.gov.]

Legacy TUFFS for User Fee reporting periods prior to April 2023:

Remitting User Fee Payments, UnionBank (EFT) Banking Instructions

Late Payment Penalty

The TUFFS will systematically enforce the late payment penalty of 25% of user fees due on delinquent payments.  The late payment penalty is set forth in Public Utilities Code Section 405.

User fees are due on the 15th of the month following the end of the user fee period.  The User Fee period is either quarterly or annually, depending on the telephone corporation's annual gross intrastate revenues (see above). User Fee payments not received (or delinquent) for more than 30 days are subject to a late payment penalty of 25% of User Fee amounts due.  This will be automatically calculated by the TUFFS system. 

New Standard User Fee Rate

Effective January 1, 2025, the standard user fee rate for all telecommunications corporations is 1.1% of intrastate revenues, as adopted by Resolution M-4874.

For historical user fee rates, see User Fee Rates.

 

Intrastate Revenue Subject to User Fees

“Intrastate” means a telecommunications service that originates and terminates within California. Generally, services subject to tariff (or formerly tariffed) with the CPUC are subject to the CPUC User Fees, whereas interstate services, taxes and surcharges, and financial charges and fees, are not. Intrastate services that are subject to the CPUC User Fee include, but are not limited to, residential or business lines; wireline services; pre and postpaid wireless services and any associated services, including, but not limited to:

  • Custom calling features (such as Caller ID, Voice Store and Forward, Call waiting);
  • Private line service;
  • 800/900 service; and
  • Non-recurring charges (such as installation and connection charges)

The CPUC does not prescribe one methodology to determine intrastate revenues subject to user fees. Telephone Corporations, including VoIP providers, that are required to report intrastate revenue subject to user fees may use any of the methods below to determine the intrastate revenues. Examples of reasonable methods to determine intrastate revenues include, but are not limited to:

  • FCC Safe Harbor Percentage – Carriers may apply California revenues using the inverse of the Federal Interstate Safe Harbor Percentage adopted by the Federal Communications Commission (FCC) to fund federal universal service programs for the respective type of carrier.
  • Traffic Study- A carrier may develop a jurisdictional allocation through a Traffic Study factor, representing the average usage patterns of the carrier’s own customers, and then apply this to their California revenues.
  • Books and Records- Intrastate revenues subject to the surcharge may be calculated by a service supplier based upon books and records kept in the regular course of business or for other purposes, including nontax purposes.

For Interconnected VoIP providers, the California legislature endorsed three methods of determining which revenues are subject to intrastate surcharges (see recently enacted AB 841, now codified at PU Code §285(e). Note that the revenues subject to intrastate surcharges are also used in calculating user fees. In addition to the above methods, AB 841 provided the additional option of any other “means of accurately apportioning interconnected VoIP services between federal and state jurisdictions.” 

  • User fees are not assessed on equipment cost. It is the carrier’s responsibility to make a reasonable determination of what portion of a charge is for services subject to user fees when service is bundled with equipment or other services that are not subject to user fees.
 
Requirement on Minimum Annual User Fee of $100

Pursuant to Decision (D.)13-05-035 and D.10-09-017, all carriers are required to pay a minimum of $100 in user fees based on the Commission-established rate in effect at that time or $100, whichever is greater.

TUFFS will automatically calculate the $100 minimum in user fees -

  • When revenue of $0 is reported, the last quarter will automatically display a user fee due of $100.
  • When the sum of the calculated user fees for the year is less than $100, the last quarter will be automatically adjusted to make up the difference and meet the $100 minimum for the year.

For general user fee questions or concerns, please contact telcosurcharge@cpuc.ca.gov or userfees@cpuc.ca.gov.

Reporting of Prepaid Wireless Revenues

Effective January 1, 2019, the User Fee for both prepaid and postpaid wireless is subject to the same rate, as adopted in Resolution M-4832.

From January 1, 2016 through December 31, 2018, prepaid wireless revenues, from both direct and indirect sales, and the resulting user fees were required to be reported and remitted separately from all other intrastate wireless revenues. The Mobile Telephony Service Surcharge (MTS) combined the six surcharges with the user fee to create one rate to be paid by prepaid wireless carriers.