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Alert: Change in Tax for Baltimore City Customers

Baltimore City recently passed a law which imposes a per line charge of
$3.50 on all owners of telecommunications facilities, effective August 1,
2004 and did away with the Baltimore City excise tax on local service (12%
or 5% rate, depending on type of service). Essentially, the new law
imposes a fee on Verizon (and other carriers, including wireless carriers)
which Verizon then surcharges back to Baltimore City customers. All state and federal agencies, as well as non-profits, with service addresses in Baltimore City will now have to pay the fee. Previously, non-profits and government accounts were exempt from the local excise tax.

The only exemptions from the fee are Lifeline customers and wholesale and
resale customers. CLECs and other carriers will be responsible for
collecting the fee from their customers.

The new fee takes effect with the first bill rendered in August. However,
due to the complexity of the changes required by the law, billing
systems will not be ready to bill the revised fees on August 1. Since
Verizon no longer has the authority to charge the excise tax beginning
August 1, Verizon will not be billing any Baltimore City excise tax during
August. Customers will be charged for two months' worth of fees to collect
August and September fees on bills that are issued during September.