Wireless Taxes Continue to Rise to an All-Time High
From The Tax Foundation, November 16, 2015
U.S. wireless consumers pay a combined rate of nearly 18 percent in combined federal, state, and local taxes and fees on their cell phone bills, according to our latest report. This rate is comprised of the recently increased 6.46 percent federal rate and an average 11.5 percent state-local rate.
(Hawaii Ranks 44th with a 6.3% Tax Rate)
The report’s key findings include:
- The five states with the highest state-local rates are: Washington State (18.69 percent), Nebraska (18.53 percent), New York (17.9 percent), Illinois (17.46 percent), and Missouri (14.79 percent).
- The five states with the lowest state-local rates are: Oregon (1.80 percent), Nevada (1.95 percent), Idaho (2.17 percent), Montana (6.11 percent), and Delaware (6.29 percent).
- Five cities—Chicago, Baltimore, Omaha, New York City, and Seattle—now have effective tax rates in excess of 25 percent of the customer bill.
- The average rates of taxes and fees on wireless telephone services are more than two times higher than the average sales tax rates that apply to most other taxable goods and services.
- Excessive taxes on wireless consumers disproportionately impact poorer families.
Facing continual revenue challenges, some states and cities have resorted to targeting wireless customers as a source for additional revenue. Although governments need efficient taxes to raise necessary revenue, there are compelling reasons as to why lawmakers should look elsewhere before expanding wireless taxes, fees, and surcharges.
read … Record High Taxes and Fees on Wireless Consumers in 2015