A new report by economist Scott Mackey and the non-partisan Tax Foundation shows that the excessive rate of wireless taxation on American consumers is on the rise across the country.
The national average rate for wireless taxes jumped from 17.05 percent to 17.96 percent. Washington State once again has the highest combined wireless tax rate, which now exceeds 25 percent. Florida (21 percent) dropped from the 4th highest taxed state to 7th thanks to a reduction to state’s Communications Services Tax. Seven other state’s now join Washington and Florida with rates in excess of 20 percent (Nebraska, New York, Illinois, Missouri, Rhode Island, Arkansas and Pennsylvania).
Some of the report’s main findings include:
- On average, American consumers are now taxed at a rate of nearly 18% in federal, state and local fees on wireless service.
- The average rates of taxes and fees on wireless phone service are more than double the average sales tax rate.
- Wireless consumers annually pay about $5.8 billion in excess of the normal state and local sales taxes imposed on the purchase of other goods and services. This is in addition to $5 billion in Federal Universal Service Fund surcharges.
- Excessive wireless taxes and fees disproportionately impact poor families, many of whom rely on wireless as their main form of communication.
And here are this year’s top ten highest taxed states for wireless:
- Washington – 25.15%
- Nebraska – 24.99%
- New York – 24.36%
- Illinois – 23.92%
- Missouri – 21.25%
- Rhode Island – 21.16%
- Florida – 21.12%
- Arkansas – 20.77%
- Pennsylvania – 20.60%
- Kansas – 19.99%
(See the full rankings here)
Wireless taxes are discriminatory and regressive – they hit seniors, minority communities, working families and small businesses especially hard. It just seems unfair to target a service that we rely on for business, education, entertainment, healthcare, Internet access, personal communication, public safety – and everything in between, with such a disproportionate tax. This is especially true for the 45 percent of American households who only have wireless telephones.
State lawmakers should follow Florida’s lead and look for opportunities to reduce these high rates on a service that is so essential to our daily lives.
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