For the third year in a row, states and the federal government have raised discriminatory taxes on wireless phone and broadband service. According to a comprehensive study in this month’s State Tax Notes, the average American pays a whopping 16.26% on their wireless phone and broadband bills, with Nebraska residents paying as much as 23.69%.
Much of the blame can be laid at the feet of the federal government, which has raised the federal Universal Service Fund Tax from 2.99% in 2006 to 5.05% today. However, the problem also comes from state and local governments, which continue to raise telecom and 9-1-1 taxes, only to place the revenue into the general fund for unrelated spending. By targeting telecom taxes instead of broad-based income or sales taxes, politicians can make their actions go relatively unnoticed, while continuing to raise taxes on virtually every citizen.
Today, the average state-local tax rate for wireless is 11.21% – a full 3.8% higher than the average state sales tax rate. Even worse, all but three states tax wireless higher than they do the sale of general goods or services. Even New Hampshire – which has no general sales tax – levies an 8.18% tax on cell phones and wireless broadband.
CLICK HERE to write your lawmakers telling them to freeze your wireless taxes.