He that hath no rule over his own spirit is like a city that is broken down, and without walls. ~Proverbs 25:28

Cell Phone Taxes: Here Is What You Are Paying

Posted: 2014-10-13

Citizen Watchdog October 10, 2014 by Stephanie Kreuz

Comparing wireless taxes

shutterstock_38007880

Here’s a tax you might not typically think of: the tax on your cell phone.

It’s worth considering. According to the Tax Foundation, four cities — Chicago, Baltimore, Omaha, and New York City—have effective tax rates in excess of 25 percent of the customer bill.

They report, on average, “Americans pay an average of 17.05 percent in combined federal, state, and local tax and fees on wireless service. This is comprised of a 5.82 percent federal rate and an average 11.23 percent state-local tax rate.”

In Ohio, consumers pay an 8.45 percent in state and local taxes, on average, and 5.82 percent in federal taxes, amounting to an combined rate of 14.28 percent. This ranks as the 35th highest combined tax rate, and below the national average.

The state of Washington tops the charts at 24.42 percent, and Oregon rounds out the bottom at 7.59 percent in their combined rates.

“Wireless taxes and fees are regressive and have a disproportionate impact on poorer citizens,” said Scott Mackey of KSE Partners and co-author of the Tax Foundation report. “Excessive taxes and fees may reduce low-income consumers’ access to wireless service at a time when such access is critical to economic success.”

The report noted, “At the end of 2013, according to surveys by the Centers for Disease Control, over 56 percent of all poor adults had only wireless service, and nearly 40 percent of all adults were wireless only.”

While on average, the tax on wireless service is twice as high as the general sales tax, in Ohio there is only a 0.70 percent difference between the sales tax, and the slightly higher wireless tax rate.

2014 cell phone tax mapHeader Photo Credit: Shutterstock

 

Stephanie Kreuz

Stephanie is the editor of Watchdog Wire - Ohio. She is a graduate of Hillsdale College. You can contact her at Ohio@WatchdogWire.com for story ideas and ways to get involved with citizen journalism in the state of Ohio.

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