Should Cell Phones Be Charged The Wisconsin State Tele Tax Or Just The Service?
Primal Findings
-
A typical American household with 4 phones on a "family share" program, paying $100 per month for taxable wireless service, can expect to pay well-nigh $270 per yr in taxes, fees, and surcharges—up from $260 in 2019.
-
Nationally, these impositions make up about 22.vi per centum of the average bill—the highest rate ever. Illinois has the highest wireless taxes in the country at 32.2 percent, followed by Arkansas at xxx.0 percent, Washington at 29.vii percent, Nebraska at 29.one percent, and New York at 28.6 percent.
-
Since 2008, average monthly wireless service bills per subscriber accept dropped by 26 percent, from $50 per line to about $37 per line. However, wireless taxes have increased by 50 per centum, from xv.ane percent to 22.6 percent of the average neb.
-
At the cease of 2019, over 67 percent of low-income adults had wireless every bit their phone service, and 58 percent of all adults were wireless-only. Excessive taxes and fees, especially the very high per-line charges, impose a asymmetric burden on low-income consumers. In Chicago, a family unit with four lines of taxable wireless service paying $100 per month is subjected to over $500 per year in taxes and fees.
Introduction
Taxes, fees, and government surcharges on wireless consumers increased once more in 2020, jumping from 21.vii percent to 22.6 pct of a customer'south bill.[i] An American household with iv wireless phones paying $100 per month for wireless voice service can expect to pay nearly $270 per twelvemonth in wireless taxes, fees, and surcharges—up from $260 in 2019.
State and local taxes on wireless services increased slightly, from 12.vii percent to 12.8 percent, the seventh sequent increase. The Federal Universal Service Fund (FUSF) surcharge increased from 9.1 percent to 9.8 percent of the typical wireless voice bill—a ix percent increase in 2020, following a 36 percent increase in 2019.
Fortunately for wireless consumers, price competition continues to push down the average monthly per-line toll of wireless vox service. Average acquirement per subscriber vicious for the fourth sequent year, from $41.50 per calendar month in 2017 to $36.86 per calendar month in 2020. Unfortunately, consumers were non able to fully enjoy this cost reduction because taxes, fees, and surcharges increased again.
Wireless consumers will pay an estimated $17.5 billion in taxes, fees, and authorities surcharges to federal, state, and local governments in 2020 based on the taxation rates calculated in this report. These taxes, fees, and surcharges suspension downward as follows:
- $5.6 billion in sales taxes and other non-discriminatory consumption taxes
- $half dozen.3 billion in FUSF surcharges
- $3.five billion in 911 fees, a category that includes hundreds of millions of dollars that are not actually used for 911 purposes in some states
- $2.i billion in other industry-specific country and local taxes and fees
Consumers in Illinois continue to pay the highest wireless taxes in the land. This year, cheers to large increases in the 911 fee and other country charges, Arkansas now has the 2d highest wireless taxes in the country. Wireless users in Idaho, Oregon, and Nevada pay the lowest wireless taxes.
Wireless service is increasingly the sole means of communications and connectivity for many Americans, specially young people, and those with lower incomes. At the cease of 2019, co-ordinate to the Centers for Disease Command and Prevention, most 67 percent of all low-income adults lived in wireless-only households and 58 percent of adults of all incomes lived in wireless-only households.[ii] These excessive taxes and fees—particularly those that impose loftier per-line taxes and fees—impose a disproportionate taxation burden on those least able to afford them.
Wireless Taxes and Fees Increment in 2020
This is the eleventh in a series of reports that examine trends in taxes, fees, and regime surcharges imposed on wireless vocalization service by federal, state, and local governments since 2003. The methodology, originally developed by the Council on State Tax in a 1999 report, is detailed in Appendix A.
Table one shows national trends in tax rates imposed by all levels of government on taxable wireless service betwixt 2003 and 2020. Between 2005 and 2006, wireless taxes decreased after the federal courts forced the IRS to finish the imposition of the 3 percent federal excise tax on wireless service. After that court decision, wireless tax rates dropped to a low of fourteen.1 pct. Since then, notwithstanding, wireless tax rates have climbed steadily to their current rate of 22.six percent.
| Weighted Average | |||||
|---|---|---|---|---|---|
| Wireless: Land & Local tax & fee | Wireless: Federal taxation & fee | Wireless: Federal/State/Local tax & fee | General Sales/Use Tax | Disparity — Wireless Tax Over Full general Sales Tax | |
| i/1/2003 | ten.20% | 5.07% | 15.27% | 6.87% | three.33% |
| iv/i/2004 | ten.74% | 5.48% | 16.22% | 6.93% | 3.81% |
| 7/ane/2005 | x.94% | five.91% | 16.85% | 6.94% | 4.00% |
| 7/one/2006 | eleven.14% | 2.99% | xiv.13% | 7.04% | 4.10% |
| 7/1/2007 | 11.00% | 4.nineteen% | fifteen.19% | seven.07% | iii.93% |
| 7/1/2008 | 10.86% | 4.23% | 15.09% | 7.11% | 3.75% |
| 7/1/2009 | x.74% | 4.79% | 15.53% | 7.26% | 3.48% |
| 7/ane/2010 | 11.21% | v.05% | 16.26% | 7.42% | iii.79% |
| 7/i/2012 | eleven.36% | 5.82% | 17.eighteen% | vii.33% | 4.03% |
| 7/ane/2014 | eleven.23% | five.82% | 17.05% | 7.51% | 3.72% |
| vii/1/2015 | 11.50% | half dozen.46% | 17.96% | 7.57% | 3.93% |
| seven/1/2016 | xi.93% | 6.64% | eighteen.57% | 7.61% | 4.32% |
| vii/1/2017 | 12.11% | vi.34% | eighteen.46% | seven.65% | 4.46% |
| 7/i/2018 | 12.46% | half dozen.64% | 19.10% | seven.65% | iv.81% |
| 7/1/2019 | 12.65% | ix.05% | 21.lxx% | 7.74% | iv.91% |
| seven/1/2020 | 12.82% | 9.83% | 22.65% | 7.75% | 5.07% |
| Note: Federal includes three percent federal excise tax (until May 2006) and Federal Universal Service Fund (FUSF) charge, which is set by the FCC and varies quarterly. FUSF charge every bit of July ane, 2020 is calculated by 37.1 percent interstate safe harbor times 26.five pct contribution cistron, which equals a nine.83 percentage effective tax charge per unit, http://world wide web.usac.org/cont/tools/contribution-factors.aspx. Source: Methodology derived from Committee on State Taxation, "l-State Study and Written report on Telecommunications Taxation," May 2005; updated July 2020 from state statutes, FCC data, and local ordinances by Scott Mackey, Leonine Public Diplomacy LLP, Montpelier, VT. | |||||
Tabular array 1 also separates the touch on of federal taxes and surcharges from state and local government taxes, fees, and surcharges. Throughout the menstruum, country and local taxes have been trending upward steadily, from x.twenty percent in 2003 to their current level of 12.82 per centum in 2020.
The FUSF surcharge has also increased throughout the menstruum, but with dramatic increases since 2018. In just two years, the effective rate of the FUSF surcharge increased by 48 pct, from half-dozen.64 percent to 9.83 percent of the average wireless bill. For a detailed explanation of the FUSF charge and how information technology is imposed, see Appendix B.Table 1 as well separates the impact of federal taxes and surcharges from state and local government taxes, fees, and surcharges. Throughout the period, state and local taxes have been trending upward steadily, from 10.twenty per centum in 2003 to their current level of 12.82 percent in 2020.
Table ane as well shows the general trends in average taxation rates of the sales and use tax, which is the master broad-based consumption taxation imposed by 45 states, the Commune of Columbia, and Puerto Rico. Since 2003, the average state-local sales revenue enhancement rate has increased past 0.88 percentage points—from half dozen.87 percent to seven.75 percent. During that same period, wireless taxes increased past two.62 percent points—from x.20 percent to 12.82 pct. Average wireless tax rates increased three times faster than average sales tax rates.
Wireless industry competition has led to significant reductions in average monthly bills since 2008, a tendency that accelerated between 2016 and 2020. Since 2008, average wireless monthly bills have decreased from merely under $50 per month to $36.86 per month—a 26 pct reduction—while wireless taxes take increased from 15.i percent to 22.six percent—a 50 percent increment. Unfortunately, consumers accept not enjoyed the total benefits of wireless price contest because taxes, fees, and government surcharges continue to increase.
Table ii shows wireless taxation, fee, and regime surcharge rates as of July 2020. Column 1 shows the average combined country-local revenue enhancement rate in the largest city and the upper-case letter city in each country, while column 2 shows the constructive charge per unit of the FUSF surcharge. In 2020, Illinois retained its ranking every bit the state with the highest wireless tax brunt. Arkansas moved up from the sixth highest taxes in 2019 to the second highest in 2020, followed by Washington, Nebraska, and New York.
| Land Rankings | 2020 Wireless State-Local Rate | 2019 Federal USF Charge per unit | 2020 Combined Federal/State/Local Rate | |
|---|---|---|---|---|
| 1 | Illinois | 22.37% | 9.83% | 32.20% |
| two | Arkansas | 20.21% | 9.83% | 30.04% |
| three | Washington | 19.83% | 9.83% | 29.66% |
| four | Nebraska | 19.30% | 9.83% | 29.13% |
| 5 | New York | eighteen.75% | nine.83% | 28.59% |
| 6 | Kansas | 16.68% | 9.83% | 26.51% |
| vii | Utah | 16.64% | 9.83% | 26.47% |
| 8 | Pennsylvania | 16.48% | 9.83% | 26.31% |
| 9 | Rhode Island | 15.39% | 9.83% | 25.22% |
| 10 | North Dakota | 15.26% | ix.83% | 25.09% |
| xi | Maryland | 14.95% | nine.83% | 24.78% |
| 12 | Missouri | 14.91% | 9.83% | 24.74% |
| 13 | Florida | 14.89% | nine.83% | 24.72% |
| 14 | Oklahoma | fourteen.56% | nine.83% | 24.39% |
| 15 | Due south Dakota | 14.39% | 9.83% | 24.22% |
| xvi | Alaska | 14.32% | 9.83% | 24.16% |
| 17 | Puerto Rico | 13.73% | nine.83% | 23.56% |
| 18 | California | 13.39% | ix.83% | 23.22% |
| 19 | Tennessee | 12.65% | ix.83% | 22.48% |
| 20 | Arizona | 12.64% | 9.83% | 22.47% |
| 21 | Southward Carolina | 12.63% | 9.83% | 22.47% |
| 22 | New Mexico | 12.13% | 9.83% | 21.97% |
| 23 | Georgia | 12.09% | ix.83% | 21.92% |
| 24 | District of Columbia | 12.06% | ix.83% | 21.89% |
| 25 | Colorado | 11.98% | 9.83% | 21.81% |
| 26 | Indiana | 11.96% | 9.83% | 21.79% |
| 27 | Texas | 11.84% | 9.83% | 21.68% |
| 28 | Alabama | 11.05% | 9.83% | 20.88% |
| 29 | Kentucky | 10.97% | nine.83% | 20.80% |
| 30 | Minnesota | x.72% | 9.83% | 20.55% |
| 31 | Westward Virginia | 10.42% | 9.83% | 20.25% |
| 32 | Massachusetts | 10.32% | ix.83% | twenty.15% |
| 33 | Michigan | 10.xviii% | 9.83% | 20.01% |
| 34 | Mississippi | 9.85% | ix.83% | 19.68% |
| 35 | Louisiana | nine.eighty% | 9.83% | 19.63% |
| 36 | Iowa | 9.79% | 9.83% | 19.63% |
| 37 | New Jersey | 9.07% | ix.83% | eighteen.ninety% |
| 38 | New Hampshire | nine.03% | ix.83% | eighteen.87% |
| 39 | Due north Carolina | 8.98% | 9.83% | xviii.81% |
| 40 | Vermont | 8.90% | 9.83% | xviii.73% |
| 41 | Maine | 8.71% | 9.83% | 18.54% |
| 42 | Ohio | 8.52% | ix.83% | xviii.35% |
| 43 | Wyoming | 8.47% | ix.83% | 18.30% |
| 44 | Connecticut | vii.92% | 9.83% | 17.76% |
| 45 | Hawaii | seven.83% | 9.83% | 17.66% |
| 46 | Wisconsin | seven.72% | 9.83% | 17.55% |
| 47 | Virginia | 7.03% | 9.83% | xvi.87% |
| 48 | Montana | half-dozen.73% | 9.83% | 16.57% |
| 49 | Delaware | 6.68% | 9.83% | 16.51% |
| l | Nevada | 3.46% | 9.83% | 13.29% |
| 51 | Oregon | 2.98% | 9.83% | 12.82% |
| 52 | Idaho | 2.71% | ix.83% | 12.54% |
| Weighted Avg. | 12.82% | 9.83% | 22.65% | |
| Unproblematic Avg. | 11.81% | ix.83% | 21.64% | |
| Source: Methodology from COST, "fifty-State Study and Written report on Telecommunication Revenue enhancement," May 2005. Updated July 2020 using land statutes, FCC data, and local ordinances. | ||||
Figure two shows the states by boilerplate state-local rates, without including the FUSF imposition. Other than the cluster of depression-tax states in the western United States, there does non appear to be any potent regional patterns to the distribution of high-tax and low-tax states. The New England states tend to accept lower wireless revenue enhancement rates, while the high-tax states are scattered throughout the country.
One of the longstanding arguments for reform of wireless taxation is the disparity in tax burdens on wireless as compared to wide-based consumption taxes imposed on other goods and taxable services bailiwick to sales and utilize taxes. Wireless and other telecommunications services are ane of the few services that are consistently subject field to sales and utilise taxes by states with both narrow and broad sales tax bases. Furthermore, states like Delaware, Montana, and New Hampshire that exercise non impose a full general sales revenue enhancement have specific taxes on wireless and other communications services.
Tabular array 3 ranks the states by comparing the disparity between the revenue enhancement rates imposed on wireless service to the combined state and local sales tax rate in each state. Illinois leads all states in this regard, imposing wireless taxes that are more than twice as high as sales taxes—22.1 percent versus 10.0 percent. Other states with large disparities include Nebraska, Alaska, Arkansas, New York, and Washington. New Hampshire, Delaware, and Montana—all states that practice not take full general sales taxes but impose taxes on wireless service—rank relatively high on the disparity index even though their overall wireless tax rates are relatively low by national standards. Table three also shows that ii states—Idaho and Nevada—impose lower taxes on wireless service than on other goods and services subject to the general sales tax.
Total Taxes Paid
Wireless consumers pay about $11.nine billion in taxes and fees that are specifically levied on telecommunications services but non on other taxable goods and services. This total includes approximately $vi.three billion in FUSF surcharges, $3.5 billion in 911 fees, and another $2.1 billion in other discriminatory state and local taxes, fees, and government surcharges. The remaining $v.6 billion in taxes on wireless service are not-discriminatory sales and use taxes that are imposed on other taxable goods and services.[3]
| State-Local Sales Tax Rate | State-Local Wireless Tax Rate | Wireless Over/Under Sales Tax Rate | Disparity Multiple | |
|---|---|---|---|---|
| Illinois | 10.00% | 22.37% | 12.37% | 2.24 |
| Nebraska | 7.xiii% | 19.30% | 12.17% | 2.71 |
| Alaska | 2.50% | 14.32% | 11.82% | 5.73 |
| Arkansas | 9.fifty% | xx.21% | 10.71% | two.13 |
| New York | viii.44% | eighteen.75% | 10.31% | ii.22 |
| Washington | 9.75% | 19.83% | 10.08% | 2.03 |
| Pennsylvania | 7.00% | 16.48% | ix.48% | 2.35 |
| Utah | 7.50% | 16.64% | 9.xiv% | two.22 |
| New Hampshire | 0.00% | ix.03% | 9.03% | NA |
| Maryland | 6.00% | 14.95% | 8.95% | 2.49 |
| Rhode Island | vii.00% | 15.39% | 8.39% | 2.xx |
| Kansas | 8.33% | sixteen.68% | 8.35% | 2.00 |
| N Dakota | vii.25% | 15.26% | 8.01% | 2.x |
| South Dakota | 6.50% | fourteen.39% | 7.89% | ii.21 |
| Florida | 7.25% | xiv.89% | 7.64% | 2.05 |
| Montana | 0.00% | 6.73% | 6.73% | NA |
| Delaware | 0.00% | half-dozen.68% | 6.68% | NA |
| Missouri | 8.41% | fourteen.91% | half-dozen.l% | i.77 |
| Commune of Columbia | 6.00% | 12.06% | 6.06% | 2.01 |
| Oklahoma | 8.57% | xiv.56% | 5.99% | 1.seventy |
| Kentucky | half dozen.00% | 10.97% | iv.97% | 1.83 |
| Indiana | 7.00% | eleven.96% | four.96% | i.71 |
| California | 9.13% | 13.39% | 4.27% | 1.47 |
| Michigan | 6.00% | 10.eighteen% | 4.xviii% | ane.70 |
| South Carolina | eight.50% | 12.63% | 4.13% | ane.49 |
| Massachusetts | half dozen.25% | ten.32% | 4.07% | 1.65 |
| Arizona | 8.65% | 12.64% | 3.99% | ane.46 |
| New United mexican states | viii.xvi% | 12.xiii% | 3.97% | 1.49 |
| Hawaii | 4.00% | 7.83% | 3.83% | 1.96 |
| Colorado | 8.28% | 11.98% | three.70% | 1.45 |
| Georgia | 8.45% | 12.09% | 3.64% | 1.43 |
| Texas | 8.25% | 11.84% | 3.59% | 1.44 |
| West Virginia | vii.00% | 10.42% | 3.42% | 1.49 |
| Maine | 5.50% | 8.71% | three.21% | 1.58 |
| Tennessee | 9.50% | 12.65% | 3.15% | 1.33 |
| Oregon | 0.00% | 2.98% | ii.98% | NA |
| Wyoming | 5.50% | 8.47% | 2.97% | 1.54 |
| Iowa | seven.00% | 9.79% | 2.79% | 1.40 |
| Minnesota | vii.96% | 10.72% | 2.76% | ane.35 |
| New Jersey | 6.63% | 9.07% | 2.44% | 1.37 |
| Vermont | vi.50% | 8.90% | two.40% | ane.37 |
| Mississippi | vii.fifty% | 9.85% | 2.35% | ane.31 |
| Puerto Rico | xi.50% | 13.73% | 2.23% | 1.19 |
| Wisconsin | 5.50% | 7.72% | 2.22% | i.40 |
| North Carolina | 7.25% | 8.98% | 1.73% | 1.24 |
| Connecticut | 6.35% | 7.92% | ane.57% | ane.25 |
| Virginia | 5.65% | 7.03% | 1.38% | i.25 |
| Alabama | 10.00% | xi.05% | ane.05% | one.x |
| Ohio | vii.75% | eight.52% | 0.77% | one.x |
| Louisiana | 9.70% | 9.80% | 0.ten% | 1.01 |
| Idaho | 6.00% | 2.71% | -three.29% | 0.45 |
| Nevada | 7.99% | 3.46% | -iv.53% | 0.43 |
| United states Weighted Boilerplate | 7.75% | 12.82% | v.07% | 1.65 |
| Source: Methodology from Toll, "50-State Study and Report on Telecommunications Taxation," May 2005. Updated July 2020 using state statutes, FCC data, and local ordinances. | ||||
Appendix C provides a detailed breakup of the specific taxes, fees, and regime surcharges imposed in each state, including the corresponding rates of each. To facilitate interstate comparisons, local rates imposed in the almost populated metropolis and the uppercase urban center in each land are averaged into a single rate. In the case of taxes and fees that are imposed on a flat per-line basis—for case, $1.00 per month per line—the revenue enhancement is converted from a apartment amount to a percentage by dividing the apartment amount by the industry average revenue per line of $36.86 per calendar month. For a detailed description of the methodology in this written report, please run into Appendix A.
Trends in Wireless Taxes and Fees
911 Fees
Most states impose 911 fees to fund upper-case letter expenses associated with the 911 system, and in some states these fees fund operations as well. Wireless 911 fees vary greatly by land, from a low of zero in Missouri[four] to a high of $5.00 per line per month in the City of Chicago.
In 2020, Arkansas doubled the state 911 fee from $.65 per line per month to $1.30 per line per month. Oregon increased the 911 fee from $0.75 per line per month to $1.00 per line per calendar month. Maine reduced the 911 fee from $0.45 per line per month to $0.35 per line per calendar month.
Unfortunately, co-ordinate to the Federal Communications Committee (FCC), some states and localities routinely divert 911 fees for other purposes.[v] For case, the Metropolis of Chicago used the authority granted past the legislature to increase its monthly 911 fee from $3.ninety per line to $5.00 per line, effective January i, 2018. Media reports suggested that the 911 fee increase was intended to cover a shortfall in city pension obligations.[6] The FCC report identified other states that routinely divert 911 fees paid by wireless consumers to other purposes: Nevada, New Bailiwick of jersey, New York, Rhode Island, and West Virginia.
State Universal Service Funds
Some states have their ain universal service funds (USF) that provide subsidies for many of the same purposes as the FUSF. State USF surcharges are imposed on intrastate revenues, while the FUSF is imposed on interstate revenues. In states like Arkansas, Alaska, Kansas, Nebraska, and California, high country USF surcharge rates add significantly to the overall brunt on wireless consumers. For instance, the USF charge per unit in Arkansas is eleven.25 pct of all intrastate charges. Table B1 in Appendix B lists the rates in the xx states that impose a state USF accuse.
In 2020, state USF rates were increased in Arkansas, Kansas, Michigan, and South Carolina and were reduced in Nevada, New United mexican states, and Wyoming.
State-Level Wireless Taxes
In improver to 911 fees and state USF charges, xiv states impose taxes on wireless service that are either in addition to state sales taxes or in lieu of sales taxes but imposed at a higher rate than the land sales tax. Table iv lists these states. No states increased or decreased these discriminatory country wireless taxes in 2020.
| State Gross Receipts Tax in Addition to Sales Taxation | Higher Country Tax Rate in Lieu of Sales Taxation | Wireless Tax but No Land Sales Tax |
|---|---|---|
| Indiana | District of Columbia | Delaware |
| Kentucky | Florida | Montana |
| New York | Illinois | New Hampshire |
| North Dakota | Maine | |
| Pennsylvania | ||
| Rhode Island | ||
| Due south Dakota | ||
| Source:Country Statutes | ||
Local Wireless Taxes
Many local governments also impose discriminatory taxes on wireless consumers. Many of these are legacy taxes and fees that were established during the regulated phone monopoly era that existed prior to the late 1980s. Local governments in some states take longstanding authority to impose "right-of-way" (ROW) fees on telephone companies for placing poles, wires, and other landline infrastructure on public belongings. In other states, localities have the potency to impose franchise or license fees on telephone companies in exchange for an exclusive franchise agreement to provide service within the municipality.
In the late 1990s and early 2000s, when wireless service began to displace landline service, localities became concerned about losing taxes and fees from landline phone services and sought to extend these taxes and fees to wireless services. This occurred fifty-fifty though wireless providers typically did non use the public right-of-way to place equipment or, when they did utilize public property like buildings, the usage was de minimis and paid for through negotiated rental agreements.
Local governments in 13 states currently impose some type of revenue enhancement or fee on wireless service over and above whatsoever broad-based local sales taxation. In about of these states, the local wireless tax is in addition to land taxes. California is the exception—wireless service is not subject to sales taxes just is discipline to local Utility User Taxes (UUT) at rates as high as 11 percent. Table 5 provides a breakdown of the types of local wireless taxes.
| Privilege, License, or User Taxes | State-Authorized Telecom Taxes | School Commune and Other Special District Taxes |
|---|---|---|
| Arizona | Florida | Kentucky |
| California | Illinois | New York |
| Maryland | Maryland | |
| Missouri | New York | |
| Nebraska | Utah | |
| Nevada | ||
| S Carolina | ||
| Washington | ||
| Note: Excludes local general sales taxes. Source: Land statutes. | ||
Local government taxes have a significant impact on the overall tax burden on wireless consumers in many of united states of america that rank high in the overall wireless revenue enhancement and fee brunt. In most of the top 10 states shown in Table ii with the highest wireless taxes, local taxes play a prominent function. Nebraska allows local business license taxes with rates as high equally six.25 percent. Washington allows municipal governments to impose "utility franchise taxes" with rates every bit loftier as 9 percent. New York allows New York Metropolis, other selected cities, schoolhouse districts, and certain transit districts to levy various wireless taxes in addition to county 911 fees. Finally, Florida and Illinois accept special state communications taxes with a local addition that result in rates typically two times higher than the general sales revenue enhancement rates.
Table 6 illustrates the impact of taxes and fees on consumers in selected large cities effectually the state. Wireless service is increasingly becoming the sole means of communication and connectivity for many Americans, particularly those struggling to overcome poverty. Every bit noted previously, at the stop of 2019, more than 67 percentage of all low-income adults had wireless-only service, and 58 percent of all adults were wireless-only. Excessive local taxes and fees, especially the very high per line charges like those imposed in Chicago and Baltimore, impose a disproportionate burden on low-income consumers. In Chicago, the taxes on a family with iv lines of taxable wireless service paying $100 per month are more than $500 per year—about 43 percent of their monthly bill.
| City | Taxation on iv-line vocalization plan at $100 per month | Constructive Tax Rate |
|---|---|---|
| Chicago, IL | $43.83 | 43.83% |
| Baltimore, MD | $37.03 | 37.03% |
| Omaha, NE | $32.00 | 32.00% |
| Picayune Stone, AR | $31.27 | 31.27% |
| New York, NY | $thirty.xxx | 30.30% |
| Seattle, WA | $29.73 | 29.73% |
| Philadelphia, PA | $29.43 | 29.43% |
| Table salt Lake City, UT | $29.40 | 29.40% |
| Providence, RI | $26.83 | 26.83% |
| Tallahassee, FL | $25.77 | 25.77% |
| City | Tax on Unmarried Line Vox Plan Costing $36.86 per moth | Effective Tax Rate |
| Chicago, IL | $xiii.78 | 37.39% |
| Baltimore, MD | $11.13 | 30.21% |
| Trivial Stone, AR | $10.89 | 29.55% |
| Omaha, NE | $10.74 | 29.13% |
| Seattle, WA | $x.51 | 28.51% |
| New York, NY | $x.46 | 28.37% |
| Philadelphia, PA | $10.07 | 27.31% |
| Salt Lake City, UT | $9.85 | 26.72% |
| Tallahassee, FL | $9.31 | 25.26% |
| Providence, RI | $9.30 | 25.22% |
| Source: Author's calculations, using state statutes and local ordinances. | ||
The Impact of Excessive Wireless Taxes
The popularity of wireless service, and the explosive growth in the number of wireless subscribers, has led some to question whether wireless taxes matter to wireless consumers and the wireless manufacture. However, there are two compelling reasons why policymakers should be cautious well-nigh expanding wireless taxes, fees, and surcharges. First, as discussed to a higher place, wireless taxes and fees are regressive and take a asymmetric affect on low-income citizens. Excessive taxes and fees increase the toll of admission to wireless service for low-income consumers at a fourth dimension when citizens are relying on wireless service for education and remote work during the coronavirus pandemic. 2d, discriminatory taxes may ho-hum investment in wireless infrastructure. Ample evidence exists that investments in wireless networks provide economic benefits to the broader economy because and then many sectors—transportation, health care, energy, instruction, even regime—use wireless networks to boost productivity and efficiency. These economic benefits are peculiarly important during the current pandemic because they help employees work remotely and let students to continue their studies remotely.
Network investment is important not only to consumers and businesses that utilise these networks but also to the entire American economy. A report by the International Chamber of Commerce (ICC) in Paris surveyed the show non simply from the United States and Europe but from the developing world besides.[vii] Economists that have examined the link between investments in communications and data technology infrastructure and economic growth have consistently found a strong link. Only put, wireless infrastructure investment enables an unabridged entrepreneurial culture to focus on creating applications and devices to make businesses more productive and to improve the lives of consumers. These tools in turn make businesses more productive and profitable then that they can create new jobs that generate economic activeness and revenue enhancement revenues for governments.
While nigh infrastructure investments create these types of multiplier effects, the multiplier effects for telecommunications infrastructure are college than other industries because communications and information technology are so deeply embedded in business concern processes. These infrastructure investments also benefit the government and nonprofit sectors in ways that practice non necessarily prove up direct in economic statistics, but notwithstanding make these sectors more efficient and enable them to lower the cost of providing government services.
Equally noted in the ICC report, "Remedying the discriminatory tax handling of telecom goods and services may reduce tax receipts in the short-term, but the longer-term increase in the utilise of advanced capability devices, service demand, and network deployment resulting from these tax reductions is probable to counteract this loss of revenue over fourth dimension."[eight] Policymakers need to counterbalance the trade-offs between the short-term revenue benefits of excessive wireless taxes versus the long-term economical touch on on the state from reduced infrastructure investment.
Conclusion
Wireless consumers continue to exist burdened with high taxes, fees, and surcharges in many states and localities across the United States. While state and local authorities taxes and fees were relatively stable between 2019 and 2020, pregnant increases in the FUSF over the last ii years take pushed taxes on wireless service to record-loftier levels. Excessive taxes on wireless consumers disproportionately affect low-income families and may accept ramifications for long-term state economic evolution and growth. College taxes on wireless service, coupled with increased taxes on wireless investments, may lead to slower deployment of wireless network infrastructure, including fifth generation (5G) wireless broadband technologies.
States should report their existing communications taxation structure and consider policies that transition their tax systems away from narrowly-based wireless taxes and toward broad-based revenue enhancement sources that practice non distort consumer purchasing decisions and do not irksome investment in critical infrastructure like wireless broadband.
Appendix A
Methodology
The methodology used in this written report to calculate wireless taxes compares the applicative federal, state, and local rates on wireless voice service in the capital letter city and the most populated city in each country. This methodology was adult by the Committee on State Revenue enhancement (COST) in its landmark "50-State Written report and Written report on Telecommunications Taxation," first published in 2000.
The use of a consistent methodology allows for accurate time-series comparisons across states and over time. Even so, changes in consumer demand for wireless services pose challenges when measuring the impact of wireless taxes on consumer bills. Two trends in the industry are significantly impacting the corporeality of taxes that wireless consumers pay on their monthly bills.
Offset, a growing share of wireless consumer purchases is for internet admission. U.South. Census Bureau information from 2018 suggests that about 49.seven percent of total wireless service revenues (which excludes sales and rental of equipment and other non-service operating revenue) for the industry as a whole are from the sale of internet access.[9] This percentage continues to grow equally wireless consumers utilize more internet access and less voice telephone service each yr.
Under federal law, as of July one, 2020, all states are precluded from imposing taxes on internet access. This suggests that of the "typical" consumer'south monthly expenditure of $36.86 per month, approximately $18.32 is for non-taxable internet access and $18.54 is for taxable wireless service. A consumer applying the revenue enhancement rates in this written report to their total pecker will find that the effective taxation charge per unit overstates their actual tax paid if their calling plan includes both taxable vocalisation service and exempt internet access.
Second, the report's methodology understates the tax charge per unit impact of flat rate taxes and fees—those that are imposed equally a set dollar amount per line. Under the report'due south methodology, a $1.00 per month per line tax is converted to a percent amount past dividing $i.00 by the $36.86 average monthly bill, resulting in a tax rate of 2.7 per centum in this example. Withal, these flat charge per unit taxes and fees are merely permitted to be imposed on the portion of the wireless neb that is not internet access. In this aforementioned case, if the $1.00 per month were divided by the taxable portion of the bill ($18.54), the tax rate would be v.four percent.
Notwithstanding these methodological challenges, the authors have determined that the benefits of retaining the current methodology—consequent measurement of trends in taxation rates over time—outweigh the benefits of changing the methodology to conform to contempo trends. This is particularly true since the Census Bureau has but been tracking the percent of wireless expenditures on net access since 2012, and so it would not be possible to get back and retroactively adjust data prior to 2012.
Appendix B
What Are Universal Service Funds?
The Federal Universal Service Fund
The Federal Universal Service Fund (FUSF) is administered by the FCC under open-concluded potency from Congress. The program subsidizes telecommunications services for schools, libraries, hospitals, low-income people, and rural telephone companies operating in high-price areas. The FCC has also recently decided to employ funds to subsidize broadband deployment.
The FCC has authority to set spending for these programs outside of the normal congressional appropriations process. Later deciding what to spend on the various programs, the FCC sets the quarterly "contribution cistron" or surcharge charge per unit that telecommunication providers must remit to the FUSF to generate sufficient revenues to fund the expenditure commitments. Providers may elect to surcharge these "contributions" on their client bills.
FUSF surcharges apply only to revenues from interstate telecommunications services. They currently do not apply to internet admission service, information services, and intrastate telecommunications services.
Wireless carriers generally sell plans that include either unlimited vocalization minutes or a fixed number of phonation minutes for a set amount. Since these plans include both interstate calls (bailiwick to the FUSF) and intrastate calls (non subject to FUSF), the FCC allows providers to allocate the fixed monthly plans to interstate and intrastate calls by one of ii methods. Carriers may apply "traffic studies" to prove the actual split between interstate and interstate calls for all subscribers and apply the FUSF to the aggregated interstate portion of subscriber calls.
Alternatively, carriers may use a single compatible national "safety harbor" percentage to its fixed monthly plans. The FCC currently sets this prophylactic harbor at 37.1 percent of the stock-still monthly charge. For example, when determining the FUSF, a $50 monthly wireless vocalization calling programme is accounted to include $18.55 in interstate calls and $31.45 in intrastate calls. If a carrier elects to use the prophylactic harbor, the FUSF rate would exist applied to $eighteen.55 of the bill each month.
The FUSF charge per unit is set by the FCC each quarter. For the period outset July i, 2020, the charge per unit is 26.5 pct. Thus, the FUSF charge per unit applied on assessable wireless revenues using the FCC condom harbor corporeality is 9.83 percentage (26.5 percentage times 37.1 percent).[x] Figure B1 highlights the significant growth in the FCC contribution rate since 2003.
Figure B1
Despite the growing burden on wireless consumers, Congress has shown little interest in restricting or otherwise limiting the growth of the programs funded through the FSUF.
State Universal Service Funds
States also have the authority to supplement the programs funded through the FUSF with their own programs funded through state universal service funds. The state programs are funded by surcharges applied to the intrastate portion of telephone charges. In this report, the changed of the FUSF prophylactic harbor is used to calculate the rates of the state USF in all states except Vermont, which imposes its land USF on both interstate and intrastate charges. As in the previous instance, if a consumer has a $fifty monthly wireless phonation plan, 62.ix per centum of that charge ($31.45) is accounted to exist an intrastate service subject area to the land USF charge and $xviii.55 is an interstate service not discipline to state USF charges.
Like the FUSF, country universal service fund charges do non use to internet access. State USF charges are a key factor in the high wireless tax burden in states like Arkansas, Alaska, Kansas, Nebraska, and California.
| State | Constructive Rate | Adding |
|---|---|---|
| Arkansas | vii.08% | xi.25% times FCC safe harbor |
| Alaska | 6.29% | 10.0% times FCC Intrastate prophylactic harbor |
| Kansas | 5.91% | 9.4% x FCC safe harbor |
| Nebraska | four.75% | $1.75 per line per month |
| California | 4.37% | vii.28% times FCC Intrastate safe harbor |
| Oklahoma | three.95% | half-dozen.28% times FCC safe harbor |
| Louisiana | three.50% | Carrier rates assigned past Public Service Committee |
| Vermont | 2.twoscore% | Funds 911 and other programs |
| New Mexico | 2.39% | $0.88 per line per month |
| Texas | 2.08% | 3.iii% times FCC rubber harbor |
| Colorado | 1.64% | 2.six% times FCC safe harbor |
| Utah | 1.63% | $0.60 per line per month |
| South Carolina | 1.37% | ii.eighteen% times FCC safe harbor |
| Maine | one.19% | $0.44 per line |
| Puerto Rico | 0.87% | ane.39% times FCC prophylactic harbor |
| Wyoming | 0.69% | i.1% times FCC safe harbor |
| Indiana | 0.69% | 1.09% times FCC safe harbor |
| Kentucky | 0.nineteen% | $.07 per month |
| Wisconsin | 0.18% | 0.29% times FCC safe harbor |
| Maryland | 0.fourteen% | $0.05 per month per line |
| Nevada | 0.xi% | 0.17% times FCC Rubber Harbor |
| Source: Writer's calculation from state statutes and country utility commisions. | ||
Appendix C
| State | Type of Tax | Rate | Comments |
|---|---|---|---|
| Alabama | |||
| AL Cell Service Tax | 6.00% | Admission, interstate, and intrastate | |
| E911 | 5.05% | $one.86 per month | |
| Total TRANSACTION TAX | 11.05% | ||
| Alaska | |||
| Local Sales Tax | 2.50% | Avg. of Juneau (5%) and Anchorage (0%) | |
| Local E911 | 5.29% | Anchorage: $2.00 and Juneau: $1.xc | |
| State USF | six.29% | 10.0% times FCC condom harbor | |
| TRS fee | 0.24% | $0.09 per line | |
| Full TRANSACTION TAX | 14.32% | ||
| Arizona | |||
| State sales (transaction priv.) | 5.threescore% | Intrastate telecommunications service | |
| County sales (transaction priv.) | 0.lx% | Avg. of Phoenix (Maricopa) (0.7%) and Tucson (Pima) (0.v%) | |
| Urban center telecommunications | five.90% | Avg. Phoenix (4.seven%) and Tucson (vii.i%) | |
| 911 | 0.54% | $0.20 per calendar month | |
| Total TRANSACTION TAX | 12.64% | ||
| Arkansas | |||
| Country sales revenue enhancement | 6.50% | ||
| Local sales taxes | 3.00% | Avg. Fiddling Rock (ii.v%) and Fayetteville (three.5%) | |
| Land Loftier Price Fund | seven.08% | xi.25% times FCC safe harbor | |
| Wireless 911 | three.53% | $1.30 per calendar month statewide. | |
| TRS service & TRS equipment | 0.11% | $0.04 per line per month | |
| Full TRANSACTION Tax | 20.21% | ||
| California | |||
| Local Utility User Tax | 8.00% | Avg. of LA (9%) and Sacramento (7%) | |
| State 911 | 0.81% | $0.xxx per line per month | |
| PUC fee | 0.21% | 0.34% times FCC condom harbor | |
| ULTS (lifeline) | 2.99% | 4.75% times FCC prophylactic harbor | |
| Deaf/CRS | 0.31% | 0.five% times FCC condom harbor | |
| Loftier Cost Funds A & B | 0.22% | 0.35% times FCC safe harbor | |
| Teleconnect Fund | 0.49% | 0.78% times FCC safe harbor | |
| CASF – advanced services fund | 0.35% | 0.56% times FCC safety harbor | |
| Full TRANSACTION TAX | 13.39% | ||
| Colorado | |||
| Land Sales Taxation | 2.90% | Access and intrastate | |
| Local Sales Tax — City/County | 3.82% | Avg. of Denver (5.41%) and Colorado Springs (2.23%) | |
| 911 | three.46% | Denver: $1.20 and Colorado Springs: $1.35 | |
| USF | ane.64% | 2.6% times FCC safe harbor | |
| TDD Tax | 0.16% | $0.06 per month | |
| Total TRANSACTION TAX | 11.98% | ||
| Connecticut | |||
| State sales tax | six.35% | Access, interstate, and intrastate | |
| 911 | 1.57% | $0.58 per line | |
| TOTAL TRANSACTION TAX | seven.92% | ||
| Delaware | |||
| Public Utility Gross Receipts Taxation | 5.00% | Access and intrastate | |
| Local 911 taxation | one.63% | $0.threescore per month | |
| TRS fee | 0.05% | $0.02 per line per month | |
| TOTAL TRANSACTION Revenue enhancement | 6.68% | ||
| District of Columbia | |||
| Telecommunication Privilege Revenue enhancement | 10.00% | Monthly gross charge; | |
| 911 | 2.06% | $0.76 per month | |
| TOTAL TRANSACTION TAX | 12.06% | ||
| Florida | |||
| State Communications services | 7.44% | Access, interstate, and intrastate | |
| Local Communications services | 6.36% | Jacksonville (5.82%) and Tallahassee (6.9%) | |
| 911 | ane.09% | $0.forty per calendar month statewide | |
| Full TRANSACTION Tax | xiv.89% | ||
| Georgia | |||
| Land sales tax | 3.lxxx% | 4% of "access charge" — assume $35 | |
| Local sales revenue enhancement | 4.23% | Avg. charge per unit Atlanta (four.9%) and Augusta (4%) | |
| Local 911 | four.07% | $ane.50 per line statewide | |
| TOTAL TRANSACTION TAX | 12.09% | ||
| Hawaii | |||
| Public service company tax | four.00% | ||
| Additional county tax | 1.89% | ||
| PUC Fee | 0.sixteen% | 0.25% of intrastate charges | |
| Wireless 911 fee | 1.79% | $0.66 per month | |
| Full TRANSACTION Revenue enhancement | 7.83% | ||
| Idaho | |||
| Telephone service assistance programme | 0.00% | Prepare annually past PUC (currently zero) | |
| Statewide wireless 911 | 2.71% | Boise: $1.00 per calendar month | |
| TOTAL TRANSACTION Revenue enhancement | 2.71% | ||
| Illinois | |||
| Land telecom excise tax | vii.00% | Access, interstate, and intrastate | |
| Simplified municipal revenue enhancement | half-dozen.50% | Avg. of Chicago (7%) and Springfield (6%) | |
| Wireless 911 | viii.82% | Chicago: $v per month and others: $1.50 per month | |
| TRS fee | 0.05% | $0.02 per line per month | |
| TOTAL TRANSACTION Taxation | 22.37% | ||
| Indiana | |||
| State sales tax | seven.00% | Access and intrastate | |
| Utility receipts revenue enhancement | 1.xl% | Same base equally sales taxation | |
| Wireless 911 | 2.71% | $ane.00 per month | |
| Country USF | 0.69% | 1.09% times FCC prophylactic harbor | |
| PUC fee | 0.08% | 0.13% times FCC safe harbor | |
| TRS fee | 0.08% | $0.03 per line per month | |
| Full TRANSACTION Tax | xi.96% | ||
| Iowa | |||
| State sales taxation | 6.00% | ||
| Local option sales taxes | 1.00% | Avg. of Cedar Rapids (1%) and Des Moines (ane%) | |
| Wireless 911 | 2.71% | $i.00 per month | |
| Dual Party Relay Service fee | 0.08% | $0.03 per month | |
| TOTAL TRANSACTION TAX | 9.79% | ||
| Kansas | |||
| Country sales revenue enhancement | 6.50% | Intrastate and interstate | |
| Local selection sales taxes | i.83% | Avg. of Wichita (1.0%) and Topeka (ii.65%) | |
| USF | 5.91% | 9.iv% times FCC safe harbor | |
| Wireless 911 | 2.44% | $0.90 per calendar month per line | |
| Total TRANSACTION TAX | sixteen.68% | ||
| Kentucky | |||
| State sales revenue enhancement | half-dozen.00% | Access, interstate, and intrastate | |
| School utility gross receipts | one.50% | Avg. of Frankfort (three%) and Lousiville (0%) | |
| Kentucky USF | 0.19% | $0.07 per month | |
| Kentucky TAP & TRS | 0.08% | TAP: $0.02 and TRS: $0.01 | |
| Wireless 911 | 1.90% | $0.70 per month | |
| Communications gross receipts tax | one.xxx% | Access, interstate, and intrastate | |
| Total TRANSACTION TAX | 10.97% | ||
| Louisiana | |||
| State sales tax | 3.45% | Intrastate rate | |
| Wireless 911 | 2.85% | New Orleans: $ane.25 per month and Baton Rouge: $0.85 per calendar month | |
| State USF | 3.50% | May vary by carrier | |
| TRS fee | 0.14% | $0.05 per line per month | |
| TOTAL TRANSACTION Tax | 9.80% | ||
| Maine | |||
| Land service provider taxation | 6.00% | ||
| 911 fee | 0.95% | $0.35 per month | |
| Maine USF | 1.19% | $0.44 per line | |
| MTEAF | 0.57% | $0.21 per line per calendar month | |
| TOTAL TRANSACTION Tax | viii.71% | ||
| Maryland | |||
| State sales tax | six.00% | ||
| Local telecom excise | five.43% | Baltimore: $4.00 per month and Annapolis: $0.00 | |
| Country 911 | 1.36% | $0.50 per month per line | |
| County 911 | 2.03% | Currently $0.75 per calendar month in all counties | |
| State USF | 0.14% | $0.05 per account | |
| Full TRANSACTION TAX | 14.95% | ||
| Massachusetts | |||
| State sales taxation | half dozen.25% | Interstate and intrastate | |
| Wireless 911 | 4.07% | $1.50 per month | |
| TOTAL TRANSACTION TAX | 10.32% | ||
| Michigan | |||
| State sales revenue enhancement | 6.00% | Interstate and intrastate | |
| State wireless 911 | 0.68% | $0.25 per month | |
| Canton wireless 911 | iii.01% | Detroit: $0.42 and Lansing: $1.80 | |
| Intrastate toll assessment | 0.49% | 0.78% of intrastate charges | |
| Full TRANSACTION Revenue enhancement | 10.18% | ||
| Minnesota | |||
| State sales tax | half-dozen.88% | Interstate and intrastate | |
| Local sales revenue enhancement | 1.08% | Avg. of Minneapolis (1.15%) and St. Paul (i.0%) | |
| 911 | 2.58% | $0.95 per calendar month | |
| Telecom access MN fund | 0.19% | $0.07 per line per month | |
| TOTAL TRANSACTION TAX | 10.72% | ||
| Mississippi | |||
| State sales tax | seven.00% | Access, interstate, and intrastate | |
| Wireless 911 & 911 training fee | 2.85% | $1.05 per month per line | |
| TOTAL TRANSACTION TAX | 9.85% | ||
| Missouri | |||
| State sales tax | 4.23% | Admission and intrastate | |
| Local sales taxes | 4.19% | Avg. Jefferson City (3.5%) and Kansas City (4.875%) | |
| Local business license taxation | 6.50% | Avg. of Jefferson City (vii%) and Kansas City (six% residential) | |
| Total TRANSACTION Taxation | fourteen.91% | ||
| Montana | |||
| Telecom excise revenue enhancement | iii.75% | Admission, interstate, and intrastate | |
| 911 & E911 tax | 2.71% | $1.00 per number per month | |
| TDD tax | 0.27% | $0.x per number per month | |
| Total TRANSACTION Taxation | 6.73% | ||
| Nebraska | |||
| Land sales taxation | five.fifty% | Access and intrastate | |
| Local sales tax | 1.63% | Avg. of Lincoln (1.75%) and Omaha (1.5%) | |
| Urban center business and occupation tax | 6.13% | Avg. of Omaha (half-dozen.25%) and Lincoln (half dozen.0%) | |
| State USF | 4.75% | $1.75 per line per calendar month | |
| Wireless 911 | ane.22% | $0.45 per calendar month | |
| TRS | 0.08% | $0.03 per month | |
| Full TRANSACTION Tax | 19.xxx% | ||
| Nevada | |||
| Local franchise / gross receipts | ii.03% | 5% of get-go $15 intrastate revenues | |
| Local 911 tax | 1.15% | Washoe Canton: $0.85 per month and Clark County: $0.00 | |
| State deafened relay charge | 0.16% | $0.06 per access line | |
| Nevada USF | 0.11% | 0.17% times FCC Condom Harbor | |
| TOTAL TRANSACTION Taxation | three.46% | ||
| New Hampshire | |||
| Advice services tax | vii.00% | Access, interstate, and intrastate | |
| 911 tax | 2.03% | $0.75 per month | |
| TOTAL TRANSACTION TAX | 9.03% | ||
| New Jersey | |||
| Country sales tax | six.63% | ||
| Wireless 911 | 2.44% | $0.90 per month | |
| TOTAL TRANSACTION Revenue enhancement | 9.07% | ||
| New Mexico | |||
| State gross receipts (sales) tax | 5.xiii% | Intrastate: 5.125% and interstate: 4.25% | |
| Metropolis and county gross receipts tax | 3.03% | Avg. Santa Atomic number 26 (3.3125%) and Albuquerque (ii.75%) | |
| Wireless 911 | 1.38% | $0.51 per month | |
| TRS surcharge | 0.21% | 0.33% times FCC safe harbor | |
| Country USF | 2.39% | $0.88 per line per calendar month | |
| TOTAL TRANSACTION Tax | 12.xiii% | ||
| New York | |||
| State sales taxation | 4.00% | Intrastate and monthly access | |
| Local sales taxes | 4.25% | Avg. of NYC (4.5%) and Albany (4%) | |
| MCTD sales tax | 0.19% | Avg. of NYC (0.375%); and Albany (0%) | |
| Country excise tax (186e) | 2.90% | Mobile telecom service — includes interstate | |
| MCTD excise/surcharge (186c) | 0.36% | NYC & surrounding counties: Avg. of 0.72% and Albany 0% | |
| Local utility gross receipts tax | 1.49% | Avg of. NYC (84% of 2.35%) and Albany (1%) | |
| State wireless 911 | iii.26% | $one.xx per month | |
| Local wireless 911 | 0.81% | $0.30 per month — NYC & most counties | |
| School district utility sales tax | 1.50% | Albany: 3% and NYC: 0% | |
| Full TRANSACTION Revenue enhancement | xviii.75% | ||
| North Carolina | |||
| State and loccal sales tax | seven.00% | Statewide combined charge per unit includes local rates | |
| Wireless 911 | one.76% | $0.65 per month | |
| TRS Charge | 0.22% | $0.08 per month | |
| TOTAL TRANSACTION TAX | 8.98% | ||
| Northward Dakota | |||
| State sales tax | 5.00% | Admission and intrastate | |
| Local sales taxes | 2.25% | Avg Fargo (2.five%) and Bismarck (2.0%) | |
| State gross receipts tax | 2.50% | Interstate and intrastate | |
| Statewide Interoperable Radio Network Tax | one.36% | $0.50 per line per calendar month | |
| Local 911 tax | 4.07% | Bismarck: $1.50 and Fargo: $1.50 | |
| TRS | 0.08% | Upwards to $0.11 per month (currently $0.03) | |
| TOTAL TRANSACTION TAX | xv.26% | ||
| Ohio | |||
| State sales tax | 5.75% | Access, interstate, and intrastate | |
| Local sales taxes | two.00% | Avg. of Columbus (1.75%) and Cleveland (2.25%) | |
| Regulatory fee | 0.09% | 0.139% of intrastate revenues | |
| State/local wireless 911 | 0.68% | $0.25 per month per telephone number | |
| TOTAL TRANSACTION Taxation | eight.52% | ||
| Oklahoma | |||
| Land sales tax | 4.fifty% | Access, interstate, and intrastate | |
| Local sales taxes | 4.07% | Avg. of OK Urban center (iv.125%) and Tulsa (four.017%) | |
| Local 911 | 2.03% | $0.75 per month in OK Metropolis and Tulsa | |
| USF | three.95% | six.28% times FCC safe harbor | |
| TOTAL TRANSACTION Revenue enhancement | 14.56% | ||
| Oregon | |||
| Local utililty tax | 0.00% | No revenue enhancement on wireless in Portland or Salem | |
| 911 tax | 2.71% | $1.00 per month | |
| RSPF Surcharge | 0.27% | $0.10 per month | |
| TOTAL TRANSACTION Taxation | two.98% | ||
| Pennsylvania | |||
| State sales revenue enhancement | 6.00% | Access, interstate, and intrastate | |
| State gross receipts tax | five.00% | Access, interstate, and intrastate | |
| Local sales tax | 1.00% | Avg. of Philadephia (ii%) and Harrisburg (0%) | |
| Statewide wireless 911 | iv.48% | $1.65 per month | |
| Total TRANSACTION TAX | 16.48% | ||
| Puerto Rico | IVU (Sales Tax) | 11.50% | |
| 911 fee | 1.36% | $0.50 per line | |
| USF | 0.87% | one.39% times FCC safety harbor | |
| Full TRANSACTION Tax | xiii.73% | ||
| Rhode Island | |||
| Land sales tax | 7.00% | Access, interstate, and intrastate | |
| Gross receipts revenue enhancement | v.00% | Access, interstate, and intrastate | |
| 911 and showtime responder fee | iii.39% | $1.25 per calendar month | |
| TOTAL TRANSACTION TAX | 15.39% | ||
| South Carolina | |||
| State sales tax | 6.00% | Access, interstate, and intrastate | |
| Local sales tax | 2.50% | Avg. of Charleston (3%) and Columbia (2%) | |
| Municipal license tax | one.00% | Charleston (1.0%) and Columbia (one.0%) | |
| Dual party relay charge | 0.08% | $0.03 per line per month | |
| State USF | ane.37% | 2.18% times FCC rubber harbor | |
| 911 tax | 1.68% | $0.62 / calendar month | |
| Full TRANSACTION Taxation | 12.63% | ||
| South Dakota | |||
| Land sales tax | 4.l% | Admission, interstate, and intrastate | |
| State gross receipts tax | 4.00% | ||
| local choice sales taxation | ii.00% | Avg. of Pierre (two.0%) and Sioux Falls (2.0%) | |
| 911 excise | 3.39% | $1.25 per month | |
| TRS fee | 0.41% | $0.xv per month by statute | |
| PUC fee | 0.09% | 0.15% of intrastate receipts | |
| Total TRANSACTION Tax | xiv.39% | ||
| Tennessee | |||
| State sales taxation | 7.00% | Access, interstate, and intrastate | |
| Local sales revenue enhancement | two.50% | Statewide local rate for intrastate | |
| 911 revenue enhancement | three.fifteen% | $1.16 per month | |
| Full TRANSACTION Revenue enhancement | 12.65% | ||
| Texas | |||
| Land sales taxation | 6.25% | Access, interstate, and intrastate | |
| Local sales tax | 2.00% | Austin (2.0%) and Houston (ii.0%) | |
| Wireless 911 taxation | 1.36% | $0.50 per month per line | |
| Texas USF | 2.08% | 3.3% times FCC safe harbor | |
| 911 Equalization surcharge | 0.16% | $0.06 per line | |
| Full TRANSACTION TAX | eleven.84% | ||
| Utah | |||
| State sales tax | 4.85% | Admission and intrastate | |
| Local sales taxes | 2.65% | Avg. of Common salt Lake Metropolis (2.9%) and Provo (2.iv%) | |
| Local utility wireless | 3.fifty% | Levied at 3.v% max. in SLC and Provo | |
| State 911 service charges | two.60% | $0.96 per line per month | |
| State Radio Network charge | ane.41% | $0.52 per line per month | |
| State USF | 1.63% | $0.lx per line per calendar month | |
| Full TRANSACTION TAX | sixteen.64% | ||
| Vermont | |||
| State sales tax | 6.00% | Access, interstate, and intrastate | |
| Local sales tax | 0.l% | Avg. of Montpelier (0%) and Burlington (1%) | |
| State 911/USF | 2.40% | Funds 911 and other programs | |
| TOTAL TRANSACTION TAX | 8.ninety% | ||
| Virginia | |||
| Country communications sales taxation | 5.00% | ||
| Wireless 911 | 2.03% | $0.75 per month | |
| TOTAL TRANSACTION TAX | seven.03% | ||
| Washington | |||
| State sales tax | half dozen.50% | Access, interstate, and intrastate | |
| Local sales taxes | three.25% | Avg. of Olympia (2.ix%) and Seattle (3.6%) | |
| B&O / Utility Franchise — local | seven.50% | Avg. of Olympia (9%) and Seattle (6%) | |
| 911 — state | 0.68% | $0.25 per month | |
| 911 — local | 1.ninety% | $0.lxx per calendar month | |
| TOTAL TRANSACTION Taxation | 19.83% | ||
| Westward Virginia | |||
| State sales revenue enhancement | 0.00% | No sales tax on wireless | |
| Wireless 911 / public prophylactic / tower fee | 10.42% | $3.84 per month | |
| TOTAL TRANSACTION Tax | x.42% | ||
| Wisconsin | |||
| State sales taxation | 5.00% | Access, intrastate, and interstate | |
| Local sales tax | 0.50% | Avg. of Milwaukee (0.5%) and Madison (0.5%) | |
| Police and Fire Protection Fee | 2.03% | $0.75 per month | |
| State USF | 0.18% | 0.29% times FCC condom harbor | |
| Total TRANSACTION Revenue enhancement | 7.72% | ||
| Wyoming | |||
| State sales taxation | 4.00% | Access and intrastate | |
| Local sales revenue enhancement | 1.50% | Avg. of Cheyenne (two%) and Casper (1%) | |
| TRS | 0.24% | Up to $0.25/month ($0.09 currently) | |
| USF | 0.69% | 1.i% times FCC safe harbor | |
| 911 tax | 2.03% | $0.75 per month in Cheyenne and Casper | |
| Full TRANSACTION Tax | eight.47% | ||
| ARPU= 36.86 | |||
| FCC Prophylactic Harbor = 62.9% | |||
| Sources & Methodology: Committee on State Taxation, 50-State Study and Written report on Telecommunications Tax, May 2005. Updated July 2020 by Scott Mackey, Leonine Public Affairs LLP, using state statutes and regulations. Average Monthly Revenue Per Unit (ARPU): $36.86 per Cellular Telephone and Cyberspace Association, July 2020. | |||
[1] Whenever this paper refers to taxes as a percentage of the wireless services nib, it refers exclusively to the taxable portion of that bill. Internet access is not taxable co-ordinate to federal law. More details in Appendix A. See House Judiciary Committee, "H. Rept. 113-510 – Permanent Cyberspace Tax Freedom Human action," 2013-2014, July 3, 2014, https://www.congress.gov/congressional-written report/113th-congress/house-report/510/one.
[2] Stephen J. Blumberg and Julian Five. Luke, "Wireless Exchange: Early Release of Estimates from the National Health Interview Survey, January-June 2019," National Center for Wellness Statistics, May 2020, 8,https://www.cdc.gov/nchs/information/nhis/earlyrelease/wireless202005-508.pdf.
[3] These estimates are calculated by applying the rates of percentage-based taxes in each state by the average monthly bill after excluding the estimated 49.4 pct of the average monthly neb representing cyberspace access. For flat rate per line impositions, the per line rate is multiplied past the estimated number of postpaid wireless lines.
[4] Missouri enacted HB1456 in 2018 that authorizes certain cities and counties to impose wireless 911 fees on or after Jan 1, 2019 if canonical by voters. As of this writing, no local jurisdictions had imposed a wireless 911 fee.
[five] Federal Communications Commission, "Eleventh Annual Study to Congress on State Collection and Distribution of 911 Fees and Enhanced 911 Fees and Charges for the Period January 1, 2018 to December 31, 2018," Dec. 19, 2019, https://www.fcc.gov/files/11thannual911feereport2019pdf.
[half dozen] Pecker Ruthhart and Hal Dardick, "Emanuel'due south Latest Possible Tax Hike: 911 Phone Fees," Chicago Tribune, June i, 2017, http://www.chicagotribune.com/news/local/politics/ct-rahm-emanuel-telephone-fee-increment-met-0602-20170601-story.html.
[seven] International Bedchamber of Commerce, "ICC Give-and-take Paper on the Adverse Effects of Discriminatory Taxes on Telecommunications Service," Oct. 26, 2010. https://cdn.iccwbo.org/content/uploads/sites/3/2010/ten/ICC-discussion-newspaper-on-the-adverse-effects-of-discriminatory-taxes-on-telecommunications-services.pdf.
[8] "International Sleeping room of Commerce, "ICC Discussion Paper on the Agin Furnishings of Discriminatory Taxes on Telecommunications Service," 2.
[9] U.Due south. Census Bureau, "Service Almanac Survey Latest Data (NAICS-basis)," Nov. 26, 2019, https://www.census.gov/data/tables/2018/econ/services/sas-naics.html.
[10] For the purposes of this written report, the FCC safe harbor percentage is used. This allows for consistent multiyear comparisons of taxes, fees, and surcharges.
Should Cell Phones Be Charged The Wisconsin State Tele Tax Or Just The Service?,
Source: https://taxfoundation.org/wireless-taxes-cell-phone-tax-rates-by-state-2020/
Posted by: spencerbourre.blogspot.com
0 Response to "Should Cell Phones Be Charged The Wisconsin State Tele Tax Or Just The Service?"
Post a Comment