Wireless telephone service taxes and fees have continued to remain high in 2014, at an average rate of 17.05%—more than double the average rate of general sales tax—according to a report from the Washington D.C.-based think tank,the Tax Foundation.
Of that 17.05 percent, 5.82 percent comprises the federal rate, and an average 11.23 percent makes up state-local tax rates. And while the 2014 wireless tax rate decreased to 17.05 from 17.18 percent in 2012, the rates are the highest they've been since tracking began in 2003.
Notably, consumers in seven states—Washington, Nebraska, New York, Florida, Illinois, Rhode Island, and Missouri—pay wireless taxes and fees in excess of 20 percent of their bills.
Cell phones continue to be a sole means of communication for Americans, particularly those in lower-income households - in 2013, surveys conducted by the Centers for Disease Control found that over 56 percent of low-income adults had only wireless service, and nearly 40 percent of all adults were wireless. Future increases in wireless taxes and fees will undoubtedly have an affect on low-income consumers.
Congress is considering legislation to extend the federal moratorium on state and local taxes on Internet access, but the taxes described within the report largely concern wireless voice and other taxable services. If the moratorium is not be extended by Congress, the high wireless taxes could be imposed on wireless Internet access instead.
For the full report, head to theTax Foundation's site.
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