One of the provisions under consideration in the tax extenders discussion is a reinstatement of 50 percent bonus expensing for equipment. This would strengthen investment spending and boost the sluggish recovery. It has...
- The Tax Policy Blog
- Where Are Cell Phone Taxes Lowest?
Where Are Cell Phone Taxes Lowest?
As more Americans shift from traditional landlines to cell phones, state and local governments are scrambling to make up for declining phone tax revenues:
Many state and local governments consider new cell phone taxes necessary to recoup money lost from a drop in the number of standard wired phones. The number of wired phone lines nationwide fell from 167 million in 2000 to 132 million in 2004, the Federal Communications Commission reports. cell phone subscribers rose from 109 million to 182 million during that time.
The wireless industry says cell phones are already taxed heavily and often unfairly... taxes accounted for about $9 of the average $51 monthly cell phone bill last year.
The federal government levies a 6.05 percent tax on wireless telecommunications, but additional state and local taxes vary widely. Here's a table of effective state and local wireless phone taxes across the nation, compared to taxes on other industries:
Total Local, State and Federal Effective Telecommunications Taxes Compared with General Business Taxes by State, 2004
Effective General Business Taxes
Effective Telecommunications Taxes
Source: Council on State Taxation
Buy this blogger a cup of coffee!
Join the Tax Foundation's fight for sound tax policy Go
About the Tax Policy Blog
The Tax Policy Blog is the official weblog of the Tax Foundation, a non-partisan, non-profit research organization that has monitored tax policy at the federal, state and local levels since 1937. Our economists welcome your feedback. If you would like to send an e-mail to the author of a blog post, please click on that person's name to locate his or her e-mail address or visit our staff page here.