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 taxA tax is a mandatory payment or charge collected by local, state, and national governments from individuals or businesses to cover the costs of general government services, goods, and activities. es 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 TaxationShare