Earlier this week, Joe Henchman of the Tax Foundation and Scott Mackey of KSE Focus LLP released a study of the tax burdens faced by wireless consumers in 2015. At close to 18 percent, the national average for wireless taxes and fees are at their highest levels.
With a highly competitive and innovative marketplace, wireless costs should have fallen more than they have. Instead, government tax increases offset much of the savings consumers should have experienced. As Henchman and Mackey write, “The average monthly wireless bill dropped from just under $49.94 in 2009 to $46.64 in 2016, a price decrease of nearly 7 percent. At the same time, the tax rate increased from 15.5 percent to nearly 18 percent.”
Though Florida successfully cut the Communications Services Tax in the first half of 2015, the state remains an aberration. With a combined state-local rate of 18.69 percent coupled with a nationwide standard Universal Service Fund rate of 6.46 percent, Washington state leads the country with a combined rate of over 25 percent! On the other end of the spectrum, Washington’s neighbor, Oregon, has the lowest combined rate of 8.26 percent.
Given the growing reliance on wireless devices, this study should serve as a wakeup call for state and local lawmakers looking to reform their tax laws in a consumer-friendly manner.
A copy of the study can be found here.