Hidden costs driving up your cell phone bill - Spokane, North Idaho News & Weather KHQ.com

Hidden costs driving up your cell phone bill

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Hidden costs driving up your cell phone bill Hidden costs driving up your cell phone bill
KHQ.com - Local, state and federal governments, 911 systems and even school districts tack on taxes and surcharges to your wireless bill that end up costing American cell phone customers an extra 17.2%, on average, according to the Tax Foundation. And guess what? Washington state tops the list at 18.6%. Wireless customers in the state could have up to 12 different taxes and surcharges. That basically means a $60 cell phone bill would actually cost the average customer $70.32.

The charges differ, but every American today pays 5.82% of their cell phone bill to the federal Universal Service Fund. The Universal Service Fund is the umbrella program covering various ventures that are designed to make telephone communications universally available to all Americans.

Some opponents to the current wireless tax structure say that states, cities and other districts see cell phone bills as an way to dodge the political fallout of raising other taxes. Scott Mackey, head of a government affairs and strategic communication company, says “excessive taxes and fees may reduce low-income consumers' access to wireless service at a time when such access is critical to economic success.” Additionally, Mackey says, targeted cell phone taxes may slow investment in wireless infrastructure by lowering consumer demand for wireless service.

  • The five states with the highest state-local rates are: Washington State (18.6 percent), Nebraska (18.48 percent), New York (17.74 percent), Florida (16.55 percent), and Illinois (15.81 percent)
  • The five states with the lowest state-local rates are: Oregon (1.76 percent), Nevada (1.86 percent), Idaho (2.62 percent), Montana (6.00 percent), and West Virginia (6.15 percent)
  • Four cities—Chicago, Baltimore, Omaha, and New York City—have effective tax rates in excess of 25 percent of the customer bill

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