New York State Has Third Highest Taxes on Cellphones and Wireless Data

Written By: Robert Cox

Iphone dollarsignPC Magazine is reporting that New York is one of five states with taxes and fees over 20%. In a survey conducted by KSE Partners, New York ranked third highest in the country.

1. Nebraska: 23.69%
2. Washington: 23%

3. New York: 22.83%

4. Florida: 21.62%
5. Illinois: 20.90%

Oregon has the lowest taxes and fees at 6.86%.

The survey reports that “consumers pay over 16 percent on wireless taxes and fees, compared to 7.4 percent for other taxable goods.” Also that “wireless taxes grew three times faster than the retail sales rate between 2007 and 2010.”

Why is our wireless tax burden higher than ever? The report highlights a couple perpetrators, but as a general principle the report suggests that legislators and Congressmen are targeting the wireless industry for tax money to relieve the burden from more recession-starved industries.
Your wireless taxes and fees come in five parts: federal tax, state sales tax, state and local 911 fees, and local “utilities” charges. In 2010, the federal Universal Service Fund (USF) surcharge grew more than any other fee, to 5.05 percent. This marks an increase of 0.9 percentage points since 2007, compared to 0.2 percentage points from state and local charges. The USF is a tax imposed on wireless carriers, which pass the fee on to consumers, to subsidize telecommunications service for schools, libraries, hospitals, and rural telephone companies (and their customers).

… there are two things wireless consumers can do to try to reduce these fees: first, contact your state legislators and urge them to reduce some of the archaic taxes “designed in an era of one monopoly provider.” Second, contact your Congressmen to reduce the rapidly growing USF charge.

Full report here.