Tue, Oct 26, 2021 11:02 AM
By Jeremy Lott | The Center Square, The Center Square
(The Center Square) – Washington residents now pay the third-highest fees on cellphones in the nation, a new report shows.
Next door Idaho, meanwhile, has the lowest cellphone taxes in the country.
Washington’s increase of 0.5% this year to 20.02% is part of a broader trend.
“A typical American household with four cell phones on a 'family share' plan, paying $100 per month for taxable wireless service, would pay nearly $300 per year in taxes, fees, and government surcharges – up from $270 in 2020,” Tax Foundation report co-authors Ulrik Boesen and Scott Mackey wrote.
Using that baseline, Boesen said, “In Washington, a family of four with four lines, paying $100 per month, will pay approximately $22.75 per month in taxes” at the state and local level.
But that’s not the end of it.
“That’s just state and local. The federal tax adds another $11.80 per month,” Boesen said.
That adds up to about $34.55 a month in taxes and fees. Only residents of Illinois and Arkansas pay more.
Meanwhile, Idahoans pay a lot less in cellphone taxes. At 2.83%, Idaho's cellphone tax bite is the smallest in the nation.
Assuming the family of four paying $100 scenario, Idaho residents would pay about $5.70 a month for local taxes, plus the federal Universal Service Fund charge, for a total monthly cellphone tax bill of about $17.50.
For Idahoans, Boesen said, “Their only tax on wireless plans is the 911 fee. They don’t levy the general sales tax on those services, and they don’t have a special telecommunications tax like many other states.”
One of those states is Washington.
“Washington’s rate is high due to high state and local sales tax rates and high local utility franchise taxes. Due to the lack of an income tax, Washington relies on a different mix of tax revenue than most other states,” Boesen said.
Pacific Northwest neighbor Oregon also has low cellphone taxes by national standards at 7.71%. Idaho ranked 50th of 50 states, Oregon ranked 45th and Washington ranked third.