Starting Jan. 1, several cities in Utah, including Salt Lake City, Cedar City and South Salt Lake, will levy a $1-per-month tax on cellular phones to tap what city officials see as a substantial revenue source.
Salt Lake City Mayor Rocky Anderson first proposed the tax in May when the city’s 2001 budget was announced.
For years, most municipalities in the state have imposed a franchise tax up to 6 percent on monthly telecommunication bills, as well as electricity and gas, according to The Salt Lake Tribune. Increased mobile-phone use has city officials in Utah scrambling to take advantage of their revenue-producing power. The tax is expected to garner more than $1.5 million for Salt Lake City in the first six months of next year alone.
There is speculation that the tax may only be temporary, as local officials, telecommunications executives and lawmakers have said they want to revamp the state’s complicated telecommunication tax structure, and not just slap yet another tax on consumers, said the Tribune. But a more permanent mobile-phone tax could be implemented in the future.
Charges for 10 taxes already appear on consumers’ telephone bills in Utah, including a $4.35 charge for federal access and a 7-cent tax for the Utah poison control center.
One major problem with the tax is that it is based solely on billing address. An individual or business using a mobile phone could use an unincorporated county billing address to escape paying it.
In total, 14 cities agreed to implement the tax and seven have declined.
