WASHINGTON-State and local taxes imposed on telecom services are more than double the average tax assessed on general business, according to a new study released today by the Council On State Taxation.
The study shows the average state and local effective tax rate on telecom services is 14.17 percent compared with 6.12 percent for general business nationwide.
“Tax laws in the states are antiquated and take money out of the pockets of every American telecommunications consumer,” said Stephen Kranz, tax counsel for COST and an advocate of tax simplification. “The fact that we require telecommunications providers to file over 170 tax returns per day demonstrates that the time for unequivocal tax reform is long past.”
COST represents corporations-including telecom carriers-with interstate business.
The group said the average telecom provider in 2004 filed an average of 47,921 returns compared with 7,501 returns for the average general business-a reflection, according to the group, of the fact that telecom firms have 6,683 more taxing jurisdictions with which to contend, and that these taxing jurisdictions impose multiple taxes on telecom providers and customers.
The mobile-phone industry is battling municipal and state taxes around the country.
“While a handful of states have taken steps to simplify their telecommunications tax structures, much broader reform is needed to reduce the high level of telecommunications taxation and administrative weight imposed by state and local governments,” said COST.
