As Washington and the cash-strapped state governments look for new sources of tax revenue, wireless service could be a potential target. Consumer advocacy group mywireless.org is trying to head off efforts to increase wireless taxes by showing how much most Americans already pay.
Wireless tax rates vary greatly by state, with residents of Nebraska, Washington, New York, Florida, and Illinois paying the highest rates. In New York, for example, the combined wireless tax rate is 23.67%, according to mywireless.org. New Yorkers pay both a state and local 911 tax, and local utilities and school district utilities both get tax revenue from wireless phone bills.
All mobile phone users pay a federal universal service fund tax rate of 5.82%, which goes into a fund maintained by the FCC. Service providers also pay into this fund at a rate that changes quarterly; the current proposed rate is 17.4% of interstate end-user revenues.
State and local sales taxes are also part of every wireless phone bill in all but four states. States add various amounts on top of that, like utility taxes or state universal service fees. Mywireless.org says the U.S. weighted average tax rate for wireless services is 17.18%.
The Wireless Tax Fairness Act of 2011 would put a 5-year moratorium on all new, discriminatory state and local wireless taxes and fees. The bill has passed the House but not the Senate.
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