Floridians pay the 4th highest state-local cell phone tax and fee rate in the country at 16.55 percent, according to a new study by Tax Foundation. And if the federal rate of 5.82 percent is added, Floridians are actually paying 22.38% of their wireless bill in taxes and fees, on average. The U.S. average combined federal, state, and local rate is 17.05%.
According to the study’s authors, wireless consumers continue to face excessive tax burdens when compared to the tax burden on other goods and services purchased in the competitive marketplace. Floridians pay taxes and fees on wireless telephone services at a rate of more than two times the average sales tax rates that apply to most other taxable goods and services.
“Excessive taxes on wireless consumers disproportionately impacts poorer families and may have ramifications for long-term state economic development and growth,” the study states. “Higher taxes on wireless service, coupled with increased taxes on wireless investments, may lead to slower deployment of wireless network infrastructure, including 4G wireless broadband technologies that our increasingly mobile workforce relies upon for economic success.”
Washington State, Nebraska, New York, and Illinois join Florida to round out the top five states with the highest state-local rates.
The study recommends that states examine their existing communications tax structure and consider policies that transition their tax systems away from narrowly based wireless taxes toward broad-based tax sources that do not distort consumer purchasing decisions and do not slow investment in critical infrastructure like wireless broadband.
Florida is a case in point. A working group that reviewed the communications tax structure made such a recommendation in 2013, but regrettably no action was taken on the report, according to the study.
Read the Full Study HERE.
