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Wireless Taxes

Over 45% of businesses state Mobile devices are essential to their operations. Tablets, smartphones, and Wi-Fi service sales are growing exponentially. Companies are taking advantage of newer technologies to cut costs and improve efficiency. Yet… There is a hidden issue that most people are unaware of.

The problem centers on the amount of taxes and fees levied on wireless services, which continues to be a growing burden. Between federal, state, and local taxes, along with regulatory and 911 fees, these additional charges are significantly increasing your costs. The average tax rate on mobility is over 17%, far surpassing the tax rate on other goods and services. To view an infographic on this, click here. Currently, the state with the highest taxes and fees on wireless services is Washington, with a combined rate of 25.15%, followed closely by Nebraska, New York, and Illinois.

The federal Universal Service Fund (USF) fee alone has nearly tripled over the last 10 years! This fee contributes to a fund which subsidizes telecommunication services for rural high-cost areas, along with schools, hospitals, and libraries. All telecommunications providers are required to contribute to this fund based on a percentage of revenue, yet most companies choose to recover these fees by passing them on to the customer.

Other fees include a 911 charge, which helps pay for emergency services, a Local Number Portability fee, which allows phone numbers to be retained by the customer, even when switching service carriers and a Telecommunications Relay Service, that helps pay for the relay center that translates calls for people with hearing or speech disabilities.

One way to find some relief from this burden is to use ComAudit’s Wireless Tax Optimizer service, which can not only reduce your state and local taxes, but reduce your monthly rate plan expenses as well.

For a list of wireless taxes and fee rates by state, visit taxfoundation.org.