What The Heck Is The "DC Cellular Surcharge Residential" Fee?

Kimberly writes:

My concern is over another fee that I get nailed with every month that I had never noticed… Not only do I have to pay a federal universal service charge, but the District of Columbia, where I live (obvs), charges me another time – to the tune of $8.90 a month. That seems exorbitant and arbitrary! Not a good combo! What the hell is this and who do we complain to?

While perhaps exorbitant, the fee isn’t arbitrary….

Even though you might think otherwise by the way one is plastered to everyone’s ear there, the District of Columbia considers a cellphone a luxury. So, they assess a luxury tax on it, determined as being 11% of your bill, pre-taxes and fees. Contact the Mayor’s office and ask to be directed to those in charge of local taxes so you can file a complaint.

We were about to get down on Kimberly for not calling customer service herself but she may not have had much luck if she tried. When we called AT&T, they weren’t very helpful. What is this tax? “It’s a telcom tax…it was decided by the representatives of the District of Columbia. All the carriers in the area charge it.” What is the tax for, where does the money go? “It’s a tax…AT&T doesn’t charge any taxes unless the government makes it.” Gee, thanks. When we called Verizon, we just gave a DC zip code and our rep was able to run down all the extra wireless taxes for the area and come up with the answer. In this customer service scrimmage, Verizon wineth.atntbill.jpg

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  1. Falconfire says:

    Not a shock. DC has to be one of the most corrupt city governments in the county… funny when you think about the fact that people actually run our country from there.

    Actually not nearly as funny as fitting I would suppose.

  2. Zaphâ„¢ says:

    If I lived in DC and hit free parking does that mean I get the money in the middle of the board?

  3. davebg5 says:

    People from DC should still be operating under the 20 year moratorium that denies them the right to complain about anything relating to local government as a result of re-electing a crack head like Marion Barry.

    Consider this a stoopid tax for the stoopid people of DC.

  4. hypnotik_jello says:

    come on man, DC rules! (Aside from that obvious lack of representation)

    “Bitch set me up”

  5. Greeper says:

    Just do what everyone else does and change your address in VA. Order online billing, and voila! Of course, you are sucking money from the welfare state that is DC. How will the mnethadone clinice thrive if everyone takes their tax dollars to real municipalities?

  6. swalve says:

    Cell phones aren’t a luxury?

  7. Ruthven says:

    It’s a Utility User’s tax, if that makes it sound any better. It’s 10% for residential customers; the 11% is only for nonresidential customers (i.e., businesses). It’s also collected on land lines, not just wireless. The tax is imposed on the telecommunication companies “for the privilege of providing toll telecommunications in the District,” then passed on to the customer.

    Yeah, um … I work for a tax software company :-)

  8. morganlh85 says:

    I think that’s silly…the PHONE is a luxury sure, then tax the PHONE not the SERVICE. That’s a hefty tax to put on cell phone service.

  9. darkened says:

    I think it should be illegal to bill customers tax you are required to pay from the direct cost of your business operation.

  10. tedyc03 says:

    *sigh* I live in DC and I *only* have a cell phone. Does that mean the city will waive the tax for me, since it’s not apparently a luxury to have a normal phone but it *is* a luxury to have a cell phone? Or does the fact that I can have the phone work elsewhere mean that it’s a luxury?

  11. FLConsumer says:

    There’s a similar thing here in Tampa with electricity, but it’s actually a bit worse:

    There’s a Franchise Fee (which goes to the city/county), which is 4.950%, then there’s a “City Tax” which is 6.21%, so 11.16% tax on the “luxury” of electricity. Mind you, the city has no problem dragging some old fart from their home or taking your kids from you if you don’t have electricity in your home here. Some “luxury” when it’s mandated by the state.

  12. nonzenze says:

    The simple solution, of course, is to have your phone in a different area code (I suggest 503 or 971 in Oregon) that has low taxes. See the link at the bottom for a list of states with low taxes.

    Consider that a “local” number is totally meaningless these days, this is a small hassle to pay – although changing your number is a PITA you’ll only have to do it once.

    See: [www.forbes.com]

  13. ratnerstar says:

    @Falconfire:

    Can you back that statement up? Under Williams and now Fenty, DC has had an extremely competent and not particularly corrupt government for more than eight years. We have high taxes, yes, but maybe they could be lowered if Congress would allow us to institute a commuter tax, like most major cities do.

    And the local city government doesn’t run the country, you know.

  14. slungsolow says:

    What’s great about this, is any over payment goes to the back to the company, not the person who paid it.

  15. itsgene says:

    True to form, the collection of this tax is pretty poorly done. When I lived in DC, I simply got a Virginia phone number on my cell phone to avoid the tax. Even though my billing address was clearly in Washington, I was never charged the DC tax — I assume because my number started with 703.

  16. fluiddruid says:

    Having a cell phone is not really a luxury. I have one – but no home phone. Why is a home phone not a luxury but a cell phone is?

  17. Tonguetied says:

    @darkened:

    All business pass on the taxes they pay to their customers. Sometimes it’s overt, otherwise it’s just included in the cost of the product they sell.

    However in this case I believe the tax is intended for the consumer.

  18. hellinmyeyes says:

    I think the bigger issue, as Ben mentioned, is not why they are collecting a luxury tax, but what this tax is meant to fund? Education? Clinics? Homeless aid? Special interests? I almost can forgive the ridiculous excuse that the universal service fund is, but what is this??

  19. slungsolow says:

    @Tonguetied: from DC Code § 47-3902a(1)
    A tax shall be imposed on all wireless telecommunication companies for the privilege of providing mobile telecommunications service to a customer with a place of primary use within the District. The rate for nonresidential customers shall be 11% of the monthly gross charges from the sale of District-based wireless telecommunication services and the rate for residential customers shall be 10% of the monthly gross charges from the sale of District-based wireless telecommunication services. The tax shall be imposed and administered according to the provisions of § 47-3922. The tax under the mobile telecommunications service tax provisions of this chapter may be separately stated as a line item on the customer’s bill.

    ***

    The key phrase is “may be separately stated as a line item on the customer’s bill.” The law doesn’t outright state that this is to be billed directly to the constomer.

    ***

    It also should be noted that there is a provision in § 47-3922 stating:

    No charges for mobile telecommunications service shall be taxable under this chapter if the customer’s place of primary use is outside the District.

  20. slungsolow says:

    @hellinmyeyes: 1% of it goes towards the DC Baseball Stadium, otherwise it goes into the general fund. All of the tax code is up on Westlaw, and the easiest way to get to it is from [dccouncil.dc.gov]

  21. VicMatson says:

    All I can say is DC residents tend not to pay tax in a lot of areas but they do have cell phones.

  22. Tank says:

    “this is a fee imposed on us by a government office, that we pass on to our customers, it does not impact our profitability.” – bullshit, your choices are to either collect a dollar from a million customers, or pay the million out of your pocket. what’s that you say – collect the dollar from a million customers? “Yeah, that way WE don’t have to pay it.”

  23. overbysara says:

    @ratnerstar:

    SING IT RATNERSTAR!

  24. ExtraCelestial says:

    luxury tax?? what is this monopoly?? im so glad im 21 and a full time student and i know little to nothing about tax except the fact that i dont pay any.

  25. dcdulce says:

    @vicmatson: “not pay alot of Tax”? Please. We pay ALOT of taxes, State income tax, Federal Tax, Sales tax…what do we get in return? C’mon DC residents! Tell ‘em what we get?

  26. gwc2321 says:

    My charge was $20.23! I wish I could do without this damn phone!

  27. Anonymous says:

    I dont live in the district and havent lived for a decade. I have a DC number. Last month i switched from sprint to ATT, and ATT is charging me that DC residential surcharge. Sprint did not. Why? Att argues that it is not a surcharge on DC residents but on 202 area codes. To me, clearly, these fees are imposed on residents, not on people who took that number from a decade ago and have been living elsewhere since.
    Can someone point to me at the exact letter of the law/rule?
    Thanks