Death By Cellphone Taxes, And Cheating It
For products that don't kill you, we usually pay 6.9%, but for some states have seen fit to tax cellphones at exorbitant rates, like Illinois' 21.05% or New York's 21.71%. Why? Probably because people don't notice or complain very much and so the states get tidy chunk of extra revenue. One Forbes writer who moved from New York to L.A. was still stuck paying New York taxes, the highest in the country. When he complained, Verizon said they couldn't do anything because they link area of primary usage to your area code. If he wanted to pay L.A. rates, he would have to get an L.A. number, and give up his New York number. Instead, he went and bought a phone in Idaho, provided an Idaho address, and switched to paperless billing. Now he enjoys the small potatoes rate of 7.71%. He admits that this "probably crosses the line." One must also admit that cellphone taxes have crossed the line, as have cellphone companies that shortcut the Mobile Telecommunications Sourcing Act by determining the "area of primary usage" based on your area code or billing address, instead of detecting where you actually use the phone the most. Inside, a list of cellphone taxes by state.
Cellphone Taxes By State, High To Low
(Tax percentage Includes State-Local Tax, Federal Excise Tax and Federal Universal Service Fund Fee)
New York 21.71%
Florida 21.60%
Washington 21.52%
Illinois 21.05%
Nebraska 20.61%
Texas 19.67%
Rhode Island 19.55%
Pennsylvania 19.05%
California 18.66%
Washington, D.C. 18.05%
South Dakota 17.49%
Tennessee 17.05%
Missouri 16.60%
Arizona 16.54%
North Dakota 16.42%
Wyoming 16.15%
Kansas 15.80%
Utah 15.73%
Arkansas 15.69%
Kentucky 15.46%
Indiana 15.10%
Oklahoma 15.06%
Colorado 14.85%
Mississippi 14.55%
Minnesota 13.58%
New Hampshire 13.35%
Virginia 13.23%
North Carolina 13.13%
Georgia 13.12%
New Mexico 13.11%
Ohio 13.11%
Alabama 12.93%
Vermont 12.75%
Maryland 12.55%
Michigan 12.55%
Iowa 12.01%
Maine 12.01%
South Carolina 11.98%
Connecticut 11.89%
Hawaii 11.62%
New Jersey 11.48%
Massachusetts 11.11%
Wisconsin 11.03%
Deleware 10.97%
Montana 10.47%
Louisiana 9.87%
Alaska 9.53%
Oregon 7.75%
Idaho 7.71%
West Virginia 7.42%
Nevada 6.62%
Cellphone Taxes By State, Alphabetical
Alabama 12.93%
Alaska 9.53%
Arizona 16.54%
Arkansas 15.69%
California 18.66%
Colorado 14.85%
Connecticut 11.89%
Deleware 10.97%
Washington, D.C. 18.05%
Florida 21.60%
Georgia 13.12%
Hawaii 11.62%
Idaho 7.71%
Illinois 21.05%
Indiana 15.10%
Iowa 12.01%
Kansas 15.80%
Kentucky 15.46%
Louisiana 9.87%
Maine 12.01%
Maryland 12.55%
Massachusetts 11.11%
Michigan 12.55%
Minnesota 13.58%
Missippi 14.55%
Missouri 16.60%
Montana 10.47%
Nebraska 20.61%
Nevada 6.62%
New Hampshire 13.35%
New Jersey 11.48%
New Mexico 13.11%
New York 21.71%
North Carolina 13.13%
North Dakota 16.42%
Ohio 13.11%
Oklahoma 15.06%
Oregon 7.75%
Pennsylvania 19.05%
Rhode Island 19.55%
South Carolina 11.98%
South Dakota 17.49%
Tennessee 17.05%
Texas 19.67%
Utah 15.73%
Vermont 12.75%
Virginia 13.23%
Washington 21.52%
West Virginia 7.42%
Wisconsin 11.03%
Wyoming 16.15%
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Comments:
uh, that isn't true at all. at least not for verzion. i've copied and pasted this from my account. my phone number is a Virginia number, but i live in DC. and i have to pay dc taxes.
"Your service and roaming charges are taxed based on your place of primary use (PPU). Generally, we will use the residential or business address you provide when signing up for wireless service as your PPU.
You can change your place of primary use to a different address by selecting the "update" link below."
@ConnerC: It's still a SIM card, and I can't imagine the provider not being able to issue a new one identical save for the number saved on it, or use a SIM reader to edit the number saved on the one I have now. There's certain standards that ALL SIMs must have under the GSM standard.
I do hope that it's as simple as going in and explaining and getting the number issued. Too bad as far as I know you can't assign a single phone to two different numbers for an overlap period so that your old number works for a while until everyone who needs your number knows the new one. The only way I know of is to get the number ported to an asterisk system and use forwarding to bounce calls to the new number, and I can't see AT&T releasing it for that purpose -- not that I have an Asterisk system handy here in MO.
My sister moved from NJ (11.48%) to AZ (16.56%) and kept her NJ number, area code and all, even though her bill is sent to her AZ address. It may require some locals to call Long Distance to reach her, but for most, they have LD plans or have IN calling. So NY'ers, use cousin Guido's address in NJ and get a NJ area code.
@Buran:
While it is a SIM card, only a special subset of the AT&T ones will work in an iPhone.
That, and I'd see how long you can skate using your old number. When my friend went to school out of state, she never bothered to tell them. Three years later, she's moving to another state and still has the original number.
Just get a free number from [www.grandcentral.com] and point it to your cell. I've had them for about a year to keep a local # in a different state. Plus you I give it to vendors when I suspect SMS spam. They got acquired by Google but so far i have not noticed any evil doings.
My cell phone has an Arizona (16.54%) area code and I now live in Texas (19.67%). But I'm only paying 12.5% in taxes and fees (8.5% of which is state and local). And I don't see "federal excise tax" anywhere on my bill.
I assume this is a state average and your local rate may vary?
Has anyone else calculated the actual rate and compared to the chart? Or is it just that the chart is 2 years out of date?
@yagisencho: I used to live in Seattle and if the public services are anywhere near the high quality they were then, then it's worth the tax hit.
@itonix: Now that's an idea. Does it pass through Caller ID so I'd know who was calling? (I have a few custom ringtones assigned to a few contacts).
Not even a year old, did you people forget this already?
[consumerist.com]
I live in LA, have a NY area code (from when I lived there). Didn't want to pay NY taxes anymore, so I switched my phone's "address" to NV.
Voila, I now pay NV taxes. Still get my bills in Cali, and everything is registered to Cali. Still have my NY area code.
so what happens when you have a family plan, the account is addressed in nj, the primary line is a 201 (nj), and the secondary line is a 917 (ny)? does that mean the primary line pays nj taxes and the secondary line pays ny taxes?
i guess that's not so bad, but still...seems weird.
btw, the ny number, primary usage is all in nj.
and this is verizon wireless
@muddymaesuggins: Well, thats not entirely true either. For all the extra charges, I get about 11.5% on top of my bill.
Monthly Access Charges
Current Calling Plan ...................59.99
15% Access discount ................-9.00
WPP Insurance - Asurion .............4.99
............................................$55.98
Verizon Wireless' Surcharges and Other Charges & Credits
Fed Universal Service Charge ........1.02
Regulatory Charge ......................0.07
Administrative Charge .................0.70
............................................. $1.79
Taxes, Governmental Surcharges & Fees
IL State E911 Fee ......................0.73
IL State Sales Tax ......................0.22
IL State Telecom Excise Tax ........3.80
..............................................$4.75
so, $6.51 for taxes and fees, from a $55.98 bill, comes out to 11.5%

















Ouch. When I move from MO to FL I'll probably have to get a FL area code at some point. Looks like I'm in for it.
I'm on AT&T -- is it a huge hassle with them to change your number? I'm under contract right now, in case that's a factor, using an iPhone. I know ideally it should be as simple as a SIM swap on the phone side, but I don't know about the provider side (they have to change your account and all).