Today, I was puzzling through my twenty page cell-phone bill – a bill I found, as expected, to be nearly incomprehensible. The irony is that, for most months, the bill totals (within pennies) an identical amount. For this month, the bill was several dollars higher, so I was determined to discover why it was higher.
Alas, that is a task fit to challenge even the most adept and experienced financial whiz… but a task that leads to very curious surprises and incongruities along the way. It was at this point that, quite fortuitously, I ran across an article that reported the results of a study released in late January by the Tax Foundation, a non-partisan Washington D.C. think tank.
The study detailed, analyzed, and compared the various taxes and fees that each of the fifty states allows to be charged by cell phone companies within that state. The results were illuminating and quite telling. Can you guess how Illinois stacked up against other states with regard to extraneous taxes and fees on cell phone bills?
As you know from past articles in this space, Illinois regularly ranks near the top of such lists that compare Illinois with other states. Examples include: 1) “The Most Poorly Managed State Finances”, 2) “The Least Desirable State in Which to Retire”, 3) “The State with the Lowest Public Pension Funding Level”, 4) “The State with the Highest Number of Recent Governors Who Have Been Jailed”; 5) “The State Most Likely to be Described as: ‘The Greece Next Door’.”
Well, the Tax Foundation has granted Illinois a new distinction! We rank among the “Top Five States with the Highest Cell Taxes and Fees!” When will the accolades for Illinois cease? Among the report’s findings are the following:
- The average U.S. cell phone user pays taxes and fees of approximately 17.2% (based on a recent KSE Partners study);
- Approximately 11.4% of those are state and local charges;
- Cell phones are among the most heavily taxed items commonly used. Although we all know about “sin taxes” on cigarettes, alcohol, guns, etc., the Foundation points out that, on a percentage basis, these mobile phone taxes can be as much as, or greater than, those “sin taxes”;
- The top five states for highest cell fees/taxes are (listed from number five to number one): Illinois, Florida, New York, Washington, and Nebraska;
- In Illinois, each cell user pays (on average) 21.8% in additional federal, state, and local taxes or fees!
After grasping that non-startling fact about Illinois, I proceeded to attempt a dissection of my own marathon cell bill. Sure enough, extra fees, taxes, charges appeared everywhere -- complete with bizarre or bureaucratically obtuse descriptions. After all, “confound and confuse” is a watchword when it comes to finance and taxes in Illinois.
I finally discovered that my billing discrepancy arose within the “extra taxes” category. And curiously, I discovered that, among the four phones for which I pay on our contract, all of which were started in one northwest suburb, three were charged a local fee based in that very town while one was mysteriously charged a higher fee from a town some 16 miles east. Go figure! Maybe that town, much like the state of Illinois, is so broke that it scrounges for extra revenue wherever it can get it. http://taxfoundation.org/article/state-and-local-governments-impose-hefty-taxes-cell-phone-consumers
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