Illinois imposes higher taxes and fees on wireless services than any other state in the country, with its combined state and local tax rate reaching 20.91 percent, according to a new Tax Foundation study. That rate on wireless services is more than double Illinois’ average state and local sales tax rate (9.38 percent).
These taxes particularly impact lower-income households, who rely more heavily on mobile devices for phone service.
After Illinois, the other states in the top five are Alaska (19.49 percent), Washington (19.41 percent), Nebraska (18.84 percent), and New York (18.56 percent). The average wireless tax rate in the U.S. is 12.46 percent.
“Excessive taxes on wireless consumers disproportionately impacts poorer families and may have ramifications for long-term state economic development and growth,” the report says. “Higher taxes on wireless service, coupled with increased taxes on wireless investments, may lead to slower deployment of wireless network infrastructure, including fourth and fifth generation (“4G” and “5G”) wireless broadband technologies—a key element to the future success of Smart Cities.”
The full report can be found here.
The Tax Foundation is a Washington, D.C.-based think tank, founded in 1937, that collects data and publishes research studies on U.S. tax policies at both the federal and state levels.The Foundation’ is organized as a 501(c)(3) tax-exempt non-profit educational and research organization.