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Illinoisans pays more cellphone taxes than any other state, report says

The Center Square

A yearly measurement of cell phone taxes and fees found Illinoisans pay more than residents in any other state and the costs are increasing, according to a report.

The nonpartisan Tax Foundation compiled state taxes and local taxes from each state’s largest city and capital city. This is how the foundation determined that Illinoisans pay an average of 31 percent, or $331 a year, for the average bill. The national average was 19 percent.

“Taxes, fees, and government surcharges on wireless consumers increased from 19.1 percent to 21.7 percent between 2018 and 2019 – a 14 percent increase in the tax rate,” the report said. “The disparity between taxes on wireless voice services and general sales and use taxes grew between 2018 and 2019 as the increase in taxes on wireless voice services outpace the increase in general sales and use taxes, which only increased 1.2 percent.”

Illinois charged a 7 percent excise tax on cell phones, but there were more costs at the local level.

“If this one stood alone, it wouldn’t be so bad, but there’s also ‘simplified municipal tax,’ which in Chicago is 7 percent and in Springfield is 6 percent,” Research Analyst Ulrick Boesen said.

Cell phone excise taxes are inherently regressive, Boesen said, because many low-income and rural residents rely on their cell phones as their only means of internet connectivity.

“Among lower-income Americans, this comes off as a cash grab where you’re taxing a service that they need to purchase,” he said.

In Chicago, the annual bill for a family of four included more than $500 in state and local taxes, accounting for nearly half of the total.

Boesen said much of that was due to the city’s high 911 fee.

A number of other states diverted 911 fees to pay for other issues.

The lowest cell tax state was Oregon, which charged about 3 percent.

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