To the average person reducing wireless taxes may not seem like a pertinent issue. However, if you take a look at your cell phone bill and scroll down to view how much you pay in taxes and surcharges each month, its relevance becomes clearer. As the amount you pay in taxes racks up each month, that equates to extra money that could have been used to buy more groceries, put more gas in your car, or even put more money in your pockets to spend on yourself or a loved one.
The wireless taxes fight is particularly special to under-served and minority communities. Minorities over index on cell phone use and typically use their cell phones as their primary mode of communication. According to the Pew Research Center, 13% of Americans with an annual household income of less than $30,000 per year are smartphone-dependent. Additionally, 12% of African Americans and 13% of Latinos are smartphone-dependent, compared with 4% of whites. Most importantly, nearly half (48%) of smartphone-dependent Americans have had to cancel or shut off their cell phone service for a period of time because the cost of maintaining that service was a financial hardship. According to the CTIA’s annual survey, every minute, Americans: exchange 3.6 million text messages (SMS); exchange almost 300,000 videos and photos (MMS); and use 7.7 million MB of data. As time goes on, Americans will be more and more dependent on cell phone usage.
With current trends showing an increase in cell phone use, particularly in our communities, many States have begun to tackle the wireless taxes issue to provide relief to wireless customers. Let’s take the Sunshine state, for example. Recently, the Florida House and Senate passed a tax cut package that includes a $100 million annual Communications Service Tax (CST) reduction on wireless services. The total tax savings is expected to be around $430 million for Florida taxpayers and will save Floridians nearly $20 a year on every $100 spent on monthly cell phone service plans. Currently, Florida has the 4th highest wireless tax rate in the country and Floridians pay over 22% in federal, state and local taxes on their monthly wireless bills. The Florida House and Senate should be commended and we hope that other states follow suit.