At the top of the list for highest state tax and fee rates on wireless consumers you will find….NEBRASKA!! In fact, many Nebraska consumers in some urban jurisdictions pay nearly 24% in wireless taxes and fees – three times higher than the 7% state sales tax rate on their general goods and services purchased every day in a local store. Three times higher in taxes just in order to communicate!
A new economic study from partner and economist for KSE Partners LLP, of Montpelier, Vermont, and former Chief Economist for the National Conference of State Legislatures (NCSL), Scott Mackey, ranks all 50 States and the District of Columbia, in terms of their monthly wireless tax and fee burden on American consumers.
The 1.5 million Nebraska wireless consumers currently face the nation’s highest (more than 18%) state and local tax and fee rate. AND then face the highest combined (nearly 24% with federal USF taxes) tax and fee rate on their monthly wireless communications services. When CTIA-The Wireless Association® calculated the approximately 1.5 million Nebraska wireless subscriptions with consumers paying an average bill of around $48 per month, an estimated annual tax burden of $140 million is put on the backs of hard-working Nebraska consumers, businesses and their families.
However, there may be some good news. In 2011, the political winds in Lincoln may finally be shifting back in the favor of wireless consumers. The Revenue Committee and the Nebraska Legislature are considering legislation (LB 165) that would reform the state’s disproportionate and discriminatory municipal ‘business & occupation’ services tax – B&O tax rates range from between 3% to 6.25% per month in many Nebraska jurisdictions – on consumers. Passage of this legislation would save an estimated $21 million annually for consumers at the end of a proposed six-year tax phase-out. The measure would seek to prevent cities from increasing their discriminatory local telecommunications taxes (telecom taxes in Nebraska rank much higher than taxes levied on other businesses) even further, and then begin to phase out those taxes. This high tax and fee rate is clearly of concern to Nebraska consumers who overwhelmingly support reform according to recent consumer/voter polling data.
One state at a time and across Capitol Hill in 2011, we’ll continue to work every day to see that monthly wireless tax & fee rates on consumers are fair and consistent for the more than 292 million American wireless subscriber connections.