Cellular telephone users in New York State pay the third highest taxes for the service in the country, according to a new study.
The Tax Foundation, a nonpartisan think tank based in Washington, D.C., found New Yorkers pay an average tax rate of 24.64 percent on wireless service. The rate includes federal, state and local taxes that are used to pay for 911 and other items.
Nationwide, the average tax rate for cell service is 18.46 percent, with the federal portion representing 6.34 percentage points. New York has ranked No. 3 in annual studies by the foundation since 2010.
This year, the highest average tax rate for cell service is 25.58 percent in Washington state followed by 25.1 percent in Nebraska. The lowest average rate, 8.32 percent, is in Oregon.
“Reform of communications taxes in states with excessive tax rates would position those states to attract additional wireless infrastructure investments that generate economic growth,” report authors Scott Mackey, Joseph Bishop-Henchman and Scott Drenkard said in a statement on Wednesday.
They also said lower cell taxes would provide “relief to low-income wireless users.”
New York also is home to one of the largest disparities between cellphone taxes and sales taxes on other consumer purchases: 2.2 times this year. The biggest disparity is 8.8 times in Alaska.
Of New York’s 24.64 percent rate, 18.3 percentage points are from the state, New York City, other cities, counties, school districts and transit districts, and 6.34 percentage points are from the federal government. On Long Island, school districts do not levy a tax on wireless service, according to Lorraine Deller, executive director of the Nassau-Suffolk School Boards Association.
Morris Peters, a spokesman for Gov. Andrew M. Cuomo’s Division of the Budget, said revenue from cellphone taxes supports public safety communication systems such as 911, and first responders. “This measure provides critical funding to help first responders communicate faster and respond sooner,” he said on Thursday.
The report’s authors noted that “intense competition produced a large reduction in the average monthly cost of wireless service” nationally compared with 2016. “Unfortunately, consumers were not able to fully enjoy this price reduction because taxes, fees and surcharges continue to remain stubbornly high,” the authors said.
TAXING CELL SERVICE
States with the highest and lowest average tax rates:
Washington State, 25.58%
New York, 24.64%
National Average, 18.46%
SOURCE: Tax Foundation