Taxes and Your Mobile Phone

Many cell phone users have noticed that the taxes and fees attached to their wireless services have been increasing steadily for several years. Across the country, the average rate of these taxes and fees is approximately 16.3%. These costs, on top of the numerous other state/local taxes (such as sales tax) can really put a dent in your budget.

The Cell Tax Fairness Act (H.R. 1521) was passed by a House Judiciary subcommittee last year to ban any new state or local taxes on cellular phones for the next five years. A study done by the National Taxpayers Union showed that mobile phone taxes increased four times faster between 2003 and 2007 than taxes on other general goods/services.

Earlier this month, the IRS issued guidelines for the tax treatment of employer-provided cell phones. If an employer provides their worker with a mobile phone for business purposes, the use of that phone is generally considered non-taxable to the employee.

For more information about cell phone taxes, please see the following links:

‘ www.tax-news.com/IRS_Issues_Guidance_On_Tax_Treatment_Of_Mobile_Phones

‘ http://news.cnet.com/8301-30686

‘ www.washingtontimes.com/the-cell-phone-tax-burden

‘ www.slate.com/id/2285352

‘ http://taxprof.typepad.com/taxprof_blog/cell-phone

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