Florida Has The 4th Highest Cell Phone Tax Rate In The U.S.

By: Melissa Roberts

With more and more Americans choosing to live without landline phones, cell phone plans and the tax revenues they generate have become a significant part of Florida’s state and county budgets. According to estimates in the National Health Statistics Reports, 34.4 percent of Florida adults and an estimated 43 percent of Florida children live in households that have only wireless service. This is compared to around 40 percent of adults and 45 percent of children in the U.S. at the time of the study.

DYK_Chart_Cell

Graphic Source: From http://www.ctia.org/your-wireless-life/how-wireless-works/wireless-quick-facts

Florida taxpayers pay an average local and state tax rate of 16.55 percent on cell phone and cable television service in Florida, according to the Tax Foundation. This is more than double the average state and local sales tax of 6.62 percent.

“The proposal to cut taxes on cell phones and cable services is great news not only for our customers, but also for all Florida families,” said Joe York, President of AT&T Florida. “AT&T looks forward to working with the Legislature to ensure our customers are able to keep more of the money they earn.”

Florida and 44 other states pay a higher tax rate on wireless phone plans than their general sales tax rate. Adding to the confusion over cell phone tax rates in Florida is that pre-paid phone services are currently taxed at the regular sales tax rate, rather than the higher rate on wireless plans.

When federal taxes are added, studies indicate that Floridians pay more than a 22.3 percent tax rate on wireless phone plans. According to a study by the CDC:

  • 34.4 percent of Florida adults have only wireless phone service
    8.8 percent have only landline service
    2.1 percent have no phone service
    The remaining 54.7 percent have both landline and wireless service

Florida’s high tax rates on communications services are a larger burden on low-income Floridians. With an estimated 54.7 percent of U.S. adults living in poverty having only wireless service, relief in the form of lower communication service tax rates will benefit low-income Floridians the most.

The Florida Legislature is now considering proposals to lower communication service taxes on Florida families.

Share Your Story:

What other ways can we help lower the cost of living for Florida families? Share your story by contacting the Florida Chamber Foundation’s Chief Economist Jerry Parrish at jparrish@flfoundation.org.

About the Florida Scorecard:

The Florida Scorecard, located at www.TheFloridaScorecard.com, presents metrics across Florida’s economy. Each month, the Florida Chamber Foundation produces a Scorecard Stat that takes an in-depth look at one aspect of Florida’s economy. If you would like additional information on the Weekly Scorecard Stat or on the Florida Scorecard, please contact Dr. Jerry Parrish with the Florida Chamber Foundation at 850.521.1283.