(The Center Square) – Illinois residents are paying more for their smartphones than any other state in the nation.
The Tax Foundation looked at which states pay the most in taxes on their cellular service by reviewing combined federal, state, and local tax rates for cell phones.
“Illinois has the highest rate at just under 35% of your wireless bill that goes towards taxes and fees,” Justin Carlson of the Illinois Policy Institute told The Center Square.
The federal tax rate on wireless plans is 12.24%. Illinois’ state tax on wireless plans of 22.65% is the most expensive for cell phone users nationwide.
No other midwestern state finished in the top 10 of the list, as North Dakota finished at No. 11. Illinois is also the only state with a combined rate of over 33%, as Washington state finished second with a combined federal, state and local tax rate of 32.9%.
Carlson said that high amounts of state debt leads to increased taxes on things such as cell phone service.
“Unfortunately, this stems from Illinois’ long-standing financial issues,” Carlson said. “It’s got a long history of poor budgeting practices and overspending. Of course, we always talk about the state’s incredibly high pension debt.”
Illinois’ unfunded pension liabilities total $139 billion, according to state numbers.
Carlson also said the state has turned to taxing high rates on cell phone services based on their popularity and how they’ve become a necessity for everyday life.
“They pay for both the pension obligations and all of the other things the state government has to pay for,” Carlson said. “All the services that people expect costs a lot of money. I guess cell phones have become a common thing as many people have them, so they are easy to tax.”
According to IPI research, a family living in Chicago on a four-line plan that costs $100 a month gives up 34% of their bill to taxes, whereas the same family would pay 20% in New York City.
