Our state has a little streak going, and it’s not a good one. For the third year in a row, Washington has the highest mobile phone taxes in the country.
In addition to the 6.64% in federal charges (the Universal Service Fund fee and other minor charges) paid by consumers around the country, Washington cell phone users pay state and local sales taxes, a 7.5% utility franchise tax, and state and local 911 taxes.
Add it all up and a typical Washington customer is paying 25% in cell phone taxes, between the federal and state fees. By the Tax Foundation’s figuring based on what Seattle and Olympia customers pay, that’s good enough to put us in first place for the highest taxes in the nation.
Fits right in with state tax policy
Our high cell phone taxes fit in well with the state’s penchant for other high specialty taxes.
In addition to high mobile taxes, home phone service is also highly taxed. Likewise our cigarette tax rate is 6th-highest in the country. It’s supposed to discourage smoking, but it’s state government that’s addicted – to the tax revenue.
You can add liquor to the list of Washington’s “highest in the nation” taxes. Some like to blame that on the initiative that ended the state’s liquor monopoly. Keep in mind, prior to the initiative our liquor taxes were already the highest of any state. The initiative simply maintained that status quo.
Those high specialty taxes are related to another symptom of Washington’s not-always-rational tax system: Funding basic government through levies. In too many localities, the popular things government does – 911 service, criminal justice, parks – are put before voters. Somehow the less popular parts of government are never put on the ballot – I guess they know a Dept. of Ecology tax wouldn’t pass.
But back to those cell phone taxes – the more opaque a tax is, the higher government will try to push it. Few read their cell phone bills closely, just like few people back in the liquor store days read those tiny little labels on the shelves very closely. For public officials on the hunt for higher tax revenue, it’s the perfect place to go for the big score, and they have.