How to Reduce your Cell Phone Bill & Cell Phone Taxes

The average amount paid by Americans as part of their cell phone bill taxes is around 16.8% of their cell phone bill and this includes Federal, State and Local taxes. At the same time, the average tax paid on products and services is around 6.9% in America. So why do we have to pay such high cell phone bill taxes? Congress has tried to pass laws trying to reduce the tax we pay on our cell phone bills but it never happened… yet. Instead, some states such as Baltimore are charging its 250,000 something cell phone subscribers an additional $3.50 tax. So, what do the rest of us do to reduce your cell phone bill taxes?

Well, we got a tip for one of you loyal readers of AskStudent. One of our readers who went to College in Oregon at Oregon State University transferred to University of Florida(UF). He changed his billing address and everything to reflect his new Florida address. So imagine his surprise when he received his cell phone bills. He had a T-Mobile 600 minute Nation wide long distance plan for $39/month. And after Oregon Cell phone tax of 7.75%, he paid a grand total of $42 for his cell phone bill while his roommate with a Florida Cell phone number, for the exact same plan paid $47.42 after Florida taxes of 21.60%, the second highest in the country.  Which means our tipster, if he and his roomie kept the exact same plans would be saving around $260 by the time he is done with college.  Now mind you, the $39 plan is the cheapest cell phone plan provided by T-Mobile. So the higher your cell phone bill, the more you will be saving.

So how to reduce your cell phone bill taxes?

Well, from the above example, most cell phone carries such as TMobile, At&T , Verizon and Sprint do not seem to base their taxes on the billing address of their customers but instead base it on the area code of their customers cell phone. So, if you want to lower your cell phone taxes, look up our cell phone taxes by state article and find a state with the lowest cell phone bill tax and call up your cell phone provider and do the needful.

Is this legal? Well, I am no lawyer and it might be illegal after all but some research later, the relevant Federal law is the Mobile Telecommunications Sourcing Act, which went into effect in 2002. According to this act, cell phone users are supposed to pay taxes in their “area of primary usage”. For our tipster, the area of his primary usage is presently Florida and not Oregon. However, it might not be illegal in his case because he wanted to keep his old cell phone number and did not want a new number in Florida. So, I think the ball is in cell phone providers hands who should be charging according to billing address and not the area code of their customers cell phone number.

As stated earlier, this might be illegal but I would suggest that you look up our Cell phone Taxes by State article and call up your carriers customer service and see if they go through with your plan of shifting to a state which charges lower cell phone bill taxes.

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