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Before the new state budget took effect, Illinois already had
the highest local wireless tax in the country at 7%. The tax
rate went up to 8.65% on July 1 with the start of the new fiscal
year.
Dylan Sharkey, assistant editor at the Illinois Policy
Institute, said the combined tax burden for cell phone users
rose to 37.7%.
“So you add in state and federal taxes, Illinoisans are paying
close to 38% on their phone bills. When you factor it all in,
that’s the highest in the country,” Sharkey told The Center
Square.
The tax rate of 37.7% includes 24.9% in state and local taxes
plus 12.8% in federal taxes for the Universal Service Fund.
Sharkey said Gov. J.B. Pritzker approved the tax increase in the
state’s record-high $55.2 billion budget despite his own
previous promise.
“When they were talking about ideas in the Statehouse of what to
pass, Governor Pritzker said he would not sign any broad-based
tax hikes on working families. Well, I’d be hard-pressed to find
a working family that doesn’t use a phone on a daily basis,”
Sharkey said.
For a family of four sharing a $100 plan, Illinoisans pay close
to $38 each month in taxes. Illinois families pay $456 a year in
cell taxes while the U.S. average is $320.
Wisconsin’s combined cell phone tax rate is nearly 17% lower
than Illinois at 21%. Iowa has a rate of 23%, Indiana and
Kentucky consumers pay 24%, and Missouri users pay 28%.
Sharkey said it’s a recurring theme for Illinois to be at the
top of the list for taxes.
“It would be one thing if we were number one just for cell phone
taxes, but we’re number one in property taxes, number two in gas
taxes, we’re the second-highest in corporate income taxes,”
Sharkey said.
Sharkey said the phone taxes are especially regressive in
Chicago, where the state allows the city to charge a tax of five
dollars per line.
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