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Wash. State Has Highest Cellphone Tax Rates In U.S., Says Report

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Washingtonians pay the highest cellphone bill tax rates in the country while Oregonians enjoy the lowest tax burden, according to a new report.

The Tax Foundation, a nonprofit research group, has been tracking cell phone taxes and fees for the past few years. Nebraska used to rank first, but Washington now claims the top spot.

State and local taxes and fees add up to 18.6 percent here. Then you throw in another federal charge, and it winds up tacking on an extra 25 percent.

Scott Drenkard, an economist with the Tax Foundation, says it’s a regressive system.

"As a percentage of your income, 25 percent on your cell phone bill might not hurt high-income individuals as much, but it’s a pretty sizeable chunk for lower-income individuals," Drenkard said.

In Oregon, state and local taxes and fees on cell phone service add up to 1.76 percent.

Why So Much In Washington?

Why do we pay so much more here? We pay state and local sales tax as well as s local utility tax.

In Oregon, there’s no sales tax. And there’s no utility tax in Portland or Salem — the cities the Tax Foundation studied. All in all, our taxation rate for wireless service is about 10 times what it is in Oregon. 

Other states that set high cell phone tax rates include New York, Florida and Illinois. 

In July 2017, Ashley Gross became KNKX's youth and education reporter after years of covering the business and labor beat. She joined the station in May 2012 and previously worked five years at WBEZ in Chicago, where she reported on business and the economy. Her work telling the human side of the mortgage crisis garnered awards from the Illinois Associated Press and the Chicago Headline Club. She's also reported for the Alaska Public Radio Network in Anchorage and for Bloomberg News in San Francisco.