(The Center Square) – With the latest tax increase imposed on July 1, Illinois cell phone users are paying a combined tax rate of nearly 38%.
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.
