BUSINESS

Cell phone taxes rack up in certain parts of America

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(WJLA) - Every month, like clockwork, cell phone bills come, and without much thought, they get paid.

However, a closer look at those charges will likely reveal some charges that are confusing, and what's more, they differ greatly between Maryland, Virginia and the District of Columbia. In fact, the amount of money you pay in cell phone taxes depends, in part, on where you live.

The disparity between them is notable. A study by the D.C.-based Tax Foundation finds that Maryland checks in with the 12th highest cell phone taxes in the nation.

In contrast, Virginia has the 44th highest. The District, in the meantime, places at #17.

One of the main reasons that the taxes differ so greatly, experts say, is the different amounts local areas are allowed to charge.

"One of the problems across the country is that there are some localities that are allowed to levy taxes on cell phone service," Tax Foundation economist Scott Drenkard said.

A cursory look at bills from all three of the local jurisdictions reveals the difference - in the same month, taxes on a Maryland bill were $14.73, while taxes in the District and Virginia were $11.86 and $6.48 respectively.

Along with those, a bill in Montgomery Council had a specific county charge of $3.50. That's in addition to other fees, such as administrative fees, the federal universal service charge and regulatory charges.

All of these fees and charges go to the cell phone companies, which are designed to cut down on certain costs. For instance, the FCC says that the universal service charge helps pay for telecommunication access to low-income areas.

"It's easier for (the) government to squeeze in the taxes because we don't notice as much," Drenkard said.

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