Apple’s new iPhone launch on Sept. 9 may be a celebration for tech consumers, but it also makes the Illinois taxman smile. Illinois already had the nation’s highest tax rate on cell phone plans before it bumped up even more July 1.
With the new iPhone launch Sept. 9, Illinoisans’ excitement may quickly fade as they realize they are charged the highest state and local taxes on cell phone bills in the nation.
Illinoisans already paid the nation’s highest wireless taxes, but then the taxes were pushed even higher July 1 by state leaders. Illinois increased its share of wireless taxes from 7% to 8.65% to support a 9-8-8 suicide and crisis hotline.
Families in Illinois pay an effective 37.7% tax rate on their cell phone bills. No other state is even above 35%. That includes 24.9% in state and local taxes and 12.8% in federal taxes. For a family of four sharing a $100 plan, taxes add nearly $38 a month. That’s $456 a year, compared to the U.S. average of $320.
Chicagoans pay even more. Illinois allows local per-line taxes of $5 per phone in the city, meaning a family with four lines pays an additional $20 each month.
According to the Tax Foundation, 80% of low-income adults rely solely on wireless service. High taxes on cell phones not only make daily communication more expensive for those families, but place a disproportionate burden on them to support government functions.
High taxes also slow investment in wireless infrastructure. A report by the International Chamber of Commerce found wireless infrastructure investment supports innovation, helping businesses work better and making life easier for consumers.
Lawmakers should reconsider wireless taxes that generate short-term revenue but deter long-term growth. With a new iPhone on the way, Illinoisans will again be reminded they pay the nation’s highest price but receive nothing extra in return.
