The Tax Bite
on Everyday Products….PHONE CALLS

The last thing you think about when you call Mom to say hello is paying your taxes. But what you probably don’t know is that about half of what you pay for the call, and all other calls, goes to the government in taxes rather than for the phone service.

On a typical phone bill, the consumer must pay a federal excise tax, state and local sales taxes, city excise taxes, a state gross receipts surcharge, a franchise charge, an FCC charge for Interstate Toll Access, a Telecommunications Access System Act Surcharge, Emergency 911 charges and a county manhole fee.

But that’s just for starters. Out of the remaining amount you pay for calls, the phone company must pay federal income taxes, state income taxes, federal payroll taxes, unemployment insurance taxes, workmen’s compensation taxes, state franchise taxes, local property taxes and any local income taxes. Altogether, these taxes account for about 20 percent of the total phone bill. Added to the taxes paid directly by the consumer, this means about 50 percent of what you pay for your phone goes to the government in taxes rather than for phone calls.

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