Monday, November 8, 2010

Cell Phone Contracts and Taxes

A cell phone bill contains information that can cause confusion among consumers. The taxes included in your bill are a good example of this especially for consumers who have recently transferred to another state.

Taxes and governmental fees are included in your bill. That's why your residential or business street address is very important because it allows a carrier to determine which jurisdiction's taxes and assessments to collect for you cell phone bill. This information is emphasized in your mobile phone contract.

On average American cell phone consumers are taxed 15.75 percent on every month's cell phone bill. This average percentage includes state and local taxes as well as federal taxes.

Now, calculating the cell phone tax that goes into your bill may not be accurate. This means that a carrier may be overcharging you. Of course, it may also mean that you are being charged less than the amount that you should be charged.

So how do you know that a carrier isn't over charging you with taxes?

Well, you need to know that you are paying for several cell phone taxes. Your bill includes the federal tax, which is about 5.05 percent of your phone bill a and is used to fund the Universal Service Fund.

Then there are state taxes and local taxes and fee. Some states also include a sales tax ands add fees for e911 service. Refer to to get the average state and local tax rates for your residence.

You may contact your carrier if you feel that you are being overcharged with the taxes on your bill. It's the carrier's responsibility to charge you the correct tax based on your billing address. A refund is justified if a carrier is not applying the appropriate rates.

That's it for this pice of info on cell phone taxes. Tune in next week for more information on cell phone contracts and related topics.

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