Wednesday, July 18, 2012

Avoiding Cellphone Taxes

Like anyone who reads their cellphone bill I have notice a number of taxes. As page 2 of this cellphone shopping guide demonstrates the average cell phone bill includes a Federal Service Charge (to provide phones in rural and low income users), a 911 tax, a regulatory charge (whatever that is) and that taxes can approach over 20% of the total bill, mine looks to be over 10% for my wife and me.

So I have been looking for a new phone. Not because like the kids these days I'm getting a second phone for when I hit the clubs (Huffington Post).

With a prepaid phone I can get around a lot of these taxes. At least for now as I found a couple of local areas in Oregon and South Carolina that are trying to add 911 taxes to prepaid phones 

So my prediction as people realize they can save money with prepaid cellphone they switch, until enough people switch that taxes are increased on prepaid users.  We see (saw?) the same thing in airline industry where airlines avoided taxes by moving charges to bag fees and seat upgrades that don't pay taxes.

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