Minimizing Cell Phone Providers Tax Rates

If you check out the various cell phone taxes in different states it ranges from about 6% in Nevada to 22% in New York. I have heard conflicting statements by several people over the years so lets compile a list from trusted FWF sources.

Specifically, how did you get your phone provider to charge you less tax?

Sample WHAT IFS:

Can someone who has a NY drivers license, get a cell phone with a Nevada area code, and pay Nevada phone tax?
What if someone from Nevada wanted to get a NY area code... would they pay NY phone tax?
What if someone in NY moves to Nevada and becomes a Nevada resident... do they keep the NY tax?

There are a few factors here:

1) The area code of the number
2) The billing address you select (which may be a relatives house in another state which you receive email billing statements only)
3) The address on your credit report when you initially sign up for phone service.

I have a feeling that different phone companies are affected by different factors and I have heard conflicting reports. Going to various local TMobile and ATT stores is no help because the commision-paid sales people will tell you anything to make the sale, and most of the time they dont even know themselves. Since long distance is essentially the same as local calling now, with respect to cost, it may make sense for all FWFers to switch to Nevada cell phones.

Ethically speaking I am torn. Should one pay cell phone taxes to the state they are a resident of? To the state they spend the most time in? Or to the state they are using the virtual area code for? Why is NY charging me 22% for the 718 area code when Nevada charges me 6% for the 702? Does the state itself even do anything for that money? Is there a specific upkeep of "718" that costs more and makes it more valuable than "702"? If its just general revenue coming in, then I ethically dont see it a stealing from your home state.

I imagine for businesses, it may be important to have a local number, however it may be cheaper to get a Nevada number and a 1800 number forwarded to your cheaper cell.

This varies from company to company.

I believe sprint will tax you based on your billing address, whereas AT&T (and, I believe, verizon) will tax you based on your area code.

wasn't there an old thread on this?

Found it Here

treasurebeacon said: wasn't there an old thread on this?

Found it Here

Yep! A thread last year that no one knew who charged what or why

I think we should get this information based on the big players like TMobile, Verizon, ATT, Sprint and then any additional smaller providers.

I was thinking of starting a thread on this topic myself. I have been an AT&T customer for a couple of years. I moved states but I'm still charged my previous states taxes. I researched and talked to someone at AT&T about changing my number. I told them i was going to be moving to Nevada soon and would like to go ahead and change my number before i move there. They said it would be fine. I haven't done it yet though. AT&T does it off of your Area Code btw.

i'll be moving states soon too (to Seattle). does at&t charge you for changing your phone number? I wonder if i'll be paying more with a Seattle number rather than a CT one.

Gman476 said: I was thinking of starting a thread on this topic myself. I have been an AT&T customer for a couple of years. I moved states but I'm still charged my previous states taxes. I researched and talked to someone at AT&T about changing my number. I told them i was going to be moving to Nevada soon and would like to go ahead and change my number before i move there. They said it would be fine. I haven't done it yet though. AT&T does it off of your Area Code btw.

I can confirm this as per a 'friend'.

SPRINT
Tax is charged based on your billing address. Switch to paperless billing and voila...

When people say that prepaid is high at 0.10 a minute, they often do not consider the taxes you list here.

Pageplus is 5.5 cents per min if $80 cards are purchased at callingmart or similar. They charge $0.50 per month regardless area code

With Verizon. Living, mailing, billing addresses all in California. Area code in Michigan. Get charged Michigan 911 fees and taxes.

xoneinax said: When people say that prepaid is high at 0.10 a minute, they often do not consider the taxes you list here.

ephonecard.com is $92 for $100 att phone card. Then att coughs up another $10 bonus. All of that without sales tax.

I've been prepaid data and text on my iphone for months now, Medianet and Text roll over.

Anyone worried about the state/city finding out, and retroactively billing for all the lost taxes? It adds up to few hundred over the years.

The barrier to entry to change a cell phone address is incredibly low, so there's a very low burden compared to the benefit of paying fewer taxes.

The barrier to entry to moving a corporation's principal place of business is much, much higher. (though it can become much attractive if you also avoid scrutiny of your extraterritorial business-- hello halliburton!)

Gman476 said: AT&T does it off of your Area Code btw.

Not true. I changed my address from NYC to suburbs and kept the area code + phone number and the tax changed.

It's based off of your billing address.

tripleB said: I just got a Metro PCS phone activated with a Nevada Las Vegas number for a huge reduction in cell tax. The Florida number I was using was charged 27% taxes/fees and the Nevada number is being charged 9%. Thats a savings of $120 per year. I was able to do this over the phone through activation of a new number by giving a Vegas "Address" and then paying via a credit card that used a Florida billing address.I thought you lived in Michigan?

mttatkns said: ]I thought you lived in Michigan?

I live in Nevada.

tripleB said: xoneinax said: When people say that prepaid is high at 0.10 a minute, they often do not consider the taxes you list here.

Exactly. 10 cents a minute at a 300 minute plan is $30 per month. Thats how much the Tmobile 300 minute plan is and add on extra taxes and fees and its a lot more. Also 10 cents a minute is really 8 to 9 cents a minute if you buy the minutes on sale from callingmart.

The big problem is if you text a lot then you will get killed on a prepaid plan.
Page Plus texting is $12/month for 2000 messages.

andrewli said: I just logged into my Verizon account and noticed they changed the wording of the paragraph for PPU to:

Your Service and roaming charges are taxed based on your place of primary use (PPU). Generally, we will use the residential or business address you provide when signing up for wireless service as your PPU.

I know it used to not say this, so maybe VZW has changed their methodology. I've changed one of my lines from New York Metro to Nevada and I'll report back when the bill comes out (and for the line I changed, the PPU for the month WAS Nevada).

This is consistent with my experience. When I lived in South Florida, I got a cell with a North Florida phone # in preparation for moving. This line has always paid South Florida taxes (I can tell by the city name in the taxes) and the address in "My Profile" says the South Florida address.

I got a second line with a South Florida area code when I lived in North Florida. It paid North Florida taxes (I can tell by the city name in the taxes) until Hurricane WIlma. When I called and got an exception to waive any and all overage charges for the next 30 days (no home phone, no power, no water, etc for 17 days, then water on and no home phone, no power for 33 days), the lady said she changed some addresses to South Florida, but left the billing address in North Florida. Since then, this line has paid South Florida taxes.

When I got back to North Florida after Hurricane Wilma, a got a third line with a South Florida area code (different city than line 2) and this line pays North Florida taxes.

Why would you want your taxes paying for someone else's city/infrastructure?

On my bill I am paying 4 different taxes: 1) 911 service fee (0.75), 2) 911 state fee (0.25), 3) State Sales tax (3.16) and 4) County Utility Tax (4.22) - if I switch my billing somehow to a "cheaper" state my 911 service suffers and my utility infrastructure suffers.

If your city (or state - CA that's you) is too expensive for you to live in step up to the plate and do something about it - there are many things you can do - anything from moving (rhetorical option) to getting involved with local politics (even if just to vote in elections or better yet learn more about what is going on in your community and get involved with the local political scene by attending a council meeting and question the high utility tax or start small by going to a homeowners meeting - I bet 50+% of us are members of some sort of homeowners association, but I bet no more than 5% ever go to a regular board meeting).