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Inequities in Florida’s Taxes on Mobile Communications May Prompt Legislative Review

Posted Friday, January 3rd, 2014

Florida’s Communications Services Tax “Simplification” Law is anything but simple.  Many Floridians have never studied the numerous taxes and fees at the end of a traditional mobile phone bill.  These include state taxes, user fees, E-911 fees, and local taxes for which Florida has over 400 different taxing jurisdictions.  The state and local taxes alone average nearly 14.25% on Floridians’ bills statewide.

However, a 1995 law enacted before Motorola even released the first StarTAC flip phone taxes similar mobile services for prepaid calling arrangements at the lower 6% state sales tax rate, imposing a fraction of the tax burden.  Prepaid calling arrangements, initially recognized as the plastic calling cards covering the back counters of most convenience stores, have evolved.   In the early- to mid-2000s, prepaid phones were a compliment to, and may have served a different audience than, traditional post-paid mobile phone services.  Such prepaid phones allowed you to talk as long as you purchased minutes to feed the need in advance.  Today prepaid phones have taken another evolutionary step, many providing unlimited talk, text, and even web browsing for a given period, such as a month, after the customer has paid for such service plan. Further, many providers will serve up these communications on the same phones available to those customers with traditional post-paid plans, such as the latest iPhone.

Opponents of this tax system claim it creates an unlevel playing field whereby two Floridians could purchase the same level of service, for the same amount, on the same iPhone, yet one consumer pays almost 2.5 times more in taxes.  This inequity prompted legislative review during the 2013 session and may again be under discussion in the 2014 session.

For more information, please contact French Brown.

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