How to Calculate Phone Taxes

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Calculating your telephone tax bill is not complicated. Telephone taxes are a form of excise tax charged to users, based on their local and long distance telephone service usage. This consists of a nationwide federal tax plus any state and local taxes. In general, taxes are charged to users directly on their telephone bills, so there is no need to file a separate tax return with the government. Anyone can figure out what their telephone tax bill is provided they know the appropriate tax rates to apply and the amount of their phone bill.

  • Multiply the total amount of your telephone bill for local and long distance service by the federal government's telephone tax rate. For instance, if your telephone bill for the prior month was $100, you would multiply $100 by the current federal telephone tax rate of 3 percent to arrive at your federal telephone tax of three dollars ($100 X 3% = $3.00).

  • Multiply the total amount of your telephone bill for local and long distance service by your state government's telephone tax rate. Verify the actual tax rate by contacting your state's treasury department.

  • Multiply the total amount of your telephone bill for local and long distance service by your city government's telephone tax rate. Not all cities charge a tax. Verify with the city where your telephone number was issued by contacting the city's treasury department.

  • Add your federal telephone tax, your state telephone tax and your city telephone tax together to arrive at your total telephone taxes. For instance, if your federal telephone tax is three dollars, your state telephone tax is one dollar, and your city tax is 75 cents, then your total telephone tax bill is four dollars and 75 cents ($3.00 + $1.00 + $0.75 = $4.75).

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