TARGET 8: Residents raise questions over increased cell phone bills

1 year 4 months 3 weeks ago Tuesday, June 28 2016 Jun 28, 2016 Tuesday, June 28, 2016 1:51:00 PM CDT June 28, 2016 in Target 8
By: Megan Kelly, KOMU 8 Reporter

COLUMBIA – Some Columbia residents found peculiar charges on their cell phone bills in April and are warning others to take a closer look at their bills.

Resident Sara Whiting noticed a “Columbia city sales tax” and a “Columbia local business license surcharge” on her cell phone bill in April.

“We closely watch the bills in our house, and I noticed between March and April on our Verizon Wireless bill there was about a $4 increase in the cost of the bill.”

Whiting has lived in Columbia since May 2014 and said this is the first time she has noticed these charges. She said she was alarmed when her tax rate went from 9.0 percent in March to 14.3 percent in April.

“This is the first step in getting answers, and I know there are other people out there who are in a similar situation,” Whiting said.

Whiting said her coworkers also starting noticing these charges on their bills and were not sure where they came from. 

However according to Columbia’s Assistant Director of Finance Lynn Cannon, Columbia charges a seven percent tax on utility companies each month, according to city code. The local business surcharge on cell phone bills do not come directly from the city.

“That comes from the companies. We charge the company the seven percent gross receipt tax,” Cannon said.

In 2005, House Bill 209 authorized telecommunication companies to pass that 7 percent tax on to the consumer. How much the company pays to the city fluctuates each month based on how well the company is doing. 

“That’s going to depend on their consumer base, the number of customers they have at the time, the amount of receipts for the prior month. So that’s going to fluctuate. It’s not going to be the same dollar every month,” Cannon said.

The 7 percent tax on telecommunication companies then goes to the city’s general revenue fund, where the city council determines what this money is used for.

According to Whiting, she called the national Verizon Wireless customer service, and a representative said they didn’t know what the charges where, other than they were Verizon Wireless surcharges.

“I called the local office. And they also just said it was the government’s surcharges, and they were unsure of where they came from,” Whiting said. 

“Verizon is obligated to pay the Columbia local business license tax that is imposed by the locality on Verizon. This is passed through to Columbia customers, independent of any state or local sales taxes,” said Meagan Dorsch, Verizon Wireless External Communications.

Additionally, representatives from Sprint and AT&T said they also pass on this tax to their customers as well.

“There’s a lot of hidden charges. It’s just important to be vigilant and ask questions about it,” Whiting said.

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