Tax should reflect full cost

Consumers aren’t the only ones complaining; retailers are asking the Legislature to eliminate the rule, which they say puts stores at a competitive disadvantage. In truth, it’s hard to imagine a flood of people crossing state lines to buy iPhones, especially since Rhode Island is the other state that taxes phones this way.

And consumers should be aware, when they sign these cellphone deals, that the tax isn’t the only extra cost. The price of the phone isn’t lowered so much as spread out across the life of the contract. And that sleight-of-hand comes with a price of its own: Those long-term deals wind up restricting consumers’ ability to shop for less-costly options as competition increases and technology improves.

There is a case to be made that cellphones are overtaxed in general - that governments have used the huge rise in cellphone use as a revenue bonanza. According to data compiled last winter by the Tax Foundation, a Washington-based think tank, the average wireless consumer pays combined state, local, and federal taxes and fees of 16.26 percent on phone service contracts. (In Massachusetts, it’s worth noting, residents pay taxes of 12.9 percent; by this measure, the state ranks 36th out of 50.)

On the other hand, these smartphones are hardly bare necessities. And given their increasing cost - and a state budget gap that has forced painful cuts in basic services - the tax proceeds aren’t insignificant. Disclosure is important; a tax bill shouldn’t take anyone by surprise, and retailers shouldn’t face customers’ wrath for simply following state law. A full-retail tax policy, posted clearly in stores and on contracts, is reasonable. It could even be a useful tool, making consumers more aware of what they’re paying for a deal that seems too good to be true.