Wireless Taxes

The average wireless consumer now pays nearly 18% in combined state, local and federal wireless taxes and fees. That’s more than double the average sales tax rate of about 7% paid on other goods or services. In fact, wireless consumers in 46 states and the District of Columbia pay more in wireless taxes and fees than they do in general sales tax. Do you know what you’re paying in taxes and fees on your wireless service?

If you live in the following states you pay on average the Top 10 highest state local and federal taxes and fees in the nation:

#1        Washington –  25.42%

#2        Nebraska – 25.32%

#3        New York – 24.68%

#4        Illinois – 24.48%

#5        Pennsylvania – 22.34%

#6        Rhode Island – 21.46%

#7        Missouri – 21.43%

#8        Florida – 21.34%

#9        Arkansas – 21.31%

#10      Kansas – 20.42%

If you are not on the list above, it is likely you still pay taxes, fees and surcharges on your monthly wireless bill well over the state and local sales tax rate. Look up your state’s rates here – you may be surprised!

Wireless taxes continue to rise. Over the past decade, wireless taxation increased at a rate four times faster than the rate on other taxable goods and services. And, because wireless taxes are often regressive, they hit seniors, minority communities, working families and small businesses especially hard. For instance, at the end of 2015 approximately 64% of all poor adults had only wireless service.

Help from Congress: The ‘Wireless Tax Fairness Act’

In December of 2015, U.S. Representatives Zoe Lofgren (D-CA) and Trent Franks (R-AZ) introduced the ‘Wireless Tax Fairness Act’ which would put a five-year freeze on any new discriminatory state or local wireless taxes and fees for five years.

In the 113th Congress, a similar bipartisan bill gained 221 co-sponsors in the House of Representatives and 17 in the Senate, but Congress failed to vote on the legislation.

What the ‘Wireless Tax Fairness Act’ Does

The ‘Wireless Tax Fairness Act’ would prohibit local and state governments from creating any new taxes and fees on a specific communications service, such as wireless, for five years.

State governments could still increase taxes and fees on all communications, but they would be barred from singling out any one set of consumers for discriminatory treatment, such as wireless users like you. The five year freeze would provide wireless consumers with a much-needed break from escalating taxes and fees, and would create a window to develop a tax and fee structure that is fair and sensible.

3 thoughts on “Wireless Taxes

  1. […] The average cost of a cell phone plan is dropping. Competition between carriers has resulted in lower charges, averaging from just under $50 per month in 2008 to $44.65 per month in 2016: a drop of about 11%. You might not have noticed the dip, however, because related taxes and fees have increased by 23% […]

  2. […] we don’t understand why government choses to tax wireless service in ways that are excessively high and remarkably unhelpful to the jurisdiction and its consumers. With wireless taxes now nearly two and a half times higher than state and local sales taxes, it’s time for a little wireless consumer tax relief. […]

  3. “With cost still a major concern for people when it comes to their use of wireless technologies, the increase in taxes on monthly bills is becoming a burdensome extra expense, especially for those who can least afford those extra costs. As state and local governments in particular look to ways to raise money for their annual budgets, wireless services and products should be viewed as an outlet of last resort for additional taxation, especially since the consequences of increased wireless bills could result in real consumer harm.”

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