Did You See How Much You’re Paying in Taxes on Your Phone Bill?


While families are paying less on cellphone plans and wireless services across the country, Americans are still paying more in wireless taxes and fees. This regressive tax can hurt families who rely on wireless service the most. The Tax Foundation released its annual report, which examines trends in wireless taxes and fees state-by-state. Here are four things you should know:

  1. Your phone bill is lower than ever, but you’re paying more in taxes.
    Over the past 13 years, the average cost of cellphone plans have significantly dropped—in fact, it’s decreased by 30% since 2008. This is due to steady competition between wireless providers and options for individuals seeking wireless services. However, Americans still are unable to benefit from affordable wireless service prices—this is due to wireless taxes, fees, and surcharges surging from 15.10% to 24.96%.
  2. Where you live can impact taxes on your phone bill.
    You could pay higher taxes and fees on wireless service based on where you live. If you live in Illinois, Arkansas, Washington, Nebraska, or New York, you are paying the highest wireless taxes, fees, and surcharges in the country. Whereas residents of Idaho, Nevada, Delaware, Montana, and Virginia are paying the lowest percentage. In 15 states, wireless taxes are twice as high as the sales tax! See how your state compares in the map below:
  3. The average American is paying $300 in wireless taxes and fees—up from $270 in 2020.
    In 2021, Americans who subscribe to wireless services will pay about $11.3 billion in taxes, fees, and surcharges. About half of that amount is used exclusively on telecommunications services! Americans pay about $3.7 billion in state and local 911 fees, but millions of that money is not actually spent on 911 services in certain states.
  4. Regressive wireless taxes and fees are impacting low-income households and Americans who rely on wireless the most.
    According to the CDC, 74% of low-income adults lived in wireless-only households and 65% of adults lived in wireless-only households. As more states impose flat per-line taxes and fees that create a higher burden on Americans who use family share plans, it disproportionately impacts low-income families. In the wake of the COVID-19 pandemic, Americans are relying on wireless more than ever before. That means these excessive taxes and fees are hurting Americans at a time when we need wireless service the most.Your phone bill taxes and fees are affected by wireless policies in your state. And new legislation can emerge at any time. Stay tuned to ACTwireless for the latest so that you can take action when there is a new wireless tax measure in your state. Click here to learn more about wireless service taxes. You can also read the Tax Foundation’s full report on this year’s wireless taxes and fee trends by clicking here.