Wireless unlocks the innovative power of technology that advances connectivity in healthcare, remote work, business, and society as a whole. In fact, by the end of 2023, there were 558 million wireless connections in the United States. That’s nearly 2 connections per every American, highlighting the mass adoption of wireless and the seamless integration of mobile devices into our daily lives. However, our wireless usage is being taxed at higher rates than groceries, clothing, Uber rides, and more.
According to the latest Tax Foundation report, we are facing record high government-imposed taxes and fees on our cellphone bills. Without affordable wireless, daily regimens—from checking the weather app before leaving the house to streaming the next binge-worthy release on Netflix—would be impaired. We’re relying more than ever on wireless to access healthcare, enhance accessibility for individuals with disabilities, and participate in remote learning. These services not only add convenience but have become essential to our everyday lives.
Wireless Costs are Actually Decreasing
While the prices of essentials like gas, groceries, and electricity are skyrocketing, the cost of wireless has actually decreased. A more competitive wireless landscape, along with the technological advances of the last decade, have led to lower costs. What this means for us is more service options, allowing us to shop around and find what best fits our need and budget. In fact, the average charge from wireless providers has decreased 29% since 2012, from $47.00 per line per month to $33.56.
So why aren’t we seeing all of this decrease reflected in our monthly bill? This promising price reduction has been offset by higher taxes and fees.
Wireless Taxes & Fees Keep on Climbing
While the cost of wireless service has decreased, wireless taxes at the federal, state, and local level have risen to a rate of nearly 27%. That is two full percentage points up from 2023.
Essentially, taxes make up a larger portion of your monthly cellphone bill today than ever before.
Wireless taxes and fees differ across the country, but some states are hit harder than others. In places like Illinois, Washington, Arkansas, New York, and Nebraska wireless subscribers face the highest tax burden. Illinois tops the list with a staggering 36% federal, state, and local tax rate, which is more than double the state’s sales tax. The lowest wireless tax rate sits at 16% in Idaho.
Wireless taxes are also disproportionate to the rate Americans pay on sales tax. The report notes that across the country, “wireless consumers will pay about $12.4 billion in taxes, fees, and government surcharges to state and local governments in 2024.” While $5.3 billion of that is for sales taxes that generally apply to other taxable good and services, an astounding 57%—that’s $7.1 billion—are taxes that apply only to wireless and other telecommunications services. At the state level, wireless taxes in 17 states are even double the sales tax.
No matter where you live, wireless taxes are taking a bigger bite than most realize.
See how your state and local taxes measures up:
These overburdensome, unfair taxes are emptying the pockets of everyday Americans who rely on wireless communication to complete their daily tasks.
Wireless Taxes & Fees Hurt Low-Income Families the Most
Even more concerning than the taxes alone is that these taxes are regressive, hitting low-income families relying on their wireless service the hardest. Setting fixed per-line-item taxes and fees within each bill charges the least expensive and most expensive plans the same amount. Families with cheaper plans end up paying hefty taxes relative to their income.
According to the Centers for Disease Control and Prevention, 80% of all low-income adults live in wireless only households compared to 75% of the general adult population. It’s clear these wireless taxes and fees are disproportionately affecting the people who are least able to afford them yet rely on them the most.
Join ACTwireless today to combat bill shock and fight against excessive wireless taxes and fees that burden everyday Americans. Affordable wireless service is necessary to bridge the digital divide and ensure equitable access to wireless connections.