Wireless Taxes and Fees in 2017


Get ready for a surprise: Wireless tax consumers will pay an estimated $17.1 billion in taxes, fees, and government surcharges to federal, state, and local governments in 2017, according to a new report released by the Tax Foundation. The annual report highlights year over year trends in taxes, fees and government surcharges imposed on wireless service by the federal, state, and local governments, dating back to 2003.

Wireless Competition Helps Reduce Wireless Bills

Let’s look at the good news first. Intense wireless industry price competition has reduced the average monthly wireless bill significantly since 2008, a trend that accelerated dramatically in 2017. The report notes that even “… Federal Reserve Chair Janet Yellen specifically identified wireless price reductions as a key factor in keeping U.S. inflation low,” according to a New York Times article.

The bad news: Unfortunately, we cannot fully enjoy this trend in price reduction because taxes, fees, and surcharges continue to remain stubbornly high.

The U.S. Depends on Wireless

Wireless is increasingly the only means of communication for many people in the United States. In fact, as of 2017 nearly 51 percent of all U.S. households are wireless only. Further, according to the report, about 66 percent of all low-income adults are wireless only. Excessive taxes and fees—especially those that impose high per-line taxes and fees—are a burden to us all. They also impose a disproportionate tax burden on those least able to afford them.

Excessive Taxes & Fees Have Significant Ramifications

Nationwide, taxes make up 18.5 percent of the average U.S. customer’s wireless bill. Do you know what you’re paying in taxes and fees on your wireless service? The top five “winners” this year with the highest state taxes, fees and surcharges are: Washington, Nebraska, New York, Illinois, and Pennsylvania. But, you’re not out of the woods if your state is not in the top five—overall, wireless taxes and fees remain high in 2017.

It’s time we tell local, state, and federal governments to take a step in the right direction and freeze any new discriminatory wireless taxes and fees. Many local and state governments face ongoing revenue challenges and wireless consumers continue to be an attractive “solution” to these woes. However, such taxes and fees impact us all, in addition to having disproportionate impacts on low-income families. Excessive taxes and fees may also have ramifications for long-term state economic development and growth.

This is our time to join together and tell Congress: Stop increasing wireless taxes!