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The Tax Foundation is the nation’s
leading independent tax policy
research organization. Since 1937,
our research, analysis, and experts
have informed smarter tax policy
at the federal, state, and local
levels. We are a 501(c)(3) nonprofit
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Designer, Dan Carvajal
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Wireless Taxes and Fees
Jump Sharply In 2019
• A typical American household with four wireless phones paying $100 per
month for taxable wireless service can expect to pay about $260 per year in
taxes, fees, and surcharges–up from $229 in 2018.
• Nationally, these impositions make up about 21.7 percent of the average
customer’s bill–the highest rate ever. Illinois has the highest wireless taxes
in the country at 31.2 percent, followed by Washington at 28.8 percent,
Nebraska at 28.1 percent, New York at 27.7 percent, and Utah at 25.6
• Since 2008, average monthly wireless service bills per subscriber have
dropped from just under $50 per line per month to $37.85 per month–a 24
percent reduction. However, wireless taxes have increased from 15.1 percent
to 21.7 percent of the average bill–a 44 percent increase.
• Taxes, fees, and government surcharges on wireless consumers increased
from 19.1 percent to 21.7 percent between 2018 and 2019–a 14 percent
increase in the tax rate. The disparity between taxes on wireless voice
services and general sales and use taxes grew between 2018 and 2019 as the
increase in taxes on wireless voice services outpaced the increase in general
sales and use taxes, which only increased 1.2 percent.
• Most of the increase in the wireless tax burden is due to a very large (36
percent) increase in the Federal Universal Service Fund “contribution
rate.” Wireless carriers are required to pay this surcharge on all charges for
interstate telephone service.
• At the end of 2018, more tha