In 2019 and 2020, several states including Arkansas and Oregon considered legislation to increase taxes on wireless services.  These taxes are not only burdensome, but they are also often used to pay for projects and programs unrelated to telecommunications, including budget shortfalls. 

A November 2020 Tax Foundation study conducted by Scott Mackey of Leonine Public Affairs and Ulrik Boesen of the Tax Foundation found that on average, a family of four in the United States with a $100 wireless monthly bill could pay as much as $270 annually in taxes, fees, and surcharges.  Each state imposes wireless taxes differently.  The Tax Foundation study noted that Illinois currently imposes the highest state wireless service taxes in the nation, accounting for 22.37 percent of a consumer’s bill.  Idaho has the lowest state wireless service taxes at 2.71 percent.

In 2019, the National Center for Health Statistics (NCHS) reported that 67.1 percent of low-income households only use wireless telephone services and often these households are using their wireless service as their only connection to the internet as well.  NCHS found that 44.7 percent of people living in the Northeast rely only on wireless services; 61.6 percent of those living in the Midwest; 61.1 percent of those residing in the South; and 61.8 percent of those in the West are wireless only. Taxes on these wireless services are regressive particularly for low-income families and households. Rather than increase taxes to pay for budget shortfalls, state and local governments should look for ways to cut the cost of government services.

Americans must have the ability to communicate and stay connected using innovative technology, including wireless broadband and cell phones.  Increases in burdensome and excessive state and local wireless taxes can lead to limitations on the ability of many families to access the internet and other telecommunications services, and they should be rejected in states where they are being proposed.