Taxes on Wireless Bills Harm Consumers

Consumers are concerned with inflation and high prices but there is at least one industry that has consistently provided improved services at lower costs.  US Telecom’s 2026 Broadband Pricing Index (BPI) revealed that prices for the services at speeds most often used by consumers dropped by 6 percent between 2024-2025 and by 43.6 percent since 2014.  At the same time, download speeds have increased by 145 percent and upload speeds rose by about 95 percent.   And consumers are aware that they are getting a good deal.  A national poll that was done in March 2026 found that only 2 percent of likely voters believed that they are concerned about the cost of internet access as a household expense.

But the cost could be even lower if government taxes and fees were not so high.

A September 28, 2026, Tax Foundation report found that, “in 2026, a typical American household with four phones on a shared plan, paying $100 per month for taxable wireless service, will pay about $345 per year in taxes, fees, and government surcharges in 2026 – up from $330 in 2025.”

Illinois has the highest tax of 25.02 percent tax rate on wireless services, followed by Arkansas at 22.04 percent, Washington at 21.85 percent, New York at 20.64 percent, and Kansas at 19.11 percent.  The five lowest taxing states are Idaho at 3.39 percent, Nevada at 6.07 percent, Montana at 7.07 percent, Virginia at 7.84 percent, and Wyoming at 8.45 percent.

The fees and taxes on wireless bills include federal and state Universal Service Fund charges; 911 fees; a 988-crisis hotline tax in 11 states, and a wireless tax either in addition to the sales tax or in lieu of sales taxes, but at a higher rate, in 13 states.

The economy and affordability were among the top concerns raised by voters in exit polls.  While wireless taxes are not currently a concern for consumers, that could change if state legislatures continue to raise them.  Instead, those taxes should be lowered and combined with permitting reforms, which will both speed up broadband connections in unserved and underserved communities and help make wireless services even less expensive.