Skip Navigation

Wireless Tax Burdens Rise for the Second Straight Year in 2016

October 11, 2016
By Scott Mackey and Joseph Henchman

This study, published by the Tax Foundation, a nonpartisan, nonprofit organization researching taxes and tax policy, examines how government taxes on wireless phone service have changed over the years.

tax documents

The authors, Tax Foundation vice president of legal and state projects Joseph Henchman and KSE Partners LLP managing partner Scott Mackey, write that governments are primarily responsible for increases in consumers’ phone bills.

“Wireless industry competition has led to significant reductions in average monthly bills from $46.44 per month in 2015 to $44.65 in 2016,” Henchman and Mackey wrote. “Since 2008, average monthly bills have dropped from just under $50 per month to $44.65 per month—an 11 percent reduction—while taxes and fees have increased from 15.1 percent to 18.6 percent—a 23% increase. Unfortunately, consumers are not enjoying the full benefit of these price reductions because of the growing tax burden on wireless service. Taxes are growing at a rate twice as fast as average wireless prices have been falling.”

Henchman and Mackey write that local and state governments are increasingly taxing wireless service, risking economic growth.

Henchman and Mackey write that local and state governments are increasingly taxing wireless service, risking economic growth.

“Wireless consumers continue to be burdened with excessive taxes, fees, and surcharges in many states and localities across the United States,” Henchman and Mackey wrote. “With state and local governments continuing to face revenue challenges, the wireless industry and its customers continue to be at risk as an attractive target for raising new revenues. Excessive taxes on wireless consumers disproportionately impact poorer families and may have ramifications for long-term state economic development and growth.”