Taxes, Fees & Surcharges  RSS Feed

CTIA Position:
CTIA-The Wireless Association® believes excessive and discriminatory taxes on a service discourage its use, and it makes no sense to place such arbitrary burdens on wireless consumers and Internet access. CTIA supports a fair and equitable tax structure for wireless consumers, and also believes access to the Internet should not be taxed.

In general, a wireless tax imposition no higher than the rate placed on general business is fair, and would encourage the use of such a valuable service. Today’s excessive wireless consumer taxes do just the opposite. CTIA also believes the wireless industry should not be subjected to similar treatment by taxing entities and agencies.



Key Points:

  • Excessive, Discriminatory Taxation on Wireless Services is Unfair and Costly to Consumers. The average effective rate of taxes and fees on wireless consumers is more than 14%, compared to an average general business tax of less than half of that. The average taxes on wireless service increased nine times faster than the rate on other taxable goods and services between January 2003 and April 2004, and between 2004 and 2005 the disparity grew at an even faster rate. Clearly wireless is a target for discriminatory taxes. Why should consumers pay more for their wireless service than for other goods and services they purchase?
  • Sensible Tax Policies Will Help Bridge the Digital Divide. Wireless broadband services are expanding at an accelerating rate across the United States to rural and urban areas alike. The deployment of mobile broadband services needs to be encouraged by keeping costs affordable for consumers (individuals and businesses). This includes a fair and reasonable tax regime.
  • 27 States, Including Washington, DC Have Double Digit Taxes, Fees, and Surcharges on Wireless Service. Nearly seven years after the National Governors Association (NGA) and the National Conference of State Legislatures (NCSL) urged states to reform and modernize their telecommunications taxes, most states have failed to enact meaningful reforms that benefit consumers. In fact, in most states the situation has worsened. Twelve states (Nebraska, Washington, Florida, New York, Texas, Rhode Island, Missouri, Pennsylvania, California, Utah, Illinois and Kansas) are each above 15% in wireless taxes, fees, and surcharges.
  • Heavy Taxation on Wireless Discourages Use and Adversely Affects the Economy. If you think heavy taxes weigh you down, think about how they dampen the U.S. economy. Economists estimate that a 3.3% decrease in wireless prices would increase U.S. Gross Domestic Product by between $6.8 billion and $7.8 billion within two years. That’s a multi-billion dollar shot in the arm for the U.S. economy. Some state and local governments tax wireless at such exorbitant rates that approach those levied by “sin taxes” designed to discourage use. This is an odd approach, given that wireless is the fastest growing and most competitive segment of the communications industry providing enormous benefits to consumers, businesses, and our nation’s economy.
  • Consumers are Taking Action and Congress is Taking Note. CTIA and the wireless industry have established a non-profit consumer advocacy group, MyWireless.org®, giving consumers the tools to take action in protecting their rights, staying informed, and ensuring their voices are heard. As consumers take a stand, Congress is paying attention. In 2006, the House Judiciary Committee held hearings where state officials acknowledged the serious problem at the state and local level. Additionally, Congress is now considering legislation that would place a 3-year moratorium on new discriminatory wireless taxes, and a permanent moratorium on internet taxes.