Taxes and Fees

Today, America’s wireless consumers pay a disproportionate amount of taxes and fees. Wireless products and services should be taxed fairly, equitably and transparently to promote broadband access for all Americans.

Policy Topics

The typical wireless user now pays, on average, almost double (18.5%) the taxes for their wireless service compared to other goods and services (7.61%)

Taxing wireless products and services by nearly twice as much as other goods harms those who can least afford, but most depend on, mobile service. This burdensome tax structure frustrates efforts to offer affordable broadband access to all Americans.

Instead of a patchwork of cities and states imposing numerous taxes on wireless products and services, policymakers should 1) freeze any new discriminatory wireless taxes and fees for five years and 2) adopt a clear, national approach on the taxation of the digital marketplace, such as apps, movies and music.  
Americans increasingly rely on their mobile devices, and many state and local governments are imposing significant taxes and fees on the wireless services to raise revenue. According to a recent report, "since 2008, average monthly bills have dropped from just under $50 per month to $44.65 per month – an 11% reduction – while taxes and fees have increased from 15.1% to 18.6% – a 23% increase." 

This regressive tax structure unfairly penalizes mobile consumers and discourages the adoption of mobile broadband, especially among low-income populations and communities of color. That’s why CTIA and its members support the Wireless Tax Fairness Act, which would put a five year freeze on any new taxes and fees on wireless services. 

In addition, the purchase of digital goods, such as music, movies and apps, are currently subject to an array of duplicative local and/or state taxes, which can confuse consumers and make wireless service more expensive. CTIA and its members support a national framework, as the Digital Goods and Services Tax Fairness Act, which would create a fair system for imposing state and local taxes on digital goods and services. This bill would provide the necessary clarity that wireless consumers deserve and lower their monthly wireless bills.
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