Taxes and Fees .
Wireless consumers pay a disproportionate amount of taxes and fees for wireless products and services. CTIA supports fair, equitable, and transparent tax policies for wireless goods and services.
Wireless service is increasingly the sole means of communication and connectivity for many Americans, particularly young people and those with lower incomes.
Wireless consumers pay a disproportionate amount of taxes and fees for wireless products and services. High wireless taxes and fees contribute to the digital divide and undercut efforts to bring affordable broadband to all Americans. CTIA supports fair, equitable, and transparent tax policies for wireless goods and services.
High and Unfair Wireless Taxes and Fees
Wireless consumers pay 21% on average in combined taxes and fees from federal, state, and local governments on their monthly calling plans. That’s more than double the average sales tax rate for other goods or services.
Wireless taxes continue to rise. Over the past decade, wireless taxation rates increased 14%. Meanwhile, the increase in sales and use taxes for other goods and services grew only 1.2%.
These disproportionately high taxes and fees unfairly penalize wireless consumers. This often regressive tax structure hinders efforts to bridge the digital divide and discourages mobile broadband adoption.
Many states also charge wireless subscribers a 9-1-1 fee to fund emergency communications systems. Funding these systems is important, but some states have raided these funds to pay for other projects. This isn’t fair to consumers, and it’s a threat to public safety. Additionally, since emergency communications systems are an essential government service and provide a common benefit for all citizens, these services should be funded through the broad-based taxes that finance general fund expenditures.
Policymakers should set tax structures that treat wireless subscribers fairly, encourage wireless investment, and help bring broadband to more Americans across the country.
Specifically, policymakers should:
- Freeze new—and reduce existing—discriminatory taxes and fees that disproportionally impact mobile users.
- Create a fair system for state and local taxes imposed on digital goods and services.
- Ensure that wireless 9-1-1 fees are used for maintaining and improving emergency services, or fund them through general revenue.