Wireless Taxes Hit Record High as Service Prices Decline

WASHINGTON, Oct. 2, 2025 – Wireless taxes now account for 27.6 percent of the average monthly bill. That means a $100 family plan carries more than $330 a year in taxes and fees, according to the Free State Foundation.

The Tax Foundation’s 2025 Wireless Tax Report cited by Free State showed that while base service charges have dropped nearly 30 percent since 2012, households have not seen the full benefit. Average prices fell from $47 per line per month to $33.36, but surcharges and fees climbed in the same period, countering much of the savings.

“All this matters greatly to consumers, and especially to low-income families,” said Randolph May, president of the Free State Foundation, in a blog post Monday. “Approximately 83 percent of low-income adults live in wireless-only households.”

The report found significant differences across states. Illinois, Arkansas and Washington imposed some of the highest wireless tax burdens, while Idaho, Delaware and Nevada were among the lowest.

It also highlighted the growing gap between falling service costs and rising surcharges. Consumer benefits from lower prices, it concluded,  were being offset by higher taxes and fees, leaving households paying nearly the same overall despite market-driven declines.

The Tax Foundation described the system as regressive. Low-income households, which depend more heavily on wireless connections, devote a larger share of income to paying these taxes.

Citing that impact, May called for action at all levels of government.. “That should be reason enough for state and local taxing authorities ... to substantially reduce the current tax burden on wireless consumers,” he wrote.