Cellphone taxes can cause your monthly bill to soar, and the burden is growing heavier across the U.S., according to a recent Tax Foundation study.
Overall, cellphone taxes across the country continue to jump, up to a record 24.96%. State and local taxes average 13.16%, while the federal Universal Service Fund (FUSF) rate is 11.8%.
According to the Tax Foundation:
“As has been the case in the last three years, the FUSF increase, from 9.8 percent in 2020 to 11.8 percent in 2021, drove most of the overall growth in wireless tax rates.”
In five states, surcharges have jumped to 30% or more.
These are the states where costs are soaring, including each state’s combined federal, state and local tax rate:
- Illinois: 34.56%
- Arkansas: 32.04%
- Washington: 31.81%
- Nebraska: 31.36%
- New York: 30.73%
The good news for cellphone owners is that the per-line price for wireless service is falling. Average monthly revenue per wireless line has fallen from $41.50 per month in 2017 to $35.31 in 2021.
However, the Tax Foundation notes that some of the savings tied to these falling prices have been lost thanks to climbing tax rates.
Overall, those who subscribe to a wireless service are expected to pay about $11.3 billion in taxes, fees and government surcharges to state and local governments in 2021 this year, the foundation says.
If your cellphone bill has gotten out of hand, it might be time to look for another option. Stop by our Solutions Center and search for a more affordable cellphone plan that better meets your needs.