A typical American family with four wireless phones on a shared $100 monthly plan will pay roughly $345 in taxes, fees, and government surcharges in 2026—up from $330 the previous year—according to a July 2026 report from the Tax Foundation. The analysis finds that wireless taxes have climbed to their highest level on record, driven primarily by a federal Universal Service Fund surcharge increase and modest growth in state and local levies. The trend continues a two-decade pattern in which rising government-imposed costs have eaten into the savings consumers would otherwise enjoy from falling service prices.
The data reveal sharp contrasts across states and a striking long-term shift in the composition of wireless bills. Illinois levies the nation's steepest combined state and local wireless tax burden at more than 25 percent, with Arkansas second at 22 percent and Washington third at 21.9 percent. Idaho imposes the lightest load at just 3.4 percent, trailed by Nevada at 6.1 percent and Montana at 7.1 percent. Over the past 20 years, the average monthly revenue per wireless line has dropped from $50.64 to $33.14, but taxes as a share of the monthly bill have soared from 16.2 percent to 28.8 percent. The federal Universal Service Fund surcharge alone jumped from 13.26 percent to 14.39 percent between 2025 and 2026, while the combined state and local tax burden edged up from 14.25 percent to 14.42 percent. With nearly 600 million wireless subscriber connections nationwide, American consumers will collectively pay about $11.4 billion in state and local wireless taxes in 2026—split among $4.6 billion in general sales taxes, $4.2 billion in 911 and 988 fees, and $2.5 billion in telecommunications-specific levies.
The report notes that 911 and 988 fees include "hundreds of millions of dollars that are not actually used for 911 purposes in some states," and it highlights wide variation in emergency-service charges: most Missouri counties charge no fee at all, while Chicago levies $5 per line each month. The authors point out that 13 states impose wireless taxes either on top of sales taxes or as a substitute but at a higher rate, though Maine repealed its Service Provider Tax in 2025. The report also explains that nearly half of all states collect their own state Universal Service Fund charge on wireless services, and some have recently switched from a percentage-based formula to a flat per-line fee, shifting a larger share of the burden onto multi-line family plans.
The analysis warns that policymakers should exercise caution when expanding wireless taxes for two main reasons: wireless levies are regressive and hit low-income households hardest, especially because many rely on mobile service as their sole means of communication, and discriminatory taxation may chill investment in wireless infrastructure that delivers broad economic benefits across sectors including transportation, health care, energy, and education. The report argues that applying general sales taxes to wireless service is appropriate, but targeted excise taxation lacks the traditional justifications—such as a user-pays model or internalizing social costs—and instead raises consumer costs while discouraging the network investment that proved essential during the COVID-19 pandemic and remains vital to remote work and online learning. Without the protection of the federal Permanent Internet Tax Freedom Act, which bars state and local governments from taxing internet access, consumer tax bills would be significantly higher still, the authors note. The bottom line: as wireless service becomes more affordable through competition, government surcharges are quietly siphoning those gains away, and the highest burdens fall on those least able to pay.