Can you hear the cell phone taxes now?

Add outrageous cell phone taxes to the major financial difference between living in states like Idaho and Montana, versus Washington state.

When you open your cell phone bill each month, the price you agreed to with your carrier is only part of the story. Hidden beneath the advertised rate is a complex web of taxes, fees, and surcharges—many of them imposed by state and local governments. These charges vary widely across the United States, leading some consumers to pay nearly 25% more in taxes and fees than others in neighboring states.

Cell phone users pay a combination of:

• Federal Universal Service Fund (USF) fees, which help subsidize rural communications and low-income support programs.
  

• State and local sales taxes, which apply to most goods and services.
  

• State-specific telecommunications taxes, which often predate modern wireless services and were originally designed for landlines.
  

• 911 fees, which fund emergency call systems.

  
  

Here are a few examples of states with the highest effective cell phone tax rates (as of recent estimates):

• Illinois: Among the highest in the country, with combined state, local, and federal charges topping over 23% of the bill.
  

• Arkansas: Heavy state universal service and 911 fees push effective rates above 21%.
  

• Washington: High state taxes and local utility surcharges combine for a burden near 22%.
  

• Nebraska: Local telecommunications taxes and surcharges add up quickly, exceeding 20%.
  

• New York: Wireless consumers face layered state and city taxes, approaching 21% in many areas.

  
  

In contrast, Idaho (3.35%), Montana (7.03%), Oregon (8.93%), and Delaware (8.64%) have some of the lowest wireless tax burdens.

State and local governments have long relied on telecommunications taxes as a steady revenue stream. As more consumers dropped landlines and moved to wireless, lawmakers simply applied the same taxing structures—sometimes without updating the rates or simplifying the system.

Unfortunately, these taxes are regressive, disproportionately impacting lower-income households who rely heavily on wireless service as their primary internet access. There's also complexity and lack of transparency, making it hard for consumers to know what they’re actually paying for.

While the convenience of mobile service is undeniable, the patchwork of state and local taxes means you might be paying far more—or less—than your neighbors in the next state over.