New York’s wireless taxes among highest in nation

(The Center Square) — New Yorkers are paying some of the country’s highest wireless taxes, fees and surcharges, according to a new report from a tax watchdog.

The report by the Tax Foundation found that New York had the nation’s 4th highest level of taxes, fees and government surcharges on wireless services, or 20.40% in 2023. Coupled with the federal 10.83% Universal Service Fund charge, New Yorkers paid a combined 31.23% for wireless services this year, the report noted.

Illinois residents continue to have the highest wireless taxes in the country at 33.8%, according to the report, followed by Arkansas at 32.2% and Washington at 32.1%. Idaho residents pay the lowest wireless taxes at 13.7%, according to the report.

Texas saw the largest increase in wireless taxes in 2023 — from 24.1 to 28.3% — which the report’s authors attributed to an increase in the state’s Universal Service Fund charge.

The report noted that New York is among 14 states that impose some type of tax on wireless services in addition to local option sales taxes.

“In most of those states, the taxes are additive and only further increase the tax burden on wireless services,” the report’s authors wrote. “Local taxes have a significant impact on the overall tax burden on wireless services.”

New York is also among several states that have increased fees, which are tacked onto wireless service bills, such as a charge for 911 services, in the past year.

Nationally, taxes, fees and government surcharges make up a record-high 24.5% tax on taxable voice services, according to the report.

In 2023, U.S. wireless subscribers will pay about $12.6 billion in taxes, fees and government surcharges to state and local governments in 2023, the report’s authors said.

For the typical American household with four phones on a “family share” plan, paying $100 monthly for taxable wireless services breaks down to nearly $294 in taxes, fees and government surcharges. That’s down slightly from $305 in 2022, but still much higher than previous years.

The report’s authors noted that the Federal Universal Service Fund charge rate decreased in 2023 for the first time since 2017, dropping significantly from 12.2% to 10.8%.

But that reduction was offset by a “sizable” increase in state and local wireless tax rates, from 13.2% to 13.7%, they said.

The wireless market has become increasingly competitive, which has led to steady declines in the average price for wireless services. Over the last decade, the average monthly revenue per wireless line has fallen from $47.00 per month to $34.56 per month, the report’s authors noted.