For any Illinoisan who was gifted a new smartphone, it comes with the nation’s highest taxes for wireless services.
Combined federal, state and local tax rates for Illinois cell phones average just shy of 35% of monthly bills, according to Tax Foundation data. That gives Illinois the sad distinction of topping the nation for wireless taxes.
No other Midwestern state cracks the top 10. Indiana repealed its utility gross receipts tax, which led to the biggest reduction in wireless taxes in the nation.
Illinois’ wireless tax is in lieu of a sales tax, but the sales tax would be cheaper for cell phone users. The state’s sales tax averages about 9%.
Wireless taxes are regressive, meaning low-income households give up a larger share of their income to pay the taxes. According to Pew Research, the share of low-income adults who rely on smartphones for internet access has doubled since 2013.
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