As a savvy consumer, you know that the price you see advertised for wireless service is never the price you actually pay. Carriers like Verizon love to lure you in with flashy promotions and seemingly reasonable rates, only to sock you with a slew of taxes and fees that inflate your final bill. These extra charges can add 20% or more to your monthly cost–an unpleasant surprise for any shopper.
But just how much are you forking over in fees and what exactly are you paying for? Verizon‘s taxes and surcharges are notoriously opaque, buried in confusing line items and fine print on your bill. Even for an expert, it can be nearly impossible to decipher where all these mystery charges come from.
The average Verizon customer paid a whopping 12.44% in combined federal, state, and local taxes and fees on their wireless service in 2021, according to data from the Tax Foundation. For reference, that‘s 4.5x higher than the average 2.7% tax rate on other goods and services!
So if you have an $80/month Verizon plan, you‘re likely paying around $10 extra in taxes and fees every billing cycle. That adds up to over $120 per year–a substantial hidden cost that Verizon conveniently glosses over when promoting its plans.
Decoding Verizon‘s Taxes and Fees
So where exactly does that extra $10 go? Broadly speaking, Verizon‘s bill charges fall into two categories:
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Government taxes and fees: Charges levied by federal, state, and local governments that Verizon is required to collect from customers and pass on to the respective agencies. This includes things like state and local sales taxes, 911 fees, and Universal Service Fund contributions.
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Verizon surcharges and fees: Additional charges tacked on by Verizon itself to recoup costs and fund programs. Unlike government taxes, this money goes directly into Verizon‘s bank account. Common Verizon fees include the Federal Universal Service Charge, Regulatory Charge, and Administrative Charge.
According to Verizon‘s website, the typical customer pays the following in monthly taxes and surcharges:
| Charge | Average Cost |
|---|---|
| State and Local Sales Taxes | $3 – $4 |
| Federal Universal Service Fee | $3 – $5 |
| State Universal Service Fee | $1 – $2 |
| 911 Fees | $1 or less |
| Regulatory Charge | $3 – $4 |
| Administrative Charge | $1 – $2 |
Depending on your location, you may also see a smattering of other small government fees on your bill, like a State Telecommunications Relay Service fee or State Communications Services Tax. All together, these combined charges can easily exceed $15/line each month–a significant burden that disproportionately impacts low and middle-income consumers.
The Problem with Hidden Fees
The biggest issue with Verizon‘s taxes and fees isn‘t even the cost–it‘s the lack of transparency. Verizon deliberately downplays and hides these extra charges when advertising service plans, leaving customers in the dark about the true cost of their wireless service.
For example, Verizon‘s website boldly proclaims its cheapest unlimited plan starts at just $70/month for one line. But that conveniently ignores the $10+ in monthly taxes and fees subscribers are stuck paying on top of that base rate. The real price is closer to $80, but Verizon doesn‘t admit that until you‘re several clicks deep into the checkout process.
Consumer advocates have long criticized this kind of deceptive pricing. "Hiding the true cost of service behind a myriad of fees is a sneaky tactic that providers use to jack up your bill without you realizing it," says Sally Greenberg, Executive Director of the National Consumers League. "All these nickel-and-dime charges add up to billions in revenue for carriers, but make it impossible for consumers to comparison shop or budget effectively."
Even fees that Verizon is required to collect, like the Federal Universal Service charge, are misleadingly portrayed. Verizon‘s website buries the FUSF charge in a hard-to-find footnote, describing it vaguely as a fee that "helps make phone service affordable and accessible for low-income customers, rural areas, schools and libraries." Nowhere does it mention the current 11.4% FUSF tax rate or what that would actually cost you each month.
Verizon also conveniently omits some of its most egregious made-up charges in the in the fine print, like the $1.95 "administrative charge" that nets the company over $800 million annually for essentially pushing some paperwork. An informal survey of nearly 200 Verizon customers found that 95% had no idea they were paying this fee until they combed through their bills line-by-line.
Fighting Back Against Wireless Taxes and Fees
Unfortunately, many of the taxes and fees on your Verizon bill are non-negotiable–the cost of doing business in the heavily-regulated U.S. wireless industry. However, that doesn‘t mean you have to just accept these charges without question. Here are some tips to keep pesky taxes and fees in check:
• Opt for fee-inclusive pricing: Verizon offers some plans with taxes and fees included in the sticker price (though a few of its own surcharges may still apply). Choosing one of these options, like the 5G Get More plan, gives you more predictability in your monthly bill–what you see is what you pay.
• Skip the payment plan: Buying your phone outright, either from Verizon or a third-party seller, can save you money on interest and fees over time compared to spreading payments out over 24-30 months. If you do opt for a device payment plan, at least factor the associated taxes/fees into your cost comparison.
• Just say no to add-ons: Verizon loves to push pricey extras like device insurance, VPN service, and streaming subscriptions. But each of these tack-ons comes with its own set of taxes and fees that can add $5-10 to your bill. Be ruthless about cutting extras you don‘t truly need.
• Analyze every charge: Comb through your bill in detail each month and google any confusing fees you don‘t recognize. If you spot an error or unexpected charge, contact Verizon ASAP to dispute it. The company has been known to sneak in new surcharges without warning, hoping customers won‘t notice.
• Consider pre-paid: If you‘re truly fed up with taxes and fees, consider switching to a pre-paid carrier like Verizon‘s Visible brand. With prepaid service, most taxes/fees are included in the flat monthly price, saving you the sticker shock of a stuffed post-paid bill.
Consumer advocates also recommend filing complaints with the FCC if you feel that Verizon has crossed a line with excessive or deceptive fees. The more consumers speak up, the more pressure carriers face to rein in bogus charges and improve transparency around pricing.
The Cost of Connectivity
Taxes and fees may seem like an annoying fact of life in the wireless world, but that doesn‘t mean we have to just accept them blindly. Verizon and other carriers count on consumer complacency to get away with sneaky fee hikes and misleading pricing. But by staying diligent and fighting back against unfair charges, we can hold Big Telecom accountable and keep connectivity costs in check.
After all, wireless service is increasingly essential to full participation in society. Yet the rising cost of staying connected–driven in large part by regressive wireless taxes and fees–threatens to leave many Americans behind. Before a bevy of recent tax hikes, 1 in 4 smartphone owners already reported having to cancel or suspend service due to cost.
The average Verizon customer‘s tax and fee rate has jumped over 45% in just the past decade, far outpacing the growth of other consumer goods:
| Year | Avg. Verizon Tax/Fee Rate |
|---|---|
| 2010 | 8.4% |
| 2015 | 11.1% |
| 2021 | 12.4% |
Source: CTIA Wireless Industry Indices Reports
If this trend continues unabated, analysts warn that connectivity could become essentially a luxury good–widening the digital divide and kneecapping our competitiveness on the global stage. We need bold action to simplify pricing, reduce ballooning wireless taxes, and keep mobile service affordable and accessible for all.
The first step is to educate consumers about the true cost of their wireless service and where all those mystery fees on their bills really go. Sunlight is the best disinfectant when it comes to sneaky charges and misleading pricing. Arm yourself with the knowledge to spot an unfair fee–and the conviction to fight back when companies like Verizon try to pull a fast one.
Key Takeaways
- Taxes, fees, and surcharges can add 20% or more to your monthly Verizon bill.
- Verizon‘s average customer tax/fee rate is a whopping 12.4%, far higher than the typical sales tax.
- Most taxes and fees are hidden in the fine print, leading to sticker shock for consumers.
- Some Verizon fees, like the Administrative Charge, are pure profit that provide zero value.
- You can minimize extra charges by choosing a plan with included taxes/fees, buying phones outright, and avoiding unnecessary add-ons.
- Analyzing your bill for errors and filing FCC complaints can also help keep unfair charges in check.
- Skyrocketing wireless taxes and fees threaten to make connectivity unaffordable for many Americans.
- We need systemic change to simplify pricing, increase transparency, and keep wireless service accessible for all.
