I fully support MMM's internet sharing arrangement and I would happily do the same thing if I could *and* sleep well at night doing it. But we're down to "degrees of wrongness" here and I don't see this significantly less or more wrong than not paying use tax or lying about your address when buying a mobile phone.
I think we basically are down to "degrees of wrongness," and giving a company a fake address while actively lying to them seems a lot more wrong. It's also a lot more clearly illegal.
In MMM's case, the government doesn't know MMM has an internet connection because the residential internet account is not in his name nor is his address connected with any residential internet account. Yet he does have an internet connection. It is highly likely his neighbors are violating a term of service on their account by re-selling their connection, in part, to MMM. Whether MMM has committed some sort of fraud on the government by not getting his own Internet connection is up for debate, though. Just because the state is getting less in use taxes because MMM is sharing an Internet connection doesn't necessarily make what he's doing illegal. If somebody can find statutory law or case law on the subject from MMM's home state that says it is illegal, than there's your answer. But I can easily see how it wouldn't be illegal. Technically, because MMM is paying for part of the Internet bill he is paying for some of the use tax associated with it -- the only real question is whether it is
illegal in his state for two separate physical structures or two separate families to only use one Internet connection.
In the situation described by the OP -- that's clearly illegal. I'm not sure how it can't be. He is actively telling a telecommunications company that he is living in another state, specifically to avoid paying the taxes in the state he is actually living in. He is defrauding the telecommunications company who then passes on that fraudulent information to the states involved (either actively by giving the OP's pretend state the lower use tax, or passively by not giving the OP's real state the higher use tax). It's clear in the bill that those taxes are government-mandated taxes and that they would be passed on to the government. By actively avoiding the taxes the OP is actually supposed to be paying by living in a certain state, he's defrauding the government and it's a form of tax evasion. He isn't sharing somebody else's phone plan and paying half the bill -- he's getting his own phone plan using fraudulent information.
I should add that I was accidentally paying Washington state use tax on my phone for years, even though I had changed my address with AT&T. They didn't notice and I didn't notice that they weren't charging me Texas state taxes. When I finally did discover it, I called them up and they changed it. Texas taxes were lower, so I had been screwing myself for those years and Washington state benefited.