U.S. House Passes Moratorium on New Wireless Taxes

By Tracey E. Schelmetic November 02, 2011

The U.S. House of Representatives has approved a moratorium on state and local governments from adding any new taxes to U.S. wireless phone subscribers' cell phone bills. The legislation, co-sponsored by Rep. Zoe Lofgren (D-CA) and Rep. Trent Franks (R-AZ), also applies to wireless broadband.

According to the Washington Post, the legislation is a commentary on the fact that new taxes on wireless mobile services have far outpaced average sales taxes on other items and have become a deterrent to the spread of wireless broadband technology.

“We need to encourage the development and adoption of wireless broadband, not tax it out of existence,” said Rep. Lofgren, who noted that in some localities, taxation on wireless services is on par with – or even exceeds – the rates of so-called ‘sin taxes’ on cigarettes and alcohol. The highest taxes on wireless services in the country are in Baltimore, with a rate of 26.8 percent; New York City, with a rate of 20.4 percent; and Omaha, Nebraska with a rate of 19.9 percent.

The wireless industry trade association, CTIA, lauded the legislation.

“On behalf of the 300 million wireless customers in the U.S., CTIA applauds the Wireless Tax Fairness Act’s lead sponsors, Representatives Lofgren and Franks, who worked tirelessly to get the bill approved in the House,” said the group in a release. “Today’s vote is a crucial step toward providing wireless subscribers with some much needed relief by putting a five-year freeze on new, discriminatory taxes and fees on their monthly bills. In light of the challenging economy, we hope the U.S. Senate moves swiftly to pass the companion bill.”

According to the Washington Post, the bill, if it becomes law (the Senate will need to pass a comparable bill) will prohibit state and local governments from imposing new “discriminatory” taxes on mobile services (including cell phone services), providers or property for five years. Discriminatory taxes refers to taxes not generally imposed on other types of services and providers or imposed at a lower rate.




Tracey Schelmetic is a contributing editor for TechZone360. To read more of Tracey's articles, please visit her columnist page.

Edited by Jennifer Russell

TechZone360 Contributor

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