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Bill seeks 5-year tax freeze on wireless services

Fri, 03/11/2011 - 7:10am
Maisie Ramsay, Wireless Week

A bipartisan bill introduced yesterday by House and Senate lawmakers would freeze new taxes and fees on wireless services for five years.

The Wireless Tax Fairness Act, introduced Thursday by Reps. Zoe Lofgren (D-Calif.) and Trent Franks (R-Ariz.) and Senators Ron Wyden (D-Ore.) and Olympia Snowe (R-Maine), provides a five-year moratorium on new discriminatory taxes and fees imposed only on wireless services.

Wireless customers pay an average of 16.26 percent in taxes and fees, more than twice the average rate of 7.4 percent on other taxable goods and services, according to a recent report from KSE Partners economist Scott Mackey. In five states – Illinois, Florida, New York, Washington and Nebraska – the cumulative federal, state and local taxes are more than 20 percent.

"The discriminatory and duplicative taxes being levied by the states are regressive and harm lower-income Americans the most while making access to the Internet unacceptably expensive," Sen. Wyden said. "Without action, states and local governments may tack wireless services with so many taxes that innovation and deployment of new technology and investment are simply not lucrative."

CTIA President and CEO Steve Largent applauded the proposed legislation. "This freeze would not take away any existing revenue for state and local governments but would provide time so the localities can reform their existing tax systems," Largent said.

Similar legislation that attempted an all-out ban on new state and local discriminatory wireless taxes was introduced in 2009 by Sen. Wyden, but the bill died in committee.

The latest legislation appears to have more support than the 2009 bill. The act has 144 Democrat and Republican co-sponsors in the House. The legislation has been referred to the House Committee on the Judiciary for debate.

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