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House passes freeze on wireless taxes

Wed, 11/02/2011 - 3:19pm
Andrew Berg, Wireless Week

Much to the dismay of local governments, the House of Representatives yesterday passed the AT&T- and Verizon-backed Wireless Tax Fairness Act of 2011 (H.R. 1002), which places a five-year freeze on new taxes for wireless services.

The bill, which was sponsored by Rep. Zoe Lofgren (D-Calif.), will now move to the Senate.

"I'm delighted that my colleagues in the House joined me in supporting the Wireless Tax Fairness Act," wrote Lofgren. "This bill is a common sense approach to tackling the rapidly increasing and discriminatory nature of local and state wireless service taxation. We need to encourage the development and adoption of wireless broadband, not tax it out of existence."

CTIA lauded the House's passage of the bill as one more step toward affordable broadband for all.

"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," said Steve Largent, CTIA's president and CEO. "In light of the challenging economy, we hope the U.S. Senate moves swiftly to pass the companion bill."

While the bill appears to have populist momentum, it hasn't been uniformly supported. In July, the National League of Cities (NLC), along with other city and county organizations, sent an open letter to the House Judiciary Committee voicing its opposition to the bill.

The NLC argued in its letter that the legislation represents "an unwarranted federal intrusion, as it carves out one sector of the communications industry for favorable tax treatment," and "creates an uneven playing field and unfair competition for other communications service providers."

Lofgren said that she is hopeful that the Senate will pass its version of the bill. "We need to encourage the development and adoption of wireless broadband," Lofgren wrote, adding that wireless customers pay an average 16.3 percent in taxes and fees compared with the average rate of 7.4 percent for other goods and services.

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