by: Tom Corelis
Trade groups praise bill as tax relief for beleaguered customers
Seeking to curb an already-high average tax rate on cell phone service, democratic congresswoman Zoe Lofgren introduced the “Cell Tax Fairness Act of 2008,” which if passed would create a 5-year moratorium on new wireless taxes or fees.
A press release posted to Zofgren’s website notes that a typical consumer “already pays 15.19% in federal, state, and local taxes on their cell phone bill as compared to 7.07% for most other taxable goods and services. Between January 2003 and July 2007, the effective rate of taxation on wireless service increased four times faster than the rate for other taxable goods and services.”
The bill, introduced April 15, quickly garnered industry support. Cellular Telecommunications and Internet Association (CTIA) CEO Steve Largent noted that “excessive, discriminatory” wireless taxes “stand in the way of progress,” lauding the Cell Tax Fairness Act as a “positive step in the right direction.” MyWireless.org, an advocacy group allegedly chaired by CTIA executives, called the bill “pro-consumer” legislation conducted on behalf of the “millions of American” who want “much-needed” tax relief.
Kimberly Kuo, executive director of MyWireless.org, cited an unidentified poll that concluded that “89% of wireless consumers are extremely happy with their wireless services and choices,” before adding that they “don't want government meddling with regulations in a marketplace that works for them.” 85% of those consumers, said Kuo, favored a Congress that passed an “escape” from “discriminatory” taxes and fees.
The Cell Tax Fairness Act only prohibits additional state and local taxes, with exceptions made for fees that subsidize emergency 911 services. Current drafts cover both current cellular services as well as future 700 MHz service, using broad text that applies to almost any communications service that works with cell phones.
“Increasing discriminatory and unfair taxes on wireless customers presents a clear and present danger to future growth,” said CTIA chairman and Verizon Wireless president Lowell McAdam. “Policymakers should roll back taxes on wireless customers.”
