Lawmakers advance bill to freeze cell taxes

Lawmakers approved a bill that would put a five-year moratorium on state and local taxes for wireless services, something the wireless industry has been advocating for years.

A House Judiciary subcommittee voted to approve the Cell Tax Fairness Act, which has been picked up during the past several years in both houses of Congress. CTIA and Verizon Wireless (NYSE:VZ) applauded the move. The bipartisan bill has 194 co-sponsors in the House, but would have to be approved by the full House and a companion measure would have to be approved by the Senate in this session of Congress and signed by President Obama for the bill to become law.

The bill was first introduced by Reps. Zoe Lofgren (D-Calif.) and Trent Franks (R-Ariz.), and Lofgren has said that current local, state and federal taxes on wireless services amount to more than more than 15 percent of the total bill on average, compared with 7 percent for most other taxable goods and services.

Importantly, the bill would not affect current taxes, band new federal taxes or apply to wireless fees to support 911 services and the Universal Service Fund, which currently helps fund rural telephone services and phone service for low-income Americans. The FCC is trying to re-orient the USF to support broadband deployment.

The CTIA has been pushing on the cell tax moratorium for years. Detractors fear that the bill could take away tax revenues from cash-strapped local and state governments amid continuing economic difficulties.

For more:
- see this CNet article
- see this National Journal article
- see this CTIA release

Related Articles:
CTIA pushes for repeal of tax on work-issued cell phones
Cell tax bill debated at House hearing
CTIA lauds cell phone tax moratorium bill
CTIA: 5 year tax hiatus on new state, local taxes

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