Senators introduce bill banning wireless taxes

Two senators have introduced legislation that would put a five-year moratorium on wireless and cell phone tax increases.

The Mobile Wireless Tax Fairness Act of 2009, introduced by Sen. Ron Wyden (D-Ore.) and Sen. Olympia Snowe (R-Me.), would prohibit federal, state and local tax increases on wireless services and infrastructure. The bill has drawn support from Sen. John McCain (R-Ariz.), who along with other supporters of the bill, contends that it will help consumers and that wireless companies have been hit unfairly with taxes.

The average tax rate for goods and services is 7.07 percent, but federal, state and local taxes make up 15.9 percent of the average wireless bill, according to figures from Phoenix Business Journal. Between January 2003 and January 2007, the effective tax rate on wireless services increased four times faster than the rate for other taxable goods.

"It is very troubling that wireless consumers have been taxed four times more than other taxable goods and services over an almost four-year period," CTIA President Steve Largent said in a statement. "The Wyden-Snowe bill will protect consumers from new discriminatory taxes and fees while preserving existing revenue for states and localities."

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