House votes for 5-year freeze in new cell taxes

Nov 02, 2011 By JIM ABRAMS , Associated Press

(AP) -- The House on Tuesday approved a five-year freeze on any new state and local taxes imposed on cellphones and other wireless services, including wireless broadband access.

The voice vote reflected a consensus that new taxes on wireless have far outpaced average sales taxes on other items and have become a deterrent to the spread of wireless broadband technology.

"We need to encourage the development and adoption of , not tax it out of existence," said Rep. Zoe Lofgren, D-Calif., the sponsor of the legislation.

She said that in many places, the taxation of wireless approaches or even exceeds the rates of sin taxes on goods like alcohol and tobacco.

Her office said now pay 16.3 percent in taxes and fees, more than double the average rate of 7.4 percent on other goods and services. It said taxes on wireless services hits 26.8 percent in Baltimore, 20.4 percent in New York City and 19.9 percent in Omaha, Neb.

"The exorbitant discriminatory taxes on wireless customers are not only unfair, they are counterintuitive, adding another costly impediment to the success of so many American businesses who are struggling in the midst of a prolonged recession," said Rep. Trent Franks, R-Ariz., co-sponsor of the bill with Lofgren.

The bill prohibits state and local governments from imposing new discriminatory taxes on mobile services, providers or property - cellphones - for five years. Discriminatory taxes are defined as those not generally imposed on other types of services and providers or imposed at a lower rate.

The only to speak out against the bill was Rep. Judy Chu, D-Calif., who said it was a special interest measure for the wireless industry that was opposed by state government associations and organized labor.

"This will deny states the flexibility to respond to economic downturns during the moratorium and therefore undermine the ability of states to pay for essential services," she said.

Sens. Ron Wyden, D-Ore., and Olympia Snowe, R-Maine, have introduced identical legislation in the Senate.

"Wireless is a prime example of how every time a new innovation hits the market, governments invent new ways to tax it," Wyden said. He has argued that with the advent of 3G and 4G technology, wireless mobile devices are the gateway to the Internet but that discriminatory and duplicative taxes and fees are regressive, harm lower-income people and make access to the Internet unacceptably expensive.

The legislation was supported by the Cellular Telecommunications Industry Association, which said it was a "crucial step toward providing subscribers with some much needed relief."

Explore further: Cruising high seas, engineers detect fake GPS signals

5 /5 (1 vote)
add to favorites email to friend print save as pdf

Related Stories

Rogers, Videotron team on wireless service

Sep 20, 2005

Rogers Wireless and Videotron signed an agreement Tuesday to provide an array of telecom and Internet services to Canadian customers starting next year.

US senators seek to squash spam

Apr 03, 2009

Two US senators declared war on spam on Thursday. Senator Olympia Snowe, a Republican from Maine, and Senator Bill Nelson, a Democrat from Florida, introduced legislation aimed at curbing unsolicited text ...

FCC seeking more spectrum for wireless broadband

Feb 24, 2010

(AP) -- Federal regulators are hoping to find more wireless spectrum for mobile broadband services by reallocating some airwaves now in the hands of television broadcasters and other users.

Recommended for you

Microsoft unveils Xbox in China as it faces probe

10 hours ago

Microsoft on Wednesday unveiled its Xbox game console in China, the first to enter the market after an official ban 14 years ago, even as it faces a Chinese government probe over business practices.

Teens love vacation selfies; adults, not so much

10 hours ago

(AP)—Jacquie Whitt's trip to the Galapagos with a group of teenagers was memorable not just for the scenery and wildlife, but also for the way the kids preserved their memories. It was, said Whitt, a "selfie ...

Tiny UAVs and hummingbirds are put to test

11 hours ago

Hummingbirds in nature exhibit expert engineering skills, the only birds capable of sustained hovering. A team from the US, British Columbia, and the Netherlands have completed tests to learn more about the ...

US spy agency patents car seat for kids

13 hours ago

Electronic eavesdropping is the National Security Agency's forte, but it seems it also has a special interest in children's car seats, Foreign Policy magazine reported Wednesday.

User comments : 1

Adjust slider to filter visible comments by rank

Display comments: newest first

Nerdyguy
3.7 / 5 (3) Nov 02, 2011
The only lawmaker to speak out against the bill was Rep. Judy Chu, D-Calif., who said it was a special interest measure for the wireless industry that was opposed by state government associations and organized labor.

"This will deny states the flexibility to respond to economic downturns during the moratorium and therefore undermine the ability of states to pay for essential services," she said.

Dear Congresswoman Chu: it is not the responsibility of federal government to impose cellphone usage taxes in order to satisfy your assertion that the states might need some quick cash at a later date.

You have misunderstood your role and that of the Congress. Fortunately, the grownups seem to have called you to task for it.