New legislation targets wireless taxes

Reps. Zoe Lofgren (D-Calif.) and Chris Cannon (R-Utah) introduced a bill to impose a five-year freeze on new discriminatory state and local wireless taxes.
“The wireless sector of the technology industry continues to be an important driver for growth in our nation’s economy. Americans don’t just talk on their wireless phones anymore; they access the Internet, get information, pay bills and use wireless to be more productive at work and other every day activities,” said Lowell McAdam, chairman cellular association CTIA and CEO of Verizon Wireless. “With about 15% of each customer’s monthly bill already going to taxes and fees, increasing discriminatory and unfair taxes on wireless customers presents a clear and present danger to future growth. Policymakers should roll back taxes on wireless customers.”
In early 2007, Sens. John McCain (R-Ariz.) and Jim DeMint (R-S.C.) sponsored legislation that would mandate a three-year moratorium on new discriminatory wireless taxes by states.
McCain, the presumptive Republican presidential candidate, made a passing reference to his bill in prepared comments for delivery to Carnegie Mellon University in Pittsburgh, Pa., today.
“The tax laws of America should also promote and reward innovation, because innovation creates jobs. Tax laws should not smother the ingenuity of our people with needless regulations and disincentives,” according to the text of McCain’s prepared remarks. “So I will propose and sign into law a reform agenda to permit the first-year expensing of new equipment and technology … to ban Internet taxes, permanently … to ban new cellphone taxes … and to make the tax credit for R&D permanent, so that we never lose our competitive edge.”
CTIA pointed to a new study it commissioned that found wireless consumers still face a substantial tax burden, paying over twice the 7.1% rate imposed on other competitive goods and services subject to sales tax. According to industry, taxes and fees on wireless service increased four times faster than taxes on other goods and services between 2003 and 2007.
“Keeping wireless taxes at a fair and reasonable level is critical to growing the economy and making the workforce more productive, efficient and informed,” said Steve Largent, president of CTIA. “We should do everything in our power to remove the roadblocks — such as excessive, discriminatory wireless taxes — that stand in the way of progress.”