WASHINGTON-Gov. Michael Leavitt, chairman of the National Governors’ Association, last week released a report that he says shows that telecommunications carriers are over-taxed.
“We are suggesting with this paper that the telecommunications industry is over-taxed,” said Gov. Leavitt (R-Utah).
The paper, “Telecommunications Tax Policies: Implications for the Digital Age,” is being presented as part of Leavitt’s theme of helping states to govern in the global economy and is one of a series of papers that will be released this year, Leavitt said. Due to NGA policy guidelines, the paper will not be presented to Capitol Hill but parts may become part of NGA’s lobbying efforts, he said.
One area that it is not discussed in the paper is the elimination of the 3-percent federal excise tax favored by the Cellular Telecommunications Industry Association and the United States Telecom Association.
“The matter of the 3-percent excise tax has been a side-bar discussion. I do believe that if the NGA comes up with a definitive report that some part of that federal excise tax will be part of that [position],” Leavitt said.
States need to review their tax policies because they have not kept pace with the rapid change in telecommunications, Leavitt said, echoing the report. “Telecommunications industry people make it clear that they are among the highest taxed among all industries,” he said.
Another problem that telecommunications carriers face is that they are taxed at the federal, state and local levels-each adding its own to an ever growing pyramid.
“It is not only that rates are too high but they are stacked … federal and local” taxes are added on top of that, Leavitt said. Simplifying this “maze,” as Leavitt said, could hurt local governments that “have quite of bit dependence” on telecommunications taxes.
