Cell Phone Taxes Frozen

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The House voted on Tuesday to freeze any new taxes from being imposed on cell phones or any other wireless services in the United States, including wireless broadband access. The voice vote was an indication of the consensus that the rate of new taxes on wireless mobile services has been far outpacing the average sales tax on other items and is actually beginning to become a deterrent to the growth of wireless broadband technology in the United States.

“We need to encourage the development and adoption of wireless broadband, not tax it out of existence,” says Rep Zoe Lofgren, D-California, who sponsored the legislation to put a five year freeze on both state and federal taxes. Lofgren went on to add that in many places, the taxation of wireless technology is close to and in some cases even more than the level of “sin taxes” on items such as tobacco and alcohol. Wireless customers are currently paying 16.3 percent in fees and taxes, according to her office, which is more than twice the average rate of 7.4 percent on other services and goods. Taxes on wireless services have actually gone as high as 19.9 percent in Omaha, Nebraska, 20.4 percent in New York City, and 26.8 percent in Nebraska.

“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 wake of a prolonged economic recession,” notes the bill’s co-sponsor, Rep Trent Franks, R-Ariz.