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House freezes cellular service taxes for five years

updated 05:40 pm EDT, Thu November 3, 2011

Move to halt continuing increases

The US House of Representatives has voted in favor of legislation that places a temporary halt on increases to taxes on cellular service. The approval will prevent state and local taxes on cellphone and wireless broadband service from increasing in the near future, though the bill only freezes the tax hikes for a period of five years.

Proponents of the legislation point out that taxes for wireless mobile services have outpaced other products and services, reaching an average of 16.3 percent. Certain markets face even higher taxes, with New York City customers paying approximately 20.4 percent and Baltimore residents dishing out 26.8 percent.

"We need to encourage the development and adoption of wireless broadband, not tax it out of existence," said California Representative Zoe Lofgren.

Opponents claim the legislation will cut off a potential source of funding for local and state governments, many of which have come to rely on the cellphone taxes, however the bill merely freezes current tax rates rather than eliminating the discrepancy with the sales tax rate.

Oregon Senator Ron Wyden and Main Senator Olympia Snowe will bring the same legislation to vote in the Senate. [via WirelessWeek]



By Electronista Staff
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  1. MyRightEye

    Fresh-Faced Recruit

    Joined: Apr 2008

    -3

    That's good

    But the 10th amendment makes this yet another illegal law. The Feds can only tell the States what to do, if it is expressly stated and authorized in the Constitution.

  1. testudo

    Forum Regular

    Joined: Aug 2001

    +2

    but...

    The federal gov't owns the airwaves, so, in effect, the states are taxing federal government property. So they have the right (or are claiming) to.

    Not to mention the 10th amendment allows them to deal with interstate commerce, which the cell business certainly is.

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