House Passes Bill to Ban New Mobile Taxes for 5 Years

On Tuesday, the U.S. House of Respresentaties approved a bill that would prohibit state and local governments from imposing new discriminatory taxes on mobile and wireless services, including cellphones and wireless broadband access, for five years.

The bill reflects a growing belief in Congress that new taxes on wireless mobile services have surpassed average sales taxes on other items, thus preventing the spread of broadband technology. The legislation, sponsored by Rep. Zoe Lofgren, D-Calif. and Trent Franks, R-Aiz., is known as the Wireless Tax Fairness Act and would ban new mobile-only taxes from all levels of government for five years. 

When the legislation was introduced in March, Lofgren claimed that U.S. consumers pay an average tax of 16.3% on mobile services, but only 7.4% on other goods and services. In addition, Baltimore customers pay 26.8% tax, while New York City mobile customers pay 20.4%, according to Lofgren. 

Several mobile carriers and trade groups have applauded this cause, with the Cellular Telecommunication Industry Association lending their support. “Today’s vote is a crucial step toward providing wireless subscribers with some much needed relief by putting a five-year freeze on new, discriminatory taxes and fees on their monthly bills,” said the CTIA in a statement. “In light of the challenging economy, we hope the U.S. Senate moves swiftly to pass the companion bill.” 

A similar bill is awaiting action in the Senate Finance Committee and requires their approval before it is sent to President Obama for his signature.