House bill aims to ban new cell phone taxes

Rep Zoe Lofgren (D-CA) and five co-sponsors have introduced the Cell Fairness Act (HR 5793), a bill that would ban new state or local taxes on mobile phone services for a period of five years. In a statement, Lofgren said that between January 2003 and July 2007, the taxation rate on wireless services increased four times faster than the rate for other taxable goods and services. As a result, consumers pay 15.19 percent in federal, state, and local taxes on their cell phone bill, compared with 7.07 percent in taxes for most other goods and services. The bill, which is similar to Senate legislation introduced last year, would not affect current taxes, nor does it call for a ban on any new federal taxes. Furthermore, the ban would not apply to fees meant to subsidize emergency 911 services nor the universal service charge, which funds telecommunications infrastructure for low-income and rural residents. The federal excise tax on phone services, which was originally created to support the Spanish-American War, was dropped by the Internal Revenue Service and the Department of the Treasury in August 2006. The wireless industry's lobbying arm, the Cellular Telecommunications Industry Association (CTIA), is supporting the bill.
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