Wyden, Snowe Introduce Legislation to Prevent Discriminatory Wireless Tax Increases
"Mobile Wireless Tax Fairness Act of 2009" would grant a five-year moratorium on new telecom taxes
WASHINGTON, DC - Working to ensure American telecommunications networks remain on the cutting edge of wireless technology and keep pace with foreign competitors, U.S. Senators Ron Wyden (D-Ore.) and Olympia Snowe (R-Maine) have introduced the Mobile Wireless Tax Fairness Act of 2009 to enact a five-year moratorium on new or increased taxes on wireless telecommunications infrastructure and services. Supported by a bipartisan coalition of Senators including Robert Menendez (D-N.J.), John McCain (R-Ariz.), Patty Murray (D- Wash.), John Ensign (R-Nev.), and Kirsten Gillibrand (D-N.Y.), the legislation will keep taxes on telecommunication products and services - which are already on par with the "vice taxes" of tobacco and alcohol - from spiraling out of control.
"Wireless technology is becoming faster, more reliable, and able to get into the hands of more and more Americans," Wyden said. "This legislation will keep American companies competitive by putting the brakes on unfair wireless tax increases -- allowing American companies to remain leaders in innovation and making it easier for Americans to afford these services. We can't allow the cell phone to be the next bare necessity that simply becomes too expensive to own."
"While the telecommunications industry has emerged as one of the most vital and innovative sectors of the 21st century, American consumers are increasingly getting hit with excessive and discriminatory taxes to have access to wireless services in their day-to-day lives," said Senator Snowe, a senior member of the Senate Commerce Committee. "By banning these burdensome taxes, this legislation will equalize the taxation of the wireless industry with that of other goods and services and protect the wireless consumer from the weight of fees, surcharges, and general business taxes."
While the average tax rate for goods and services is 7.07 percent, the typical consumer pays 15.9 percent of their total wireless bill in federal, state and local taxes. The effective rate of taxation on wireless services increased four times faster than the rate on other taxable goods and services between January 2003 and January 2007. The Mobile Wireless Tax Fairness Act will prohibit state or local governments from imposing any new discriminatory taxes on wireless services or products that is not applied to other products or services for a period of five years.
This legislation will allow American telecommunications companies to keep pace with foreign competitors and provide better services and products to consumers. Currently, the industry is in the midst of upgrading to the 4G network standard, which would provide the bandwidth necessary to offer true high speed access in rural areas.
Senator Menendez said: "Cell phones and wireless devices are increasingly a necessity for our personal and business uses. We want to ensure that the costs to families and businesses don't spiral out of control and that there is no slow-down in delivering the most advanced technology that allows us to communicate easier and for less. We should not allow excessive taxes on technology to slow innovation."
"As more and more Americans rely on wireless technology - in some cases even abandoning the use of land lines all together - we must ensure no new taxes are levied against the use of their mobile phones," said Senator John McCain. "Americans are experiencing tough economic times and the last thing American taxpayers need is another increase in taxes."
"During these tough economic times, we must avoid excessively taxing families and businesses for cell phones and internet access," said Senator Gillibrand. "This legislation gives consumers a break, and helps American companies compete in the global economy. Preventing tax hikes on wireless technology will lead to development of high tech infrastructure and aid our economic recovery."
Senator Wyden is a long-time advocate of the expansion of internet and telecommunications infrastructure development. Working with colleagues from both sides of the aisle, Wyden has four times protected Internet providers from content-related litigation. He has also fought to protect the Internet from being hit with multiple discriminatory taxes from thousands of state and local tax authorities - and has worked to extend that protection.