Legislators Introduce Bills To Restrict State Wireless Taxes

WASHINGTON, March 11, 2011 – Legislators in the House and Senate introduced companion bills that would prohibit states from levying new taxes specific to wireless services in an effort to keep barriers to access for mobile internet services low.

The Wireless Tax Fairness Act would impose a five-year moratorium on new discriminatory taxes on wireless services.   The bills garnered bipartisan support in both the House and the Senate. Sen. Ron Wyden (D-OR) and Sen. Olympia Snowe (R-ME) introduced the Senate version, while Rep. Trent Franks (R-AZ) and Rep. Zoe Lofgren (D-CA) introduced the bill to the House.

In a statement Thursday, the legislators expressed concern that with the growth in wireless services, the majority of states have imposed taxes on those services that exceed local sales tax rates.  Some cash-strapped states have even imposed wireless taxes at rates that exceed those on luxury and vice goods and services.  Those higher taxes -which on average more than double those of other goods and services –  will raise the cost to consumers and create disincentives for companies to invest in wireless technologies, say the lawmakers.

“Our policies should be encouraging new innovations in these technologies not holding them back,” said Sen. Wyden through the statement. “Without action, states and local governments may tack wireless services with so many taxes that innovation and deployment of new technology and investment are simply not lucrative.”

The introduction of the bills drew the approval of the wireless industry as well.

“The Wireless Tax Fairness Act and its five-year ‘timeout’ on new, discriminatory taxes would protect customers from new financial burdens that discourage their use of the wireless technologies that are so integral to our lives,” said Peter Davidson, Verizon senior vice president of federal government relations. “In this fragile economic recovery, now is not the time to impose new taxes that will make mobile broadband connections less affordable for consumers, stifle e-commerce and hinder high-tech innovation.”