In a troubling new development since our January update, Pennsylvania legislators have introduced a bill, House Bill 911 (HB911), that would increase the state 911 fee on wireless service. This bill is now moving through the Pennsylvania House of Representatives, and the news is not good. The bill would raise the fee 65%, from $1.00 to $1.65, representing an annual $78 million fee increase on wireless consumers and a $114 million fee increase on all telecommunications consumers (including home phone and VOIP services), adding up to a staggering $570 million fee increase over 5 years!
First, let me be clear: We believe that 911 should be efficiently funded because it allows emergency personnel to respond when a caller dials 911. However, this fee increase is beyond excessive and discriminatory for wireless consumers – especially those in lower income households.
There are few important facts to bear in mind regarding Pennsylvania’s CURRENT 911 system:
Today, wireless consumers in Pennsylvania pay $1.00 per month in 911 fees. According to the National Emergency Number Association (NENA), there are only 7 states with a higher statewide 911 fee.
Further, according to Congressional reports, Pennsylvania collected more than $192 MILLION in 911 fees in 2013. This is the second highest collection of 911 fees in the country, just behind Texas.
Today, the Commonwealth has the 8th highest wireless tax burden on consumers through a combined federal, state and local tax rate of almost 20%. This is almost triple the average state/local sales tax of 7% on other goods and services.
This is what HB911 would do to Pennsylvania wireless consumers:
A family of 4 in Philadelphia with a typical “family share plan” with 4 lines would pay almost $240 per year in taxes and fees just on their wireless plan. Other families throughout the Commonwealth would pay nearly $215 per year.
A 911 fee at $1.65 would be the third highest statewide 911 fee in the country, just behind West Virginia and Alabama.
The overall wireless tax burden in Pennsylvania would rise to over 21%, sticking Pennsylvania consumers with the 6th highest wireless tax burden in the country.
Wireless consumers in the Commonwealth already pay more than their fair share of state, federal and local taxes and fees. This enormous fee increase is the last thing they need.
HB911 could be voted on the House floor as soon as Tuesday. Contact your legislators today and tell them to say NO to the current plan to dramatically hike fees in HB911!
If Prince George’s County Executive Rushern Baker has his way, county residents could soon see a painful 50% increase in the county tax on their monthly wireless services.
County Executive Baker’s proposed budget for Prince George’s County includes a 50% increase in the county’s Telecommunications Tax. Specifically this proposed increase from 8% to 12% would result in families potentially paying up to a whopping $360 per year in wireless taxes. This tax increase not only applies to wireless bills – it also hikes taxes on your home phone and cable TV bills too.
Wireless consumers in Prince George’s County already pay more than their fair share of state, federal and local taxes, including:
8% Prince George’s county tax (which would increase to 12%)
6% state sales tax
$0.25 monthly state 911 tax
$0.75 monthly County 911 tax
5.82% federal USF charge
This burden is already too high. Unfortunately, if the tax increase proposal passes, Prince George’s County residents will be faced with a jaw-dropping combined wireless tax and fee burden of 26%, which is the second highest wireless tax rate of any jurisdiction in the country. Only Chicago would be higher.
What’s more, this new wireless rate would be nearly four and a half times higher than the 6% sales tax rate! The already high tax rates on wireless services are particularly harmful for families and small businesses who view their wireless service as essential in the modern, connected world. This is especially true for individuals in lower income households who rely more on their wireless device as their sole means of communication and Internet access. Why place an even greater burden on those who need their wireless service the most?
Back in 2008, Prince George’s County voters overwhelmingly rejected a similar wireless tax increase proposal by a 71% to 29% margin. The message is clear: Prince George’s County residents do NOT want a wireless tax increase.
Good news is that this effort is now gaining momentum in the Florida Legislature. Senator Dorothy Hukill is sponsoring a bill (SB110) that is being considered in the Florida Senate, and Representative Matt Gaetz is sponsoring a companion bill in the state’s House of Representatives.
If the legislature approves the Governor’s tax cut, it would save Florida’s wireless consumers hundreds of millions of dollars, cut the CST by 3.6 percent and drop Florida out of the top ten worst states for wireless taxes.
Specifically, the Governor’s proposal would:
Reduce the monthly state CST on wireless services from 9.17 to 5.57 percent.
Provide consumers with an annual savings of $43.00 on a monthly service plan of $100.
Save Floridians an estimated $470 million annually in wireless and TV taxes.
Floridians currently pay over 22 percent in federal, state and local taxes on their monthly wireless bills, which is the 4th highest wireless tax rate in the country and three times higher than the general sales tax of other goods and services in the state. This high tax rate affects virtually all Floridians and is especially tough on families and senior citizens who are struggling to live on a tight budget.
It’s time for wireless tax relief in the Sunshine State. Tell your legislators to support the Governor’s wireless tax cuts proposal!
This week, Senate Commerce Committee Chairman John Thune (R-SD) and Senator Ron Wyden (D-OR), and House Science, Space, and Technology Committee Chairman Lamar Smith (R-TX) and Representative Steve Cohen (D-TN) introduced identical versions of the ‘Digital Goods and Services Tax Fairness Act’ in the U.S. Senate (S. 851) and House of Representatives (H.R. 1643) respectively.
This bipartisan legislation prevents digital goods and services purchases, such as apps, music and ringtones, movies and TV episodes, e-books and video games, from being subject to multiple and discriminatory taxes.
Right now it’s possible to be taxed by several different jurisdictions for the same digital goods purchase. For example, let’s say you pay your wireless service bill in one area code, but you buy something with your device when you’re in another one, from a company in yet another part of the country. Under today’s tax regulations, you can potentially be taxed by all three jurisdictions!
With state and local governments desperate for new revenue sources, that scenario is quite possible, and there’s currently no law in place to keep that from happening. That’s why it’s important to make sure wireless consumers are treated fairly and that we have a “national framework” or some “rules of the road” for how the digital marketplace is fairly taxed at the state and local levels.