Alert: Pennsylvania Lawmakers on the Brink of Approving $78 Million Wireless Fee Increase

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!

Take action now!

 


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Alert: Prince George’s County Wants to Increase Wireless Taxes by 50 Percent

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.

Contact the Prince George’s County Executive and County Council members today and tell them to say NO to a wireless tax increase!

Take action now!

 


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Florida Governor’s wireless tax cuts proposal is gaining momentum

Recently, we told you about Governor Rick Scott’s plan to provide much-needed tax relief to Florida’s consumers by reducing the “communications services tax” (CST) that is placed on wireless service – as well as other services like cable and satellite TV.

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!

Take action now!

 


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Congress Makes First Steps Toward Digital Goods Tax Fairness

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.

We thank Senators Thune and Wyden, and Representatives Smith and Cohen for their leadership on this issue and encourage Congress to quickly pass this much needed legislation!

Take action now!

 


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Introduction of ITFA in Senate, Wireless Wearables, Investigating Your Cellphone Bill and More.

Check out this roundup of industry news we shared on social media this week:

Senators Thune and Wyden Introduce Internet Tax Freedom Forever Act

For 17 years, we haven’t been taxed on our Internet access, and Senators Thune and Wyden are working to make that permanent. via USA Today

Wireless Wearable Changing for the Future and the Better

Wearable technology continues to change and innovate to become more personalized, efficient, accurate and seamless for consumers. via Wired

Breaking Down Your Cellphone Bill in Massachusetts

Tax expert Scott Mackey explains Massachusetts wireless consumers monthly bills and what happens to those taxes and fees. via WWLP

Florida Moves to Reduce Communications Sales Tax

Florida is the nation’s 4th highest wireless tax rate, which is why Governor Rick Scott  trying to  cut the tax by $470 million, and getting a lot of support from Floridians. via Sunshine State News

 

 


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