Wireless Tax Fairness Act
H.R. 1002 and S. 543
Some states also double-tax consumers by imposing a gross receipts (GRT) or excise tax on wireless communications in addition to the general sales tax.Because discriminatory, new state and local taxes and fees on wireless services are typically regressive – and significantly increase consumers’ cost of service – the burden often falls especially hard on fixed-income users such as seniors, minority communities, working families and small businesses.Too often, this hefty tax bite puts wireless services out of reach for far too many who have come to rely upon its value, convenience and safety as the preferred communications tool for their daily lives.
Consumers in 47 states and the District of Columbia now pay wireless taxes, fees and government charges that exceed the general retail sales tax rate.Wireless tax rates in many states (22 of them and D.C.) have hit double digits, with some states (5 of them) breaking the 20 percent mark in monthly taxes and fees when federal, state and local are combined.
NEWANYFLIL
16%7.4%
The average consumer pays 16.3 percent of their wireless bill in combined federal, state and local taxes, fees and surcharges each month.For other goods and services, the average sales tax rate is only 7.4 percent.The effective rate of taxation on wireless services has increased three times faster than the rate on other taxable goods and services between 2007 and 2010, resulting in billions (the annual consumer tax burden is now about $21 billion) in excessive tax costs for wireless consumers.
3x
20072010 vs.
WIRELESS TAXESGOODS &SERVICES
Why we need the ‘Wireless Tax Fairness Act’
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The findings of the 2010 Wireless Tax Report by Scott Mackey make it clear that imposing taxes on wireless services that are more than double what general businesses pay should be considered discriminatory and excessive, and must be addressed immediately. To that end, Rep. Zoe Lofgren and I introduc[ed] the Wireless Tax Fairness Act… The legislation proposes to freeze current tax structures on wireless services for 5-years, something that I believe will benefit consumers and help to galvanize technological advancement in the long run.
– Representative. Trent Franks
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CONGRESSIONAL BUDGET OFFICE (CBO) COST ESTIMATE
July 28, 2011‘Wireless Tax Fairness Act of 2011’H.R. 1002 / S. 543
As ordered reported by the House Committee on the Judiciary on July 14, 2011
ESTIMATED COST TO THE FEDERAL GOVERNMENT:
(The bills) would not assign any significant new responsibilities to any federal agencies, and
CBO estimates that implementing the legislation would have no significant cost to the federal government.
ESTIMATE IMPACT ON STATE, LOCAL, AND TRIBAL GOVERNMENTS:
(The bills) would impose an intergovernmental mandate as defined in UMRA because it would preempt the authority of state and local governments to impose new taxes, or change existing taxes, on wireless services, providers, or property. (However) the authority of state and local governments to impose or change taxes they broadly impose on services, businesses, or property would be preserved under the bill. The bill also would not preempt the authority of governments to collect revenue from taxes on wireless services that have already been enacted and enforced. CBO did not identify any state or local governments that planned to change or impose new wireless taxes in the next five years; therefore,
CBO estimates that the preemption would impose no cost on state, local, or tribal governments.
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