June 05, 2009

Gillibrand Joins Wyden, Snowe In Introducing 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. Senator Kirsten Gillibrand joined today with Senators Ron Wyden (D-Ore.) and Olympia Snowe (R-Maine) in introducing 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.), and John Ensign (R-Nev.), 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.
 
“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.”
 
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.