Last night, the U.S. House of Representatives passed the Wireless Tax Fairness Act (H.R. 1002), which places a 5-year moratorium on state and local tax increases on wireless services. The measure, which passed with nearly unanimous support on a voice vote, will help to provide relief in one of the most overtaxed areas of the economy.
The wireless industry has long been the victim of discriminatory taxation. In fact, state and local taxes have skyrocketed in recent years to an average of over 16%—much higher than the average state sales tax of 7.4% on other goods and services. In some cities, wireless taxes reach over 25%. All told, wireless taxes cost consumers $21 billion annually. Today’s wireless penetration rate is nearly 103%, meaning well over 90% of the country relies on mobile devices and many Americans carry more than one.
The Wireless Tax Fairness Act is a great step forward in promoting innovation and affordability in the wireless market. Many lawmakers tout the need to improve universal access to wireless service, and the best way to do that is by reducing the tax burden. As this legislation moves forward to the Senate (S. 543), we hope that lawmakers join Sens. Ron Wyden (D-Ore.) and Olympia Snowe (R-Maine) to relieve this extra tax burden on the people that they represent with a vote in favor of the Wireless Tax Fairness Act.