The CTIA and Verizon Wireless yesterday both reiterated their support for the Cell Tax Fairness Act of 2008, which would put a 5-year freeze on any new mobile taxes being initiated by a state or local government. But local government representatives say the bill is just a way for carriers to lower their own taxes and wouldn’t save customers any money.
A hearing on the bill was held by the House Judiciary Committee’s Subcommittee on Commercial and Administrative Law, chaired by Rep. Linda Sánchez (D-CA).
Sánchez, in a prepared statement, noted the bill’s advantages and disadvantages. “Working families are being hit hard with the rising cost of gas, food, even healthcare. They need to be assured that their cell phone bills won’t be the next to spin out of control… As consumers, we want to pay lower taxes and fees on our wireless services. But we understand that state and local governments need revenue to provide the services we need and expect from them,” she said.
Opponents and supporters of the bill both repeated past arguments.
Gail Mahoney, commissioner of Jackson County, Mich., testified against the bill, on behalf of the National Association of Counties. “The true aim of this legislation is a federal preemption that reduces the level of taxes that the cell phone industry pays to state and local governments,” which would have the next effect of forcing local governments to tax elsewhere – not helping consumers any, but making the mobile carriers look good, she asserted.
Also, the wireless industry nor its customers are being held back by local taxes, as indicated by the industry’s strong growth and by the ubiquity of mobile phones today, she said.
Steve Largent, CEO and president of the CTIA which lobbies on behalf of carriers, commented after the hearing with a different perspective. “Taking a break on new discriminatory state and local wireless taxes is long overdue. American consumers deserve better than being burdened with unreasonable rates of wireless taxes and fees on their monthly bills,” he said.
“Verizon Wireless wholeheartedly endorses this legislation, and we encourage its quick adoption by the Congress,” added Steve Zipperstein, the carrier’s vice president and general counsel.
The next step in a bill’s timeline is a markup session, in which committee members consider changes to the bill based on the hearing, although no such session is currently scheduled. Sánchez spokeswoman Marsha Catron declined to say if Sánchez herself supports or opposes the bill.
