The Wireless Tax Fairness Act – Taxpayers and Consumers Win!

It’s not very frequently that the Taxpayers Protection Alliance (TPA) reports on a victory, but this evening (November 1) was a banner moment for everyone that owns a cell phone.  The House of Representatives passed H.R. 1002, the Wireless Tax Fairness Act.  This bi-partisan bill, with 236 co-sponsors, freezes all new state and local taxes and fees on wireless for 5 years.  The official scoring entity of Congress, the Congressional Budget Office (CBO), scored it as no additional cost to any level of government.  A true win!

Mobile devices are becoming a popular way to purchase books, music, or just download any content via the Internet.  The Wireless Tax Fairness Act stops states and local governments from imposing multiple or discriminatory taxes on these items.

Needless to say, wireless usage has skyrocketed over the years.  There is an estimated 292 million American wireless subscriber connections.  With this spike in usage has come the temptation of all levels of government to use it as a revenue source.  In fact, 47 States and the District of Columbia are going above and beyond the ridiculous by taxing consumers for wireless above the rate they pay for other general goods and services.  According to Scott Mackey, an economist and partner at KSE Partners LLP in Montpelier, Vermont “Wireless users now face a combined federal, state, and local tax and fee burden of 16.3 percent, a rate two times higher than the average retail sales tax rate and the highest wireless rate since 2005.”  In total, the annual national consumer tax burden on wireless is $21 billion.

Wireless taxes are not victimless.  Individuals suffer.  Businesses suffer.  And, households struggling to make ends meet suffer with tax increases.  The truth behind any tax increase at the state and federal level is a function of laziness.  Instead of looking for ways to cut spending, states look for tax increase to pay for their excessive government.

The House of Representatives took an important step forward in passing the Wireless Tax Fairness Act.  This is a true win for both taxpayers and consumers.