Lofgren and Franks Introduce Bipartisan Wireless Tax Fairness Act
WASHINGTON, DC – Today, U.S. Reps. Zoe Lofgren (D-Calif.) and Trent Franks (R-Ariz.) introduced the Wireless Tax Fairness Act, a bipartisan, consumer-friendly bill to place a 5-year moratorium on new taxes and fees for wireless services.
On average, wireless customers pay nearly 18% in taxes and fees, largely imposed on state and municipal levels. These wireless taxes effect a growing number of consumers and fall disproportionately on younger, lower-income, and working Americans who tend to rely more exclusively on wireless devices for telephone and Internet access and therefore pay a greater percentage of their income in wireless taxes. With wireless broadband access rapidly becoming a key platform for innovation, the Wireless Tax Fairness Act will help foster greater access and investment in this key market by halting discriminatory and increasingly onerous tax treatment.
"Wireless connectivity is one of the simplest and easiest routes to the Internet, but rather than encouraging wireless growth, we've burdened it with taxes," said Lofgren. "It's time to hit the pause button on any further discriminatory taxes. This will help boost job growth and innovation, and allow customers to choose wireless services based on merit and need."
"Access to wireless networks represents a key component of millions of Americans' livelihoods, providing the efficient communications capabilities -- whether phone, broadband internet, or otherwise -- necessary to run a successful business," said Franks. "Exorbitant taxes on wireless customers are discriminatory, adding costly impediments to the success of so many American businesses and affecting low-income and senior Americans who frequently rely on wireless service as their sole means of telephone and internet access."
The nearly 18% in taxes and fees wireless customers pay today is more than twice the 7.5% average rate on goods and services. In many localities, this cumulative tax burden is even higher. For example, the wireless tax rates are as high as:
- 36% in Chicago
- 29.9% in Baltimore
- 26% in Omaha
- 22.4% in Tallahassee
- 26.9% in New York City
The Wireless Tax Fairness Act would impose a temporary, five-year freeze on new taxes levied solely on wireless services. The legislation does not reduce or remove any existing revenue from state or local governments, it simply pauses taxes and fees at the current rate. It does not prohibit additional taxes on wireless access provided that the same tax rate is applied to other goods and services.
The legislation was introduced with 49 bipartisan cosponsors. Similar legislation introduced in previous Congresses has enjoyed support from a majority of House members, and was passed by the U.S. House of Representatives in November, 2011.
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