Bill Seeks To Put Five-Year Moratorium On New Cell Phone Taxes

imageU.S. lawmakers are considering passing legislation that would impose a five-year moratorium on new state and local taxes for cell phones, just in time to prohibit governments from leveraging increasingly popular wireless services — like data and internet — to be a potential revenue source in this economic downturn.

Dow Jones reports that taxes on cellular already average roughly 15.2 percent, while other services on average are only 7.1 percent, according to the bill’s sponsor Rep. Zoe Lofgren, D-Calif. Lofgren and other proponents are moving to limit the taxes because they disproportionately impact lower-income people, who rely more on their cell phones for access to the Internet. The bill would be good news to price-focused providers, like Leap, MetroPCS, Boost and Virgin Mobile USA (NYSE: VM).

The bill wouldn’t necessarily ensure that there wouldn’t be any increases in taxes on cellphone services, it just couldn’t be singled out. It would also allow any existing state and local cell-phone taxes to continue to exist. CTIA, which has been fighting this battle for years, is in favor of the bill. President and CEO Steve Largent: “It is very troubling that wireless consumers have been taxed four times more than other taxable goods and services over an almost four-year period.”

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