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Wireless Tax Fairness Act of 2013

  • Jun 13, 2013 | Gail Cole

 Keep an ear out for the Wireless Tax Fairness Act of 2013.

You've heard of the Marketplace Fairness Act of 2013, but did you know about the Wireless Tax Fairness Act, introduced earlier this week by Representatives Zoe Lofgren (D-CA) and Trent Franks (R-AZ)? The bill seeks to "place a 5-year moratorium on new taxes or fees for wireless services."

Lawmakers behind the bill point to the 17.2% in taxes and fees that wireless customers typically pay. These taxes and fees are, for the most part, raised at the state and municipal levels. According to Reps. Lofgren and Franks

"[Wireless taxes] fall disproportionately on 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."

The National Taxpayers Union* (NTU) agrees. Earlier this week, NTU Federal Affairs Manager Nan Swift sent a letter in support  of H.R. 2309 to Reps. Lofgren and Franks. She argued that states and localities have created "predatory levies on wireless phone service to pay for projects that have little to do with improving the communications network." Referencing a 2012 study by Scott Mackey of KSE Partners, LLP, she pointed out that the 17.2% tax rate typically imposed on wireless services is "far out of line with the 7.4 percent average tax rate imposed on other goods and services."

The lawmakers behind the Wireless Tax Fairness Act of 2013 have referenced the same figures, noting the tax on wireless services is even higher than 17.2% in some parts of the country: Baltimore has a rate of 26.8%, while the rate in New York City is 20.4%.

The Wireless Tax Fairness Act of 2013 would not impact existing taxes on wireless services. Rather, by freezing taxes at the current rates for five years, it would "help foster greater access and investment in this key market…."

The Wireless Tax Fairness Act is backed by 145 bipartisan cosponsors and has the support of the CTIA-The Wireless Association ®, which speaks for "the more than 300 million wireless users int he U.S." It is currently awaiting review by the House Committee on the Judiciary.

* The National Taxpayers Union is a "nonprofit, non-partisan citizen group whose members work every day for lower taxes and smaller government at all levels."

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Sales tax rates, rules, and regulations change frequently. Although we hope you'll find this information helpful, this blog is for informational purposes only and does not provide legal or tax advice.
Gail Cole
Avalara Author
Gail Cole
Gail Cole
Avalara Author Gail Cole
Gail began researching and writing about sales tax in 2012 and has been fascinated with it ever since. She has a penchant for uncovering unusual tax facts, and endeavors to make complex sales tax laws more digestible for both experts and laypeople.