US House Passes Bill to Freezes Cellular Taxes for Five Years

Posted by at 3:20 pm on November 3, 2011

Today the US House of Representatives has voted in favor of legislation that places a temporary halt on increases to taxes on cellular service. The approval will prevent state and local taxes on cellphone and wireless broadband service from increasing in the near future, though the bill only freezes the tax hikes for a period of five years. Oregon Senator Ron Wyden and Main Senator Olympia Snowe will bring the same legislation to vote in the Senate

Proponents of the legislation point out that taxes for wireless mobile services have outpaced other products and services, reaching an average of 16.3 percent. Certain markets face even higher taxes, with New York City customers paying approximately 20.4 percent and Baltimore residents dishing out 26.8 percent.

“We need to encourage the development and adoption of wireless broadband, not tax it out of existence,” said California Representative Zoe Lofgren.

Opponents claim the legislation will cut off a potential source of funding for local and state governments, many of which have come to rely on the cellphone taxes, however the bill merely freezes current tax rates rather than eliminating the discrepancy with the sales tax rate.

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