House puts 5-year freeze on new mobile taxes with Wireless Tax Fairness Act

The United States House of Representatives approved the Wireless Tax Fairness Act on Tuesday, an initiative that prevents new local and state taxes on wireless bills for the next five years. “We need to encourage the development and adoption of wireless broadband, not tax it out of existence,” Representative Zoe Lofgren said. The average tax rate on goods and services in the United States is 7.4% but consumers with wireless contracts pay an average of 16.4% in taxes and fees, WirelessWeek said. “The exorbitant discriminatory taxes on wireless customers are not only unfair, they are counterintuitive, adding another costly impediment to the success of so many American businesses who are struggling in the midst of a prolonged recession,” Representative Trent Franks argued. Read on for more.

Representative Judy Chu from California was the sole Representative who held out on voting in support of the act. “This will deny states the flexibility to respond to economic downturns during the moratorium and therefore undermine the ability of states to pay for essential services,” Chu said.

“On behalf of the 300 million wireless customers in the U.S., CTIA applauds the Wireless Tax Fairness Act’s lead sponsors, Representatives Lofgren and Franks, who worked tirelessly to get the bill approved in the House,” the CTIA said in a statement. “Today’s vote is a crucial step toward providing wireless subscribers with some much needed relief by putting a five-year freeze on new, discriminatory taxes and fees on their monthly bills. In light of the challenging economy, we hope the U.S. Senate moves swiftly to pass the companion bill.”

[Via Phone Scoop]

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