The Cell Tax Fairness Act is nothing new. Sens. Ron Wyden (D-OR) and Olympia Snowe (R-ME) introduced it in the middle of last year, though it was understandably lost amid a presidential election and a global financial meltdown. The measure is now back in the House of Representatives, sponsored by Rep. Zoe Lofgren (D-CA). If passed, the bill would prevent state and local governments to apply any new taxes on cell phone service, with a renewal vote in five years. It’s not known now whether the bill will garner any more favor this time around, but if it catches on it would be a boon for consumers. The argument in favor for the bill is that consumers pay double taxes — including state, federal, and local — on cell phones as compared to other taxable goods and services. While the latter clocks in at 7.1 percent, the average cell phone user pays 15.2 percent in taxes. Also notable: cell phone taxes have increased rapidly over the past few years, growing four times faster than other taxable goods and services between January 2003 and July 2007.
“By curtailing further increases on wireless taxes and fees, we hope to encourage additional consumer driven development in wireless technology,” said the bill’s sponsor, California Democrat, Rep. Zoe Lofgren, adding that “The Cell Tax Fairness Act does not take away any existing revenue for state or local governments, it simply calls for a period of tax stabilization.”
The above-linked article speculates that this could cause local and state governments to add a last round of taxes just before the bill’s inception, which would be bad for the consumer. Hopefully such measures would be met with enough public outcry that governments would avoid them. Still, it’s a legitimate concern, as is any further taxation on our cell phones.