WASHINGTON-What to do with the often confusing tax structures of both mobile phones and the Internet collided in back-to-back hearings by the House telecom subcommittee on Thursday.
The collision occurred because Internet taxation has been met with a divided commission report and mobile-phone taxation has been met with a government/industry coalition finding common ground.
The Advisory Commission on Electronic Commerce, a congressionally chartered entity formed to determine what taxes-if any-should be imposed on the Internet, is drafting a report that contains recommendations of a majority but not the super-majority mandated by Congress.
A coalition of state and local governments and the Cellular Telecommunications Industry Association appeared before the subcommittee in support of the Wireless Telecommunications Sourcing and Privacy Act, which will base taxes charged for mobile-phone use on consumer billing addresses
There was wide support for the bill sponsored by Rep. Chip Pickering (R-Miss.), which also includes provisions protecting against wireless eavesdropping and requesting a study of the regulatory fees charged by the Federal Communications Commission.
The bill is important, lawmakers and coalition members said, because of the 55,000 taxing jurisdictions in the country, 36,000 tax mobile-phone usage.
The fact that industry and government could come together on a proposal to solve confusing mobile-phone taxation while a congressionally chartered commission designed to determine taxation policies for the Internet could not, was not lost on the subcommittee.
“Congratulations to you all … You should have been the Internet tax commission. It would have been very helpful to bring those issues to closure … It gives everyone confidence that there will be cooperation on all fronts,” said Rep. Edward Markey (D-Mass.), ranking member of the House telecom subcommittee.
The bill is expected to be marked up early next month.
Everything was not always so rosy. The hearing on the e-commerce commission’s report was contentious as members of the subcommittee debated whether the report could be accepted because it had not been adopted by super-majority. In fact, the report only garnered 11 votes instead of the 13 needed to make formal recommendations to Congress. The vote was 11 in favor of the report, one against and seven abstaining. Gov. James S. Gilmore III (R-Va.), chairman of the e-commerce commission, is scheduled to release the final report this week.
The lack of the super-majority concerned Rep. Anna Eshoo (D-Calif.), who said nothing could be delivered to the Congress without a super-majority.
The most senior member of the House of Representatives and ranking member of the Commerce Committee, Rep. John Dingell (D-Mich.), submitted a statement saying that rather than submitting a report the bulk of which must be ignored “we should continue working, as long as it takes, and in a bipartisan fashion, toward finding an answer that promotes and protects all of the substantial economic interests at stake.”
