WASHINGTON-The House of Representatives last week passed legislation by voice vote to mandate that wireless subscribers be taxed based on a single address.
The Mobile Telecommunications Sourcing Act will ensure that wireless callers “are not confronted with a thicket of taxing jurisdictions … It will simplify the process of tax collection without imposing any new taxes,” said Rep. Jerrold Nadler (D-N.Y.).
The bill is important because of the 55,000 taxing jurisdictions in the country, 36,000 of which tax mobile-phone use. These jurisdictions have developed a variety of ways to tax wireless subscribers for the calls they make. The result is an overlapping taxation system where wireless customers may be taxed several times, in several jurisdictions, for placing a single phone call.
Taxes now will be based on the billing address of the subscriber.
“Passage of this legislation means that America’s over 94 million wireless customers are one step closer to the end of today’s confusing, duplicative and costly taxing system,” said Thomas E. Wheeler, president of the Cellular Telecommunications Industry Association.
CTIA worked with the National Governors Association, the National League of Cities, the Federation of Tax Administrators, the Multistate Tax Commission and the National Conference of State Legislatures to craft and lobby for the proposal.
“We are dealing with a complex interstate taxing issue, and we are dealing with it the right way … The development of this legislation has been a model of bipartisanship and cooperation,” said Nadler.
A similar bill is awaiting action on the Senate floor.
The original version of the bill contained language to protect against wireless eavesdropping and requested a study by congressional auditors of the regulatory fees charged by the Federal Communications Commission. These provisions were stripped from the bill in a jurisdictional dispute between the House Commerce and Judiciary Committees.
