WASHINGTON-Four national mobile-phone carriers have petitioned state and local officials in Maryland for refunds of taxes imposed on them..
The requests were delivered to the City of Baltimore and Montgomery County by T-Mobile USA Inc., Sprint PCS, Cingular Wireless L.L.C. and Verizon Wireless.
Since July 2003, according to lawyers representing cellular operators, wireless taxes have resulted in additional charges to cellular phone users totaling more than $14.8 million. The total amount paid to Baltimore by the carriers has been $2 million, with wireless operators paying $12.8 million to Montgomery County during the past 18 months.
Industry lawyers said the refund requests represent the first step in challenging the taxes. The requests must be submitted before industry can mount court challenges.
Industry argued the taxes are illegal because they apply to any wireless telecom lines that have billing addresses within the city and county without regard for whether that service was actually used within or outside those jurisdictions.
The carriers claim Montgomery County and Baltimore violated their authority by taxing activities that occur and value that exists outside city and county boundaries.
In addition, the four mobile-phone operators said the city and county exceeded their taxing powers granted to them by Maryland because the levies are sales taxes. Baltimore and Montgomery County are prohibited by Maryland law from imposing sales taxes.
“This is an issue with national implications for the wireless industry,” said Kenneth Silverberg, a lawyer at the Nixon Peabody LLP firm that represents the wireless companies. “Local taxing authorities around the country should not view wireless-phone companies as easy targets for raising revenues. They are not going to sit idly by and allow the wireless industry and its customers to unfairly be charged for all the government services provided to all citizens. Everyone should pay their fair share, whether or not they use wireless telephones. If localities seek to impose one of these narrow wireless taxes, we are going to be looking at it very carefully and, if there are grounds, we will seek to overturn it.”
In addition to arming itself with high-powered Washington lawyers, the cellular industry hopes to add the collective voice of consumers to protest taxes and regulations imposed by local, state and federal authorities.
The cellular industry has agreed to develop a consumer-based advocacy initiative to address issues, such as the Maryland taxes and new wireless regulations in California.
“We know there are millions of consumers who like their innovative wireless products and services and don’t want unnecessary laws and regulations or excessive taxes and fees to slow down their development, ” said Steve Largent, president of CTIA, a trade group representing U.S. mobile-phone operators. “We’re going to help those consumers voice their positive feelings as well as their concerns so that policy-makers and regulators know where the wireless consumer stands.”
Largent said the anti-tax/regulation campaign will kick into gear next spring.
