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Bill Would Prevent Wireless Tax Increase [AUDIO]

Every year it seems more features that were once “premium” on cell phones are now standard options, but as technology continues to drive the cost of cell phones down the cost of the plans they’re attached to remains static.

Cell phone use
Flickr user: okalkavan

Much of it can be attributed to local, state, and federal taxes, however a bill going through the US Senate aims to curb any further increase to wireless bills from unfair taxing.

New Jersey ranks 29th out of the 50 states in terms of additional fees from taxes.

Scott Mackey, an economist with Vermont based KSE Partners, says the Federal Universal Service Charge can tack on as much as an extra 6% to your bill. Mackey says a lot of the money gets taken from urban areas (like New Jersey) and transferred to build up the networks of rural areas; a program that he claims has outlived its usefulness.

“We not have wireless networks that don’t cost as much to deploy as copper and fiber that can be providing some of these services in these rural areas yet we keep having this antiquated program.”

Much of that has gone into the consideration for the Wireless Tax Fairness Act, which has passed the House with bipartisan support and is now in the US Senate. The proposed bill would put a stop to additional taxes specifically on wireless voice and data plans.

The bill is co-sponsored by New Jersey Senator Bob Menendez and Mackey hopes it gets passed during the “lame duck” session. He notes the legislation wouldn’t handcuff legislators from any increases to cellular voice and data plans, but rather not allow them to tack on tariff’s that specifically target only the plans. Keeping consumer’s plans from getting much higher than they are now.

“It would not prevent states or localities from increasing broad based taxes. If there’s a sales tax that wireless pays but everyone pays it too, that’s not discriminatory.”

The bill would only cover the voice and data portion of cell phone bills. Internet bills are not subject to taxes via a federal prohibition on taxation of internet access, however the moratorium expired on 2014.

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