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Pass the Cell Tax Fairness Act Now!
An Open Letter to the U.S. House of Representatives

February 24, 2010

Dear Representative:

            On behalf of the 362,000 members of the National Taxpayers Union (NTU), I urge you to cosponsor and work quickly to pass H.R. 1521, the Cell Tax Fairness Act of 2009. This legislation, introduced by Representative Zoe Lofgren (CA-16) with impressive bipartisan support, would prevent any state or local jurisdiction from imposing a new, discriminatory tax on cell phone services for the five years following the bill's enactment.

            Between 2003 and 2007, taxes on cell phone service increased four times faster than those imposed on other general goods and services. While family members are forced into paying more money, out-of-pocket, to communicate with one another, these predatory taxes are often squandered on projects that have little to do with improving the communications network.

            According to Representative Lofgren, "A typical consumer already pays 15.19 percent in federal, state, and local taxes on their cell phone bill as compared to 7.07 percent for most other taxable goods and services." To make matters worse, NTU research has shown that taxes heaped upon mobile service are among the worst of all the "hidden" levies not readily apparent to the people paying them.

            H.R. 1521 would help allow consumers to make choices based on the merits of technology, not the rate of taxation. This bill does not take away any existing revenue for state or local governments, but simply calls for a period of stabilization that would protect cell phone customers from misguided tax policy and would help to further innovation and access in the digital marketplace.

            A five-year moratorium on new discriminatory cell phone taxes is a reasonable, pro-consumer goal, one whose urgency becomes more apparent with each day that state and local governments unfairly target these services.

            H.R. 1521 is a sound piece of tax legislation that Members on both sides of the aisle should enthusiastically support. Roll call votes on the Cell Tax Fairness Act will be significantly weighted in our annual Rating of Congress.