Wireless Tax Fairness Act

H.R. 1002 and S. 543

Why we need the Wireless Tax Fairness Act

Consumers in 47 states and the District of Columbia now pay wireless taxes, fees and government charges that exceed the general retail sales tax rate. Wireless tax rates in many states (22 of them and D.C.) have hit double digits, with some states (5 of them) breaking the 20 percent mark in monthly taxes and fees when federal, state and local are combined.

NE

WA

NY

FL

IL

WIR E L E SS TAXE S

16%

vs.

7.4%
GO O DS & SERVIC ES

The average consumer pays 16.3 percent of their wireless bill in combined federal, state and local taxes, fees and surcharges each month. For other goods and services, the average sales tax rate is only 7.4 percent.

2007 2010

3x

The effective rate of taxation on wireless services has increased three times faster than the rate on other taxable goods and services between 2007 and 2010, resulting in billions (the annual consumer tax burden is now about $21 billion) in excessive tax costs for wireless consumers.

Some states also double-tax consumers by imposing a gross receipts (GRT) or excise tax on wireless communications in addition to the general sales tax. Because discriminatory, new state and local taxes and fees on wireless services are typically regressive and significantly increase consumers cost of service the burden often falls especially hard on fixed-income users such as seniors, minority communities, working families and small businesses. Too often, this hefty tax bite puts wireless services out of reach for far too many who have come to rely upon its value, convenience and safety as the preferred communications tool for their daily lives.

CONGRESSIONAL BUDGET OFFICE (CBO) COST ESTIMATE

July 28, 2011 Wireless Tax Fairness Act of 2011 H.R. 1002 / S. 543

As ordered reported by the House Committee on the Judiciary on July 14, 2011
ESTIMATED COST TO THE FEDERAL GOVERNMENT: (The bills) would not assign any significant new responsibilities to any federal agencies, and CBO estimates that implementing the legislation would have no significant cost to the federal government. ESTIMATE IMPACT ON STATE, LOCAL, AND TRIBAL GOVERNMENTS: (The bills) would impose an intergovernmental mandate as defined in UMRA because it would preempt the authority of state and local governments to impose new taxes, or change existing taxes, on wireless services, providers, or property. (However) the authority of state and local governments to impose or change taxes they broadly impose on services, businesses, or property would be preserved under the bill. The bill also would not preempt the authority of governments to collect revenue from taxes on wireless services that have already been enacted and enforced. CBO did not identify any state or local governments that planned to change or impose new wireless taxes in the next five years; therefore, CBO estimates that the preemption would impose no cost on state, local, or tribal governments.

The findings of the 2010 Wireless Tax Report by Scott Mackey make it clear that imposing taxes on wireless services that are more than double what general businesses pay should be considered discriminatory and excessive, and must be addressed immediately. To that end, Rep. Zoe Lofgren and I introduc[ed] the Wireless Tax Fairness Act The legislation proposes to freeze current tax structures on wireless services for 5-years, something that I believe will benefit consumers and help to galvanize technological advancement in the long run.

Representative. Trent Franks

Wireless Taxes and Fees 50 State Ranking - 2011

50 State Ranking Taxes and Fees on Wireless Service, July 2010, as Compared to General Sales Tax Rate Rank 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 State Nebraska Washington New York Florida Illinois Rhode Island Missouri Pennsylvania Kansas Texas Maryland Utah South Dakota Arizona DC Tennessee Arkansas Oklahoma North Dakota California New Mexico Kentucky Colorado Indiana South Carolina North Carolina Minnesota Mississippi New Jersey Georgia Local Wireless Rate 18.64% 17.95% 17.78% 16.57% 15.85% 14.62% 14.23% 14.08% 13.34% 12.43% 12.23% 12.16% 12.02% 11.97% 11.58% 11.58% 11.07% 10.74% 10.68% 10.67% 10.52% 10.42% 10.40% 9.84% 9.52% 9.43% 9.38% 9.08% 8.87% 8.57% Local Sales Tax Rate 7.00% 9.00% 8.25% 7.25% 9.00% 7.00% 7.23% 7.00% 8.13% 8.25% 6.00% 6.80% 5.96% 7.20% 5.75% 9.25% 8.38% 8.45% 6.00% 9.25% 7.60% 6.00% 7.56% 7.00% 7.25% 7.75% 7.71% 7.00% 7.00% 7.50% Federal Rate (USF) 5.05% 5.05% 5.05% 5.05% 5.05% 5.05% 5.05% 5.05% 5.05% 5.05% 5.05% 5.05% 5.05% 5.05% 5.05% 5.05% 5.05% 5.05% 5.05% 5.05% 5.05% 5.05% 5.05% 5.05% 5.05% 5.05% 5.05% 5.05% 5.05% 5.05% Combined Rate 23.69% 23.00% 22.83% 21.62% 20.90% 19.67% 19.28% 19.13% 18.39% 17.48% 17.28% 17.21% 17.07% 17.02% 16.63% 16.63% 16.12% 15.79% 15.73% 15.72% 15.57% 15.47% 15.45% 14.89% 14.57% 14.48% 14.43% 14.13% 13.92% 13.62%

Rank 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 51

State Vermont Wisconsin New Hampshire Ohio Wyoming Iowa Massachusetts Hawaii Alabama Michigan Maine Connecticut Alaska Virginia Louisiana Delaware West Virginia Montana Idaho Nevada Oregon

Local Wireless Rate 8.50% 8.34% 8.18% 7.95% 7.94% 7.91% 7.81% 7.75% 7.45% 7.27% 7.16% 6.96% 6.69% 6.56% 6.28% 6.25% 6.23% 6.03% 2.20% 2.08% 1.81% 9.87% 11.21%

Local Sales Tax Rate 6.50% 5.55% 0.00% 7.13% 5.50% 6.50% 6.25% 4.00% 7.25% 6.00% 5.00% 6.00% 2.50% 5.00% 9.00% 0.00% 6.00% 0.00% 6.00% 7.91% 0.00% 6.38% 7.42%

Federal Rate (USF) 5.05% 5.05% 5.05% 5.05% 5.05% 5.05% 5.05% 5.05% 5.05% 5.05% 5.05% 5.05% 5.05% 5.05% 5.05% 5.05% 5.05% 5.05% 5.05% 5.05% 5.05% 5.05% 5.05%

Combined Rate 13.55% 13.39% 13.23% 13.00% 12.99% 12.96% 12.86% 12.80% 12.50% 12.32% 12.21% 12.01% 11.74% 11.61% 11.33% 11.30% 11.28% 11.08% 7.25% 7.13% 6.86% 14.92% 16.26%

US Simple Average US Weighted Average

[For flat monthly taxes and fees, average monthly consumer bill is estimated at $48.16 per month per CTIA - The Wireless Association.] Source: Committee on State Taxation, 50-State Study and Report on Telecommunications Taxation, February 2011 by Scott Mackey, Kimbell Sherman Ellis LLP using state statutes and regulations.

Diverse Supporters Urge Congress to Act!

February 8, 2011 United States Congress RE: Support Legislation Reducing State and Local Wireless Taxation Dear Member of Congress:

For Immediate Release Contact Steve Pociask November 1, 2011 (703) 471-3954 American Consumer Institute Applauds Passage of Wireless Tax Fairness Act Encourages Senate to take swift action to protect wireless consumers

I urge you to support any reintroduction of legislation to reduce the burden of state and local wireless taxes. In the last Congress, the Cell Tax Fairness Act would have placed a mandatory five-year freeze on all new, discriminatory state and local wireless taxes. The bill received 198 cosponsors and was favorably reported out of a House Judiciary Subcommittee. This year, I recommend Congress put its full support behind a similar measure to help relieve the growing burden that wireless taxes have placed on American consumers and businesses. As state and local governments around the country continue to push discriminatory, targeted taxes on wireless service for unrelated projects or to plug budget holes, a federal solution has become imperative. A mandatory freeze on wireless taxes is a proconsumer, pro-business, anti-tax, and bipartisan solution to this growing problem.

WASHINGTON The U.S. House of Representatives today overwhelmingly approved the Wireless Tax Fairness Act of 2011 legislation that will protect consumers with a five-year ban on new state and local government-imposed wireless taxes and fees. The following quote should be attributed to Steve Pociask, president of the American Consumer Institute Center for Citizen Research: I applaud the House for moving forward with HR 1002, the Wireless Tax Fairness Act, to make sure Americas consumers have a five-year reprieve from additional excessive state and local cell phone taxes. In some states, a quarter of monthly wireless service costs are due to state and local taxes and fees. These cell phone taxes are an increasingly troubling trend that adversely affect younger and lower-income Americans. Public policies need to stop taxing what we should be encouraging. High taxes on information technologies stunts economic investment and impedes job creation, thereby hurting consumers and small businesses. The American Consumer Institute looks forward to the Senate taking up this legislation quickly, passing it, and making sure American consumers have a wireless tax reprieve for the upcoming the holiday shopping season.

American Consumer Institute Statement on House Passage of Wireless Tax Fairness Act
NOvEMBER 1, 2011

Americans for Tax Reform Today, over 290 million American excessive Letter to Congress fees wireless consumers are unfairly laden withcell phone Supporting Passage monthly taxes, surcharges and for their cell phone service. The average user today pays approximately 16% in taxes every month, while wireless taxes have of Wireless Taxover 20% in multiple states.Act skyrocketed to well Fairness
Nationally, these billion FEBRUARy 8, 2011excessive taxes andtofees cost wireless consumers over $21maintain a annually, making it more expensive run a business and more difficult to family budget. Almost 90% of Americans rely on cell phones, but discriminatory taxes

Public policies need to stop taxing what we should be encouraging. High taxes on information technologies stunts economic investment and About ACI impedes job creation, thereby hurting consumers and The American Consumer Institute Center for Citizen Research is a 501(c)(3) nonprofit educational and small businesses. The American Consumer Institute research institute founded on the belief that consumers interests are not satisfactorily represented by the wide variety of advocacy and consumer organizations that often represent small subsets of consumers and looks forward to the Senate taking up this legislation special interests; ignore distant, collateral and unintended consequences of importance to consumers; and too often mirror advocates political views rather than an empirical analysis of consumers economic quickly, passing it, and making sure American welfare. consumers have a wireless tax reprieve for the ### upcoming the holiday shopping season.

and fees make of separate local low-income families, rural affordable With hundreds wireless significantly lessowners. forand state taxes, Americans, seniors, and small business surcharges, andoffees,local and state taxes, surcharges, and fees, the time has the time has come for With hundreds separate come for to do the right thing on American consumer. to do the right thing on behalf the policymakerspolicymakersrecognize city and state borders,ofand thebehalf of Wireless today doesn't wireless consumer shouldn't consumer. support legislation provide a doesnt the Americanhave to either. I strongly Wirelesstotodaystate and local tax freeze for all wireless consumers. recognize city and state borders, and the wireless Sincerely, consumer shouldnt have to either. I strongly support legislation toNorquist Grover provide a state and local tax freeze for President all wireless consumers. Americans for Tax Reform

Thomas A. Schatz President U.S. House of Representatives Washington, D.C. 20515 Dear Representative,

November 1, 2011

You will soon vote on H.R. 1002, the Wireless Tax Fairness Act, which would place a five-year freeze on attempts by state and local governments to raise taxes on wireless services. On behalf of the more than one million members and supporters of the Council for Citizens Against Government Waste (CCAGW), I urge you to support this legislation. skyrocketed. Wireless consumers pay an average of taxes Citizens which is more than double the average 16 percent 7inpercenton their wireless bills Against Government Waste goods every month, tax rate of for other general and services the Wireless Letter mark,inwith United States.some localitiesrates in some rates well above 25 percent. the 20 to U.S. House tax subjected to states have even risen above of Representatives percent customers in H.R. 1002 would prevent all state and local governments from imposing taxes on Supporting Passage of Wireless five-year periodmobile Tax services, mobile service providers, or mobile service property, during the commencing after the date of enactment of the legislation. The ability to communicate Fairness effectively through utilizing technologies such as wireless broadband and cell efficiently and Act In recent years, state and local taxes on wireless and mobile phone services have

Digital Liberty Blog post: House Passes Freeze on Excessive Wireless Taxes
NOvEMBER 2, 2011

NOvEMBER 1, 2011

phones is an essential component to running a successful modern business, and should not be hindered by onerous tax hikes.

put an to out-of-control increases in wireless taxes. I strongly Americans With an end ever increasing number of urge you to support the Wireless Tax Fairness Act. All votes on H.R. 1002 will be among those considered in relying on2011 Congressional Ratings. CCAGWs technology, lawmakers must put an end to out-of-control increases in wireless taxes. I strongly Sincerely, urge you to support the Wireless Tax Fairness Act. All votes on H.R. 1002 will be among those considered in CCAGWs 2011 Congressional Ratings.

With an ever increasing number of Americans relying on technology, lawmakers must

The Wireless Tax Fairness Act is a great step forward in promoting innovation and affordability in the wireless market. Many lawmakers tout the need to improve universal access to wireless service, and the best way to do that is by reducing the tax burden.

1301 Pennsylvania Avenue, N.W. Suite 1075 Washington, D.C. 20004 202-467-5300

Economist Ev Ehrlich Statement on House Passage of Wireless Tax Fairness Act

NOvEMBER 1, 2011

WASHINGTON Ev Ehrlich, President of ESC Company and former Under-Secretary of Commerce under President Clinton, released the following statement in response to the House vote today on the Wireless Tax Fairness Act: Todays House passage of the Wireless Tax Fairness Act shows that good ideas can still get bipartisan support. Wireless services, including mobile broadband, are changing the way Americans work, earn, and live -- subjecting them to special and extraordinary taxes makes no sense. This is a good sign for those of us who hope that the broadband environment can still attract level-headed, bipartisan thinking. ###

National Economist Issues Statement on Passage of Wireless Act

FOR IMMEDIATE RELEASE November 1, 2011

The U.S. House of Representatives this evening will vote on the Wireless Tax Fairness Act, which would place a five-year moratorium on new taxes on mobile phones and other wireless items. The measure enjoys broad bipartisan support and is expected to pass. The following statements from tax and technology experts at The Heartland Institute a free-market think tank may be used for attribution. For more comments, refer to the contact information below. To book a Heartland guest on your program, please contact Tammy Nash at tnash@heartland.org and 312/377-4000. After regular business hours, contact Jim Lakely at jlakely@heartland.org and 312/731-9364.

There is no legitimate reason that the combined tax rate on mobile devices should be twice as high as the tax on other goods and services. Protecting taxpayers from these discriminatory taxes for the next five years will help foster growth in an industry that is on the front lines of innovation and job creation. In particular, lower-income consumers will reap the biggest benefits and will be able to NOvEMBER 1, 2011 enjoy more access to wireless devices.

Heartland Institute Statement on House Passage of Wireless Tax Fairness Act

Todays House passage of the Wireless Tax Fairness Act shows that good ideas can still get bipartisan support. Wireless services, including mobile broadband, are changing the way Americans work, earn, and live -- subjecting them to special and extraordinary taxes makes no sense. This is a good sign for those of us who hope that the broadband environment can still attract level-headed, bipartisan thinking.

There is no legitimate reason that the combined tax rate on mobile devices should be twice as high as the tax on other goods and services. Protecting taxpayers from these discriminatory taxes for the next five years will help foster growth in an industry that is on the front lines of innovation and job creation. A moratorium on wireless taxes is welcome, but a rollback wouldve been a more
John Nothdurft Director of Government Relations The Heartland Institute jnothdurft@heartland.org 312/377-4000 meaningful method of putting money back into the pockets of consumers. If the national average state and local wireless tax is twice the national average state sales tax, it would make sense to place an 8 percent or even lower cap on the amount of fees and taxes charged.

In particular, lower-income consumers will reap the biggest benefits and will be able to enjoy more access to wireless devices. Bruce Edward Walker
Managing Editor, InfoTech & Telecom News

November 1, 2011 The Honorable Mitch McConnell Senate Minority Leader 317 Russell Senate Office Building Washington, DC 20510

November 3, 2011 The Honorable Max Baucus Chairman Senate Finance Committee 511 Hart Senate Office Building Washington, DC 20510 The Honorable Orrin Hatch Ranking Member Senate Finance Committee 104 Hart Office Building Washington, DC 20510

Dear Leader McConnell: I write to inform you about an important piece of legislation that is scheduled for a vote on the House floor today and should be brought up for a vote in the Senate as soon as possible. The Wireless Tax Fairness Act of 2011 (H.R. 1002 / S. 543) will ensure that wireless consumers continue to have access to the most revolutionary technologies by prohibiting states and localities from leveling new discriminatory taxes on mobile services. I recently authored an op-ed in the Austin American-Statesman (please a copy attached) Hispanic Leadership minority communities in findUnited States. As Fund where I discussed the benefits of this bill for the you may know, around percent of LetterThese individualssixty more likelyAfrican Americans and Latinos are wireless Internet to Senator McConnellthan non-Hispanic whites, and users. are to own a cell phone

HispanicFairness ACT (H.R. 1002, S. 543) Institute RE: Wireless Tax Letter to Chairman Baucus Dear Chairman Baucus and Ranking Member Hatch, and Ranking Member Hatch (S. 543) in the Senate, and we Senator Ron Wyden and Senator Olympia Snowe have introduced

support the passage of this important legislation. The Wireless Tax Fairness Act of 2011 prohibits states or 3, governments NOvEMBERlocal 2011 from imposing any new discriminatory tax on mobile services, mobile service providers, or mobile service property (i.e., cell phones) for five years after the enactment of this Act. Similar legislation was passed by the House on November 1, with bi-partisan support.

NOvEMBER 1, 2011

tend to take greater advantage of the technological and data functions these devices provide. As an organization that promotes free enterprise, limited government, and individual liberty,

On behalf of The Board of Directors of The Hispanic Institute, IInstitutes publication, Hispanics and Broadband: legislation the In The Hispanic urge you to support this Making the most of Mobile Connected Future, because it will we documentHispanics are also more likely than Whiteswho aare benefit that Hispanics are more likely than Whites to access the Internet and e-mail on a mobile device. wireless consumers to have mobile Internet connection more home broadband connection. High taxes on wireless already keep these much neededatechnologies out of the hands of Hispanics and allaverage paying in lieu of than double the national services can Americans alike. sales tax rate for their cell phones service. Imposing The average wireless consumer service that are more This is the taxes on wireless pays over 16% in taxes on wireless services.thannearly double the taxes on other goods and services. These taxes are of course regressive on minority double what a general businessDuring this must downturn, communities that shoulder most of the economic hardship. pays economic be policy makers in the nations capitol must focus measures that alleviate economic considered discriminatoryonand should not be burdens for allowed all communities. The Wireless Tax Fairness ACT is a step in the right direction. to continue unchecked.Hispanic Institute, I urge you to support this On behalf of The Board of Directors of The
legislation because it will benefit wireless consumers who are already paying more than double the national average sales tax rate for their cell phones service. Imposing taxes on wireless

Aswe are organization thatlimits harmful taxes and benefits consumers and an proud to support legislation that promotes free enterprise, small businesses like the Wireless Tax Fairness Act. limited government, and individual liberty, we are This will go a long way proudbillyousupport to ensuring continuedthattolimitsbill to for these groups. to for your attention and respectfully urge you to bring this harmful taxes legislation access mobile services the floor for a I thank vote as soon as possible. and benefits consumers and small businesses like the Wireless Tax Fairness Act.
For Liberty,

This bill will go a long way to ensuring continued Mario Lopez accessH.to mobile services for these groups. I thank President you for your attention and respectfully urge you to bring thisMinority to the Kyl bill Leader Jon floor for a vote as soon as cc: Assistant possible.

HTTP APPLAUDS THE HOUSE ON PASSAGE OF THE WIRELESS TAX FAIRNESS ACT, CALLS FOR ACTION IN THE SENATE TO PROTECT CONSUMERS FROM REGRESSIVE WIRELESS TAXES
November 4th, 2011 (Washington, DC) The HTTP coalition applauds the House for bipartisan action in passage of legislation, which, if enacted into law, will protect consumers from hikes in state and local taxes on wireless services a growing burden on the mobile services that provide an affordable means of communication and access to information for millions of families. Latino communities rely on wireless devices more than other Americans. Hispanics are more likely than Whites to access the Internet and e-mail on a mobile device. Hispanics are also more likely than Whites to rely on a mobile Internet connection in lieu of a home broadband connection. Burdensome local taxes raise the cost of theseservices for families already struggling through tough economic times. "Excessive wireless taxes are regressive. They hurt struggling families by driving up costs, and discourage use of mobile Internet and the mobile platform at a time when we are fighting to get Latinos, and all Americans online and using the Internet to enhance their lives," said Brent Wilkes, National Executive Director, League of united Latin American Citizens (LULAC).

ITIF Welcomes House Passage of Wireless

Tax Fairness Act

Press Statement

For Immediate Release For More Information: Steve Norton (202) 626-5758 snorton@itif.org

Hispanic Technology and Telecommunications Partnership Coalition Statement on House Passage downturn. Barriers like "Latinos have been particularly hard hit by the economic excessive taxes, burdensome bureaucracy or arbitrary charges threaten to make wireless services job starting of of reach, " saidthat could assist in getting aPresident, Hispanic Federation. or Wireless Tax FairnessorAct a business unaffordable out Lillian Rodrguez Lpez,
NOvEMBER 4, wireless 2011 "Raising the cost of

Information Technology and Innovation Foundation Statement on House Passage of Wireless Tax Fairness Act
NOvEMBER 2, 2011

WASHINGTON (November 2, 2011)-ITIF President Robert Atkinson today issued the following statement welcoming House passage by voice vote of a measure that would impose a five-year ban on discriminatory taxes on wireless services and devices by state and local governments: "ITIF welcomes House passage of the Wireless Tax Fairness Act (HR 1002). This is the wrong time to slap new taxes on one of the most innovative and fastest growing segments of the economy. The expansion of wireless services and development of new devices and applications has helped create new businesses and stoked consumer demand for even more products and services. As I testified before the House Judiciary Administrative law Subcommittee in 2009, taxes on wireless services would stifle additional investment in wireless and broadband services and drive prices up for consumers in a regressive way. Whatever revenue individual state and local governments receive from these discriminatory taxes in the short run, the nation as whole will be worse off in the long run as productivity, economic activity and consumer choice is held back. We hope the Senate moves quickly to advance this legislation to President Obama's desk."

Excessive wireless taxes are regressive. They hurt struggling families by driving up costs, and HTTP calls on theSenate bill, S.543, discourage Senatorto take up and pass companionand theintroduced in the mobile upper chamber by use of mobile Internet Ron Wyden and Senator Olympia Snowe. platformwireless time whenpays over 16% in taxes onto get services. at a consumer today we are fighting wireless The average This is nearly double the Americans and services, and using on minority Latinos, that already taxes on other goods online and regressive the and allhave higher rates of unemployment, and lost more household communities wealth in the to enhance their lives. Internet recent economic downturn. We encourage Congress to pass this measure
to ease an increasing burden on services relied upon by families across the country. Mobile devices provide a connection and information access point for poor families and those already struggling economically. Adding multiple, discriminatory local taxes to these services harms the affordability that makes the mobile platform such a lifeline for Latinos and others in hard times, said Jason A. Llorenz, HTTP Executive Director.

services places barriers to those already struggling to catch up. We applaud the House for this pro-consumer and pro-Latino legislation," said Jose Marquez, President and CEO, Latinos in Information Sciences and Technology Association (LISTA).

ITIF welcomes House passage of the Wireless Tax Fairness Act (HR 1002). This is the wrong time to slap About new taxes on one of ITIF most innovative and fastest the The Information Technology and Innovation Foundation (ITIF) is a growing segments of the economy. The expansion of Washington, D.C.-based think tank at the cutting edge of designing innovation strategies and technology policies to create economic opportunities and improve quality of of new States and around wireless services and Founded in 2006, ITIF is alife in the3Uniteddevices development 501(c) nonprofit, non-partisan the world. and applications organization that documents the beneficial role businesses has helped create new technology plays in our lives and provides pragmatic ideas for improving technology-driven productivity, boosting competitiveness, and and stoked consumer through innovation. evenmeeting today's global more challenges demand for ### products and services.

Press Release

For Immediate Release

3636 16 t h Street N.W. Suite B-366 Washington, D.C. 20010 Phone: 202-332-0500 Fax: 202-332-0503 www.mmtconline.org

FOR IMMEDIATE RELEASE

The Latino Coalition (TLC) applauds the U.S. House of Representatives for passing the 'Wireless Tax Fairness Act' WASHINGTON, D.C. (November 2, 2011) - The Latino Coalition (TLC) applauds the U.S. House of Representatives for passing the 'Wireless Tax Fairness Act' earlier today. The legislation would freeze all new state and local taxes and fees on wireless for a period of five years, and our membership of Latino-owned small business would surely benefit as a result. The Hispanic population heavily relies on wireless technology to stay connected and to get ahead. According to the Pew Internet & American Life Project, more than half of Hispanics use their cell phones to access the Internet and 44% own a smart phone (a higher percentage than the rest of the general population). As it stands, the average American pays more than 16% in monthly taxes and fees on their cell phone bills, so stopping the states and localities NOvEMBERn2, t2011 fees is the right thing to do for consumers. from piling on ew axes and We applaud Representatives Zoe Lofgren (D-CA) and Trent Franks (R-AZ) for introducing this bipartisan bill and for rallying their colleagues to strongly support it in the House. Now, we encourage the U.S. Senate to do the same to help our members who rely on their cell phones to do business every day.

For Immediate Release Thursday, November 3, 2011

Contact: David Honig President and Executive Director dhonig@crosslink.net & (202) 332-7005

MMTC ENDORSES WIRELESS TAX MORATORIUM

The Minority Media and Telecommunications Council (MMTC) encourages Congress to enact a five-year moratorium on new state and local taxes on wireless services, devices and broadband access. This week, on a voice vote, the House approved the Wireless Fairness the moratorium. Companion legislation (S. 543) is pending in the Senate.Council Minority Media and Telecom Act (H.R. 1002), which contains Wireless broadband service is longer a luxury a necessity Statement onnoand an opportunityPassage affairs.a good job, state of the art House ittoisparticipate infor securing health care, a quality education, civic and Tax leading the nation wireless ofAfrican Americanscomprise the nations low-income population. Whenand smartphone usage, and they Wireless Latinos areFairnessin Act states and municipalities raise the disproportionately tax burden on the NOvEMBER mosttovulnerable Americans, the ability is more difficult, to break the trajectoryuse 3, vital services and opportunities of these citizens and the incentive to of poverty by connecting 2011 broadband for these purposes is discouraged.

Latino Coalition Statement on House Passage of Wireless Tax Fairness Act

The Hispanic population heavily relies on wireless technology to stay connected and to get ahead. According to the Pew Internet & American Life About the The Latino Coalition Project, more than half of Hispanics use their cell phones to(TLC) was founded in 1Internet of Hispanic business owners from The Latino Coalition access the 995 by a group and 44% own a across he country o r t smart tphone t(aesearch and develop policies relevant Wo Latinos. TLC rest of higher percentage than the is a non-profit nationwide organization with offices in Southern California, ashington D.C., and theGuadalajara, Mexico. TLC was established to address policy issues that daveragehe well- general population). As it stands, the irectly affect t being of Hispanics in the United States. TLC's agenda is to develop initiatives and partnerships American pays more than nhance overall business, economic and social that will foster economic equivalency and e 16% in monthly taxes and development of L fees on theiratinos. Visit: www.thelatinocoalition.com. cell phone bills, so stopping the states and localities from piling on new taxes and fees is the ### right thing to do for consumers.

Wirelessrates imposed by states andservice rival the sinlonger a with liquor and it Some of the tax broadband municipalities is no taxes associated luxury Wireless consumers pay an average of is tobacco.rate of 7.4 % on other goods and services.16.3% ingood fees, which is more than double the a necessity for securing a taxes and job, state of the art average health care,the Joint Center foreducation, and an opportunity to As documented by a quality Political & Economic Studies earlier this week, wireless broadband usage participaterates are higher among African Americans (47%) and among Hispanic Americans in American (38%). The Joint (41%) than among White civic affairs. Center also notes that wireless services taxes are a
barrier to wireless broadband adoption for low-income, low-wealth consumers with few other inexpensive broadband choices. A five-year freeze on new state and local wireless taxes will do much to promote universal broadband adoption and, thus, universal first class citizenship in the digital age. The need to clearly understand the unintended consequences of a regressive tax regime on minorities and the poor is essential for developing a more equitable tax structure on wireless services and digital goods. * * * * *

MyWireless.org Praises U.S. House of Representatives for Passing Historic, ProConsumer Wireless Tax Fairness Act of 2011

Mobile Future Statement on House Passage of Wireless Tax Fairness Act

NOvEMBER 3, 2011

WASHINGTON, D.C. The House today voted in favor of the Wireless Tax Fairness Act of 2011, prohibiting states or local governments from imposing any new discriminatory taxes on wireless services for five years after enactment. The following statement should be attributed to Jonathan Spalter, chairman of Mobile Future: We applaud Representatives Lofgren and Franks for introducing this important piece of legislation to prohibit new regressive taxes that could discourage consumer use of wireless technologies. With wireless data traffic in North America expected to grow more than 20-fold from 2010 to 2015, it is critical to foster an environment that promotes wireless usage and continued mobile innovation. We applaud the House for passing this bill today and urge the Senate to move this important legislation forward. ###

Mobile Future Statement on Wireless Tax Fairness Act of 2011

Tuesday, November 1, 2011

FOR IMMEDIATE RELEASE:

PRESS CONTACT: Brian Johnston, (202) 736-2980

WASHINGTON, D.C. National wireless consumer coalition MyWireless.org commends the U.S. House of Representatives for its unanimous approval of H.R. 1002, the bipartisan LofgrenFranks Wireless Tax Fairness Act of 2011. Passed by a voice vote and backed by 236 cosponsors, this pro-consumer legislation calls for a 5-year moratorium on all new, discriminatory state and local wireless taxes and fees. On behalf of wireless consumers shouldering a disproportionate monthly tax burden, MyWireless.org also expressed thanks to the timely leadership shown by all those Members who helped make this day possible original sponsors Rep. Zoe Lofgren (D-CA) and Rep. Trent Franks (R-AZ); Judiciary Committee Chairman Lamar Smith (R-TX) and Ranking Member Steve Cohen (D-TN); Speaker of the House John Boehner (R-OH) and Majority Leader Eric Cantor (RVA); and House Minority Leader Nancy Pelosi (D-CA) and Minority Whip Steny Hoyer (D-MD).

MyWireless Statement on House Passage of Wireless Tax Fairness Act

step up for consumers and deliver Wireless Tax Fairness.

Brian Johnston, Director of Advocacy for MyWireless.org, said, This legislation is a fantastic example of lawmakers from both parties working together to address increasingly unfair efforts by state and local governments to balance their books on the backs of wireless consumers. On average, wireless consumers pay well more than their fair share of taxes and fees, and now the U.S. House has taken action to help them. Johnston continued, We particularly want to thank Representatives Lofgren and Franks for their tireless work, as well as all of the bills co-sponsors for defending wireless users across this

country from more unfair, new NOvEMBER 1, 2011 state and local wireless taxation. Now its time for the Senate to

We applaud Representatives Lofgren and Franks for introducing this important piece of legislation to prohibit new regressive taxes that could discourage consumer use of wireless technologies. With wireless data traffic in North America expected to grow more than 20-fold from 2010 to 2015, it is critical to foster an environment that promotes wireless usage and continued mobile innovation. We applaud the House for passing this bill today and urge the Senate to move this important legislation forward.

A bipartisan Senate companion bill, 543, We particularly the Senate S.to thanksince March 10 Taxthis year. Act, has wantFinancethe Wyden-Snowe Wireless of Fairness Both Representatives awaited consideration by Committee proposals address the excessive level of wireless taxes and fees on todays wireless user. On Lofgren and Franksconsumertheir more than 16% on every monthly bill in well average, the American wireless for now pays tireless work, as combined government taxes and fees more than double the average sales tax paid on other as all generalthe and services.co-sponsors for Columbia charge combined of goods bills In fact, 47 states and the District of defending wireless monthly wireless tax rates in excess of their sales tax rate, and the national consumer tax burden annually has risen to $21 billion. Because discriminatory, new state and local taxes and fees on userswireless services are typically regressive and from more unfair, service across this country significantly increase consumers cost of new hard on state the burdenlocal especiallyand small fixed-income users suchNow its time for the and often falls wireless taxation. as seniors, minority communities, working families businesses. 2011 MyWireless.org up for revealed 67% of consumers support a national Senate to step state andpollingconsumers andsaid5-year freeze from deliver Wireless Congress on all new local wireless taxes and fees, while 85% wireless should be taxed at the same, Tax Fairness.or lower, rate as other general goods and services.
th

MyWireless.org is a nonpartisan non-profit national advocacy organization, made up of wireless consumers, businesses and community leaders from around the country, supporting reasonable pro-consumer and pro-taxpayer wireless policies.

NCL statement in support of the Wireless Tax Fairness Act

National Black Chamber of Commerce 1350 Connecticut Avenue NW Suite 405, Washington DC 20036 202-466-6888 202-466-4918fax www.nationalbcc.org info@nationalbcc.org

http://www.nclnet.org/newsroom/press-releases/583-ncl-statement-in-support-of-the-wirelesstax-fairness-act/ National Consumers League November 4, 2011 Contact: NCL Communications, (202) 835-3323, media@nclnet.org Washington, DC-Sally Greenberg, Executive Director of the National Consumers League, issued this statement in support of the Wireless Tax Fairness Act HR 1002, which will be voted on by the US House of Representatives this evening. The National Consumers League supports HR 1002, the Wireless Tax Fairness Action of 2011, because it will slow the exploding number of taxes imposed on consumers and users of wireless phones and other services. Consumers in 46 states now pay wireless taxes, fees, and government charges that exceed the retail sales tax rate.

November 7, 2011 Honorable Max Baucus Chair, Senate Finance Committee 219 Dirksen Senate Office Building Washington, DC 20510

National Black Chamber of Commerce Letter to Chairman Baucus Re: Taxation on Wireless and Ranking Member Hatch Phone Calls
Dear Chair and Ranking Member: NOvEMBER 7, 2011

Honorable Orrin Hatch Ranking Member, Senate Finance Committee 219 Dirksen Senate Office Building Washington, DC 20510

National Consumers League For millions of Americans, Statement who cellHousereplaced landlines inand many of theseservices. The on phones have Passageproviding phone customers millions of consumers receive a cell phone bill each monthare middle and lower middle income Americans- with taxes imposed that they dont understand ofinWirelessreceipts taxFairnessofAct tax are paying taxes that add some states a gross Tax is imposed on top a sales
NOvEMBERand local governments will continue treat consumers who use wireless devices end in sight; state 4, 2011
significantly to their overall bill. Unfortunately, without this legislation, there appears to be no as a cash cow for local projects.

Despite Act. This will help increase adoption of wireless services and technologies Tax Fairness these great opportunities that mobile among our community and the greater public. technologies and services provide, they are being Part of our mission excessive tax rates. American the average hindered by at the NBCC is to encourage AfricanWhile communities through entrepreneurship and capitalistic activity. The 21st century ushered in a new type of tax rate is around 7%, wireless services are now enable business. E-commerce dominates a part of the marketplace and smartphones taxed more interaction and commercial opportunities than ever before. around 16%. This rate discrepancy is harmful to Despite these great opportunities that consumers.excessive tax rates.mobile technologiestaxdepend on wireless Many minoritythe average andrate is around 7%, they are groups services provide, their being hindered by While services are taxed around access discrepancy is harmful to consumers. smartphones to16%. This ratethe Internet. Such a steep Many minority groups depend on their smartphones to access the Internet. Such a steep tax rate discourages use and makes it difficult for lower income families to afford the tax rate discourages use and makes it difficult for Internet and other lowersuch crucialmobile services. In orderafford the Internet and other income families to to encourage interaction in todays digital world, provisions must be affordable. mobile services. In order to encourage interaction Wireless devices, applications and the platform that enables it all to happen are often key incomponents in running a business in todays world. Because theprovisions todays digital world, such crucial National Black Chamber must be affordable.

The National Black Chamber of Commerce strongly supports the passage of the Wireless

The National Consumers Leagueraise revenues to pay for essential supports HR 1002, The NCL understands that state and local governments need to services schools and hospitals, roads and infrastructure -and the right fire and ambulance, Fairness Action ofthe passage of taxwe supportare Wireless Taxdemocratic process, which includes 2011, because it their to do so through a laws that supported by the citizens. The ever-increasing taxes imposed on consumers who use wireless will slow the exploding number of taxes imposed on services are the wrong approach, however, and have reached unacceptable levels. This bills consumers and users of wireless phones consumers and moratorium will give state and local governments the opportunity to join with and other others in an effort to reform communications taxes, an effort that is long overdue." services. Consumers in 46 states now pay wireless ### taxes, fees, and government charges that exceed the About the National Consumers League retail sales tax rate.
The National Consumers League, founded in 1899, is America's pioneer consumer organization. Our mission is to protect and promote social and economic justice for consumers and workers in the United States and abroad. For more information, visit www.nclnet.org.

National Organization Of

Executive Board: National Vice President Sen. Arthenia Joyner (FL) First Vice President Rep. Karen Yarborough (IL) Secretary Rep. Sharon Beasley Teague (GA) Corresponding Secretary Rep. Karen Camper (TN) Treasurer Rep. Mia Jones (FL)

Hon. Sharon Weston Broome (LA) National President

FOR IMMEDIATE RELEASE Comprehensive Reform of Wireless Taxation Needed Now By Sharon Weston Broome, NOBEL Women President Regressive taxes threaten to undermine the advancements that minorities and women have made over the past several decades. There is still much more progress that needs to be done, and in our quest we must analyze and eliminate structures in place that threaten to stifle and retard our growth.

National Hispanic Caucus of State Legislators Letter to Chairman Baucus and Ranking Member Hatch
NOvEMBER 29, 2011

National Organization of Black Elected Legislative (NOBEL) Women Statement on House Passage of Wireless Tax Fairness Act
Financial Secretary Rep. Angela Williams (CO) Chaplain Rep. Earline Parmon (NC) Parliamentarian Rep. Laura Hall (AL) Historian Honorable Diana Bajoie (LA) Immediate Past President Honorable Margaret Carter Regional Chairpersons:

The Joint Center for Political and Economic Studies released a paper this week, The Social Cost of Wireless Taxation: Wireless Taxation and its Consequences for Minorities and the Poor, that implored local and state governments to comprehensively reform taxes against wireless services, digital goods, and digital services. Dr. Nicole Turner Lee, and Joseph Miller, authors of the paper shared recent data on minority mobile broadband use and outlines our need to clearly understand the unintended consequences of a regressive tax regime on minorities and the poor is essential for developing a more equitable tax structure on wireless services and goods.

NOvEMBER 1, 2011
National Regional Coordinator Rep. Barbara Ballard (KS) Region 1 Rep. Meshea Poore (WV)

NHCSL strongly endorses S. 543, the Wireless Tax Fairness Act introduced by Sen. Ron Wyden (D-OR) and Sen. Olympia Snowe (R-ME) that will irrefutably increase economic innovation and digital literacy of our states.

Lee and also Regressive taxesMillerwouldhighlighted thedisproportionate harmsunder consideration in threaten totwo tax bills currently to minorities and the Congress that help prevent undermine the poor. The Wireless Tax Fairness Acts of 2011 (H.R. 1002 and S. 543) would advancements that moratorium on discriminatory taxes and fees. The Digital Goods made put a 5-year minorities and women have and Services Tax Fairness Acts of 2011 (H.R. 1860 and S. 971) would eliminate additional taxes on the sale and purchase of goods electronically. The successful over the past severalofdecades. There we experience the most is still much passage of both these bills would help consumers as difficult of economic times our more progress that needsin tonations recent history. and in our be done, We at NOBLE Women recognize that low income consumers, who are quest we must analyze and by African Americans and Latinos are among the in disproportionately represented eliminate structures highest users of mobile devices. place that threateneducation, healthcare,These devices serve as a tool to enhance minorities to stifle and retard our growth. community engagement, family life and
Region 2 Rep. Adrienne Jones (MD) Region 3 Sen. Mattie Hunter (IL) Region 4 Sen. Jackie Winters (OR) National Executive Director Hon. Gloria Travis Tanner, CO (Retired)

economic opportunities; however, the taxes imposed on these devices and their applications are regressive in nature and a barrier to improving our most vulnerable citizens overall quality of life. We urge our colleagues to look beyond the benefit of imposing outdated regressive tax structures to bolster revenues for state governments and consider the social impact upon the communities we serve.

P.O. Box 7217 Denver, Colorado 80207-1217

National Taxpayers Union Statement on House Passage of Wireless Tax Fairness Act
NOvEMBER 3, 2011

Rainbow PUSH Letter to Chairman Baucus and Ranking Member Hatch

NOvEMBER 1, 2011

When it comes to emerging technologies like smartphones, governments have often adopted nottoo-smart tax policies. The Wireless Tax Fairness Act wisely puts the brakes on this burdensome and economically unproductive habit.

We write in support of Senate bill S. 543 The Wireless Tax Fairness Act of 2011, which recently passed the House (H.R. 1002) with overwhelming support and urge you to take immediate action in the Senate Finance Committee.

March 15, 2011 The Honorable Ron Wyden United States Senate 223 Dirksen Senate Office Building Washington, D.C. 20510-3703 Electronically Transmitted Dear Senator Wyden:

SER-Jobs Letter to Chairman Baucus and Ranking Member Hatch

NOvEMBER 2, 2011

Small Business Entrepreneurship Council As you know, wireless mobile devices and services are used throughout our economy today, including by to Senator Ron Wyden Letterentrepreneurs, small businesses and their employees. For many businesses, this has become a vital means for communicating and accessing the Internet.
MARCH 15, 2011 governments have turned to wireless services and devices as Unfortunately, state and local
implications. These taxes each well beyond the and taxation applied are Wireless mobile devices levels of services to other goods and services. used throughout our economy today, including In a report published last month in State Tax Notes, Scott Mackey, an economist and partner at by entrepreneurs, small businesses and their a KSE Partners LLP, compared and ranked wireless tax burdens among the states, including focus on the disparity between state and employees.states andmany local taxes and fees on wireless service and general sales tax rates. For the 50 For District ofbusinesses, this has become Columbia, the average differential was 3.49%. Of course, the means for was particularly high in some states, with Nebraska having the highest a vital differential followedcommunicatingFlorida ataccessing and 9.32%. differential at 11.64%, by New York at 9.53%, and the Internet. Unfortunately, state and local Put another way, the average state-local wireless tax rate was 55% higher than the average governments have turned to wireless services and general sales tax rate. devices as sources of increased revenue,businesses,little These high taxes on wireless services raise costs for entrepreneurs and small with and can discourage investment in infrastructure, consideration wirelessthe industry. with the negative consequences felt by given to the economic and business entrepreneurial firms throughout implications. These taxes each well beyond goods and the levels By prohibiting the states from imposing any new discriminatory taxes on wireless services for five years, your proposed other goods and services. of taxation applied tolegislation would bring about some much-needed certainty by assuring that the wireless tax burden in the states will not get any worse. sources of increased revenue, with little consideration given to the economic and business

The Small Business & Entrepreneurship Council (SBE Council) and its members across the nation appreciate and support your proposed Wireless Tax Fairness Act of 2011.

As more people rely on wireless services to access the Internet its imperative that all barriers to access wireless services be lowered. In these troubled economic times, Congress should be searching for ways to alleviate the economic hardships for consumers and this legislation does just that.

EXECUTIVE COMMITTEE Nina Vaca Humrichouse Chairman of the Board Jeanette Hernandez Prenger Vice Chair Gabriel Pascual Secretary Mariano Legaz Finance Chair Javier Palomarez President & CEO BOARD OF DIRECTORS Region I

Hon. Max Baucus Chair, Senate Committee on Finance 511 Hart Senate Office Building Washington, DC 20510 Hon. Orrin Hatch Ranking Member, Senate Committee on Finance 104 Hart Senate Office Building 20510 RE: Wireless Tax Fairness ACT (H.R. 1002, S. 543) Dear Chairman Baucus and Ranking Member Hatch, On November 1st the House of Representatives passed the Wireless Tax Fairness Act (HR

November 2, 2011

Taxpayers Protection Alliance Blog post: The Wireless Tax Fairness Act - Taxpayers and Consumers Win!
NOvEMBER 1, 2011

1002) with unanimous consent. The US Commerce U.S. Hispanic and strongly urges you and ofHispanic ChamberSenate to act in is encouraged by Chamber your colleagues in the of Commerce similar fashion. this vote Letter to Chairman Baucus and local governments from raising taxes on This much needed legislation will prevent state wireless services for a five year timeframe. Wireless services are currently taxed, on average at a of 16%, almost double the rate on other goods is significant and RankingrateMember Hatch especiallyand services. This area struggling to economic burden for consumers and business, when businesses
Martha Montoya * David Lizarraga Mariano Legaz Region II Don Salazar * Dr. Gilbert Garbiso Maria Sastre Region III

NOvEMBER 2,impact minority consumers. 2011

Marc A. Rodriguez * Jeanette Hernandez Prenger Nina Vaca Humrichouse Rolando Pablos Region IV David Gomez * Juventino Cano Raymond Arroyo Region V

grow and create jobs. I find it especially troubling that these taxes disproportionately

Wireless taxes are not victimless. Individuals suffer. Businesses suffer. And, households struggling to make ends meet suffer with tax increases. The truth behind any tax increase at the state and federal level is a function of laziness. Instead of looking for ways to cut spending, states look for tax increase to pay for their excessive government. The House of Representatives took an important step forward in passing the Wireless Tax Fairness Act. This is a true win for both taxpayers and consumers.

The US Hispanic Chamber of Commerces mission is to the This much needed legislation willcountry. strengthen and advance and economic interest for Hispanic firms across the prevent state through As small businesses work this economic downturn, its vital that policy makers in Washington remove regressive tax local governmentsallow small businesses to focustaxesand job wireless Tax burdens and from raising on growth on creation. The Wireless Fairness Act does just that by providing much needed certainty for businesses and services for a five year timeframe. Wireless services consumers. are currentlyAgain, I strongly onyou to quickly move at muchrate legislation through committee taxed, urge average this a needed of 16%, and to a floor vote. This legislation has received bipartisan support and will help small businesses rate on almost double theacross the country. other goods and services. Sincerely, This is a significant economic burden for consumers and business, especially when businesses are struggling to grow and create jobs. I find it especially Javier Palomarez President & CEO United States Hispanic Chamber of Commerce troubling that these taxes disproportionately impact minority consumers.
Elizabeth C. Berman * Tony Jimenez Jose Nio Ruben Taborda Region VI Ignacio R. Veloz* Gabriel E. Pascual Elliott Rivera Frank Rodriguez * Denotes Regional Chair 1424 K Street NW - Suite 401 - Washington, DC 20005 - Telephone (202) 842-1212 - Fax (202) 842-3221 www.ushcc.com

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House to Vote on Freezing Wireless Tax Rates

6:25 PM OCTOBER 31, 2011

Tomorrow, the House of Representatives is scheduled to vote on H.R. 1002, the Wireless Tax Fairness Act of 2011. H.R. 1002 would put a five-year moratorium on the taxes and fees charged to wireless consumers.

U.S. Pan Asian American Chamber of Commerce Letter to Chairman Baucus and Ranking Member Hatch
NOvEMBER 8, 2011

According to the findings, of the Cellular Telecommunications Industry Association (CTIA), the average wireless consumer is charged more than 16% in taxes and fees while other taxable goods and services are only 7.4%. Additionally, 47 states along with the District of Columbia are charging wireless consumers more than other taxable goods and services. Five states, including Nebraska, Washington, New York, Florida and Illinois, charge more than 20%. As a result, more than 140 Senators and Representatives have co-sponsored the Wireless Tax Fairness OCTOBER 31, 2011 Act of 2011. This bipartisan legislation would put a five-year freeze on these taxes and fees. The freeze would allow wireless consumers some much needed relief during these challenging conditions and give time for an examination into the discrepancy of wireless tax rates as compared to other goods and services. Moreover, the freeze would not take away any existing revenue from state and local governments, but would give them time to reform their wireless tax policies.

Women Impacting Public Policy Public Policy Statement Supporting Wireless Tax Fairness Act

We are encouraged by the action of the House of Representatives to support small businesses and consumers, and we look forward to your leadership in the Senate on this important issue.

This bipartisan legislation would put a five-year freeze on these taxes and fees. The freeze would allow wireless consumers some much needed relief If you are in favor of this legislation, please make your voice heard by contacting your Representatives and Senators. With the House voting tomorrow, be sure to voice your and give bill to during these challenging conditions support for this time Representative of your Congressional district. Write your elected officials here. for an examination into the discrepancy of wireless tax rates as compared to other goods and services. Moreover, the freeze would not take away any existing revenue from state and local governments, but would give them time to reform their wireless tax policies.

11

Joint Center Study

While regressive state and local wireless taxation structures may appear to generate revenues to provide needed services, these taxes also put mobile opportunities farther out of reach for those consumers who would most benefit from wireless broadband. In the end comprehensive and equitable tax policies are absolutely critical for creating a mobile broadband environment that is more conductive to improving conditions in low-income properties.
Such regressive taxation schemes also create a broadband adoption barrier for low-income individuals that have no other reliable way to go online. The higher total cost of service created by these taxes may cause many low-income consumers to either forego purchasing a mobile device and subscribing to a mobile service plan, or cancel their service upon discovering the true cost of maintaining their service.
The Social Cost of Wireless Taxation: Wireless Taxation and its Consequences for Minorities and the Poor By Nicol E. Turner-Lee and Joseph S. Miller October 31, 2011 Continual increases in state and local taxes of mobile service, digital goods, and digital services harm the ability of low-income communities to realize the full benefits of mobile broadband and create deeply troubling consequences for minorities and the poor. Understandably, the enormous growth of the mobile broadband and applications markets makes the consumer costs of wireless service, digital goods, and digital services tempting potential tax bases for struggling state and local governments. However, more tax increases on mobile service and the purchase of digital goods and services would perpetuate a regressive tax regime. Left unchecked, this tax structure will continue to harm low-income consumers who stand to gain the most from the potential of wireless broadband to lower their cost of living while improving their prospects in healthcare, employment, and other areas. EXECUTIVE SUMMARY:

While regressive state and local wireless taxation structures may appear to generate revenues to provide needed services, these taxes also put mobile opportunities farther out of reach for those consumers who would most benefit from wireless broadband. In the end, comprehensive and equitable tax policies are absolutely critical for creating a mobile broadband environment that is more conducive to improving conditions in low-income communities.

Recent data shows that people of color and low-income individuals are the most avid users of mobile devices. These consumers are therefore in a position to benefit from the lower prices offered via the Internet. Unfortunately, they are also in a position to be disadvantaged by higher taxes on mobile services, digital goods, and digital services. Moreover, raising taxes on wireless services, digital goods, and digital services could potentially thwart behaviors policymakers and others seek to encourage, such as increased broadband adoption rates among minorities and the poor.

This paper presents an argument for why state and local governments should opt for comprehensive reform of taxes against wireless services, digital goods, and digital services and shares recent data on minority mobile broadband use. In the end, the need to clearly understand the unintended consequences of a regressive tax regime on minorities and the poor is essential for developing a more equitable tax structure on wireless services and digital goods. While African-Americans and Latinos are leading the nation in wireless and smartphone usage, they disproportionately comprise the nations low-income population. When states raise the tax burden on the most vulnerable Americans, the ability of these citizens to break the trajectory of poverty by connecting to vital services and opportunities is more difficult, and the incentive to use broadband for these purposes is diminished.

Under consideration in the U.S. Congress are two billsthe Wireless Tax Fairness Act of 2011 (H.R. 1002 and S. 543) (WTFA) and the Digital Goods and Services Tax Fairness Act of 2011 (H.R. 1860 and S. 971) (DGSTFA), which would help prevent disproportionate harms to minorities and the poor. The WTFA would impose a five year moratorium on new discriminatory (i.e. higher) wireless service taxes, as compared to state and local sales taxes on goods and services purchased offline. The DGSTFA would prohibit state and local governments from imposing multiple or discriminatory taxes on digital goods and digital services, as compared to state and local taxes on tangible goods and services purchased offline. These bills would give state and local governments the opportunity to update their tax laws and, most importantly, encourage consumers to make full use of mobile broadband during these difficult economic times.

The Joint Center for Political and Economic Studies is one of the nations leading research and public policy institutions and the only one whose work focuses primarily on issues of particular concern to African Americans and other people of color. To learn more, please visit www.jointcenter.org. Founded in 2008 and fully launched last year, the Media and Technology Institute (MTI) focuses on how the media industry and emerging communications technologies can become avenues of advancement for people of color. MTI research is focused on technologies related to new media; trends of digital convergence and the implications across various innovation sectors (e.g., energy, health care and open government); the impact of existing and future policies and regulations for the telecommunications and media industries; and, broader implications of media trends, including private equity ownership, participation, access and coverage of minorities. The Media and Technology Institute was the first to publish empirical research on minority Internet profiles that has been widely cited and quoted by government, industry, and advocacy organizations.

ABOUT THE JOINT CENTER FOR POLITICAL AND ECONOMIC STUDIES

Joint Center The Social Cost of Wireless Taxation: Wireless Taxation and its Consequences for Minorities and the Poor
OCTOBER 31, 2011

12

State Legislators Support End to Excessive, Discriminatory Taxes on Wireless Services.

Telecommunication, Science & Technology
Resolution TST-10-28

Telecommunication, Science & Technology

Resolution TST-10-28

PROMOTING FAIRNESS IN THE TAXATION OF WIRELESS SERVICE

WHEREAS, the National Black Caucus of State Legislators (NBCSL) recognizes the integral role that wireless communications services play in our society today, not only for voice communications but as a platform for broadband Internet access; and WHEREAS, the NBCSL believes that it is important to ensure that all communities have access to wireless communications services; and WHEREAS, the Pew Internet & American Life Project study published in March 2008 found that mobile access builds on the cell phone, a device that is easier to use and more affordable than a computer and is a key platform for on the go information access, and that cell phone users are more likely to be found in groups that have generally lagged in Internet adoption, such as senior citizens, blacks and Latinos; and WHEREAS, the Pew study also showed that 56 percent of English-speaking Latinos and 50 percent of African Americans with cell phones, on a typical day do at least one of 10 non-voice data applications such as taking pictures, accessing the Internet for news, playing music, or text messaging, as compared with 38 percent of Caucasians; and WHEREAS, a study on the Excessive Taxes and Fees on Wireless Service published in State Tax Notes in February 2008 cites the national average rate of taxes and fees on wireless service as 15.19 percent as compared to a 7.07 percent average rate for general sales taxes; and WHEREAS, the same study concludes that state and local taxes on wireless increased at a rate four times faster than the retail sales tax increase from the period 2003 to 2007; and WHEREAS, an economic study by Ingraham and Sidak found that each additional $1.00 of tax on wireless service is estimated to decrease wireless consumption overall by $1.23 to $1.29; and WHEREAS, an economic study by Austan Goolsbee found that each additional $1.00 of tax on wireless service suppresses use of wireless data, including broadband Internet access, by an even greater amount , on average about $2.75; and WHEREAS, the NBCSL recognizes that excessive and discriminatory taxes and fees on wireless communications services can have a disproportionate impact on some constituents; and WHEREAS, H.R. 1521, the Cell Tax Fairness Act of 2009, does not repeal existing state and local taxes but does preclude states from targeting wireless consumers for additional excess taxes and therefore keeps broadband access attainable at todays levels; and NOW, THEREFORE BE IT RESOLVED, that the NBCSL supports the federal legislation H.R. 1521, The Cell Tax Fairness Act of 2009, and urges Congress to pass it; and BE IT FURTHER RESOLVED that the members of the NBCSL will promote studies in their respective states that evaluate the tax and fee structure on wireless consumers and will work to ensure the fair taxation of wireless
Telecommunication, Science & Technology
n

service so as to preserve this gateway to broadband access for seniors, Latinos, African-Americans, and all constituents in our states; and BE IT FURTHER RESOLVED, that the members of the NBCSL should evaluate their wireless tax structures in their respective states to insure that the economically disadvantaged who often use these services for Internet access are not discriminated against through the assessment of excessive taxes and fees; and NOW, BE IT FINALLY RESOLVED, that the NBCSL send a copy of this resolution to the President of the United States, members of Congress, members of the Federal Communications Commission, and State Legislatures and Regulatory agencies. SPONSOR(S): Representative Joe Gibbons (FL) Committee of Jurisdiction: Telecommunications, Science and Technology Policy Committee Certified by Committee Chair: Senator Arthenia Joyner (FL) Ratified in Plenary Session: Ratification Date is December 4, 2009 Ratification is certified by: Representative Calvin Smyre (GA), President

RESOLUTION TST-10-8

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RESOLUTION TST-10-8

Telecommunication, Science & Technology

National Black Caucus of State Legislators Resolution Supporting Fairness in Taxation of Wireless Services

13

National Hispanic Caucus of State Legislators Resolution Supporting Fairness in Taxation of Wireless Services

14

Supporters in the News

15

Drop Taxes, Not Calls

Progressive Policy Institute Diana Carew September 30, 2011

http://progressivepolicy.org/drop-taxes-not-calls

Have you checked your wireless bill lately? Youll see a hefty set of extra taxes on mobile servicetaxes that are not imposed on any other good or service. These excise taxes represent a toll that state and local governments impose on their population of phone users. It is very tempting, at this time of tight budgets, to keep raising and raising the excise tax on wireless. After all, no one really wants to give up using their iPhone. It is time to remove that temptation. Congress is finally considering a bill that makes good economic and social sense the Wireless Tax Fairness Act (WTFA). The WTFA will prohibit state and local governments from imposing any new discriminatory tax on or with respect to mobile services, mobile service providers, or mobile service property for five years from the date of its enactment. Currently, wireless tax rates average 16.3 percent nationally, two times the national sales tax rate, according to Scott Mackey, an economist who works on wireless tax policy. These taxes are paid by us, 300 million everyday consumers, and each of us pays an average $7.84 a month in wireless taxes, fees, and government surcharges. Wireless taxes are a perfect example of how excise taxes can lead to distortions in the market, hurting consumers. In fact, wireless taxes are more distortionary than other taxes, because of how narrow they are in scope, explicitly targeting wireless services (and therefore explicitly targeting the people who rely on wireless services). Further, demand for wireless services have been found to be rather sensitive to price, causing consumers to drop service as wireless taxes creep ever higher. This means that as taxes on wireless services increase, people will consume less less of a service integral to everyday activities. Worse, the market distortion caused by wireless taxes is particularly hard on poor and middleincome families. Studies by the Pew Foundation show wireless taxes are regressive in that they negatively affect poor and middle-income families more than the wealthy, as poorer families rely more heavily on wireless services for internet and phone access. So, not only do wireless taxes impose distortions on the entire population of wireless users, but they more negatively affect the people who struggle the most to pay for it. Wireless taxes, unlike other sin taxes on alcohol and cigarettes, are simply a means for states and local governments to collect money for general funds with no other intended purpose. In other words, states and local governments are not imposing wireless taxes as a way to encourage less wireless use. Yet that is exactly what wireless taxes do. Dissenters say states and local governments wont be able to pay for basic public goods and services if the WFTA goes into effect. They argue states need all the money they can get in these

16

Texans burdened by high wireless taxes

Austin American Statesman Mario Lopez October 21, 2011

http://m.statesman.com/statesman/db_43077/contentdetail.htm?contentguid=QjF3es6l

The nation's attention has recently been riveted on the congressional debate over how to reign in years of out-of-control spending by Washington politicians that has resulted in a sky-high budget deficit. Though the recent debt-ceiling compromise was accomplished without levying more jobkilling taxes, for several years, a key job-producing domestic industry has been quietly bombarded with a steady barrage of tax increases, robbing consumers and hindering economic growth. Many Texans might not realize that a significant portion of their monthly wireless costs consist of various kinds of taxes and fees. A recent study by national tax policy expert Scott Mackey reveals that for the average wireless customer, federal, state and local taxes, plus fees and surcharges, make up about 16 percent of the total monthly bill. In Texas, consumers pay more than 17 percent in wireless taxes, the 10th highest in the nation. When you consider the average sales tax burden on other goods and services is barely above 7 percent, it becomes obvious that wireless customers are being overcharged. Some states even double-dip into consumers' pocketbooks by imposing sales taxes on top of other excise or gross receipts taxes. The effective tax rate on wireless services increased three times faster than the general sales tax rate between 2007 and 2010. This represents a huge drain on our economy and unfairness to all wireless consumers. Because they are avid users of handheld and other wireless devices, minority customers and minority-owned small businesses wind up paying some of the heaviest bills. Almost two-thirds of African Americans and Latinos are wireless Internet users. They are more likely to own a cell phone than non-Hispanic whites, and tend to take greater advantage of the technological and data functions these devices provide. Wireless technology helps Texas' large entrepreneurial Latino population bridge the digital divide that makes it more difficult for minorities to achieve economic success. Wireless services make it possible for small and minority-owned companies in Texas establish themselves online, grow their businesses and compete in markets around the globe. Data clearly show that Internet access leads to new jobs, new business opportunities and new education possibilities. And in these times of economic insecurity, broadband expansion is one bright spot that would provide a much-needed boost to small business and job growth in Texas communities. Small businesses in the Rio Grande Valley should have just as much access and opportunity as their counterparts in Austin, Houston and Dallas.

17

Blacks Make the Cell Phone Business

Black Voices News Harry Alford October 27, 2011

http://www.blackvoicenews.com/commentary/more-commentary/46982-blacks-make-the-cellphone-business.html

(NNPA) Major wireless (cell phone) corporations should be conscious of the fact that much of their business and future depends heavily on the African American community. Fortunately, Verizon and AT&T understand this and are heavily involved in our community. T-Mobile will become much better, if the merger with AT&T takes place (AT&T guarantees this). The others should take serious notice with the latest studies now being released. Wireless communication is an invaluable and increasingly necessary way to do business and stay connected with friends, family, and our local communities. While it seems just about everyone has a cell phone or smart phone these days, wireless use is especially prevalent within the Black community. According to Nielsen, African Americans talk and text on our cell phones more than any other race or ethnicity in the country on average using 1,300 voice minutes and sending about 780 SMS (text) messages each month. Were also increasingly leading the way in how the technology is used. The Pew Research Centers Internet & American Life Project was released this past August, and it shows African Americans use wireless more than any other ethnic group to access the Internet, send or receive email, play games, access social networking sites, post photos or videos online, and to bank online. We are also among the most likely to use our cell phones to download an app, play music and participate in video calls and chats with our wireless device. African Americans of all ages are clearly relying on wireless technology to improve their professional and personal lives, which leads me to an extremely perplexing question: If Black communities are using wireless as a lifeline to connect themselves and to improve our daily lives, then why is such a vital service taxed at such incredibly high (and still growing) rates in this country? The average American now pays more than 16 percent in combined monthly local, state and federal wireless taxes and fees; and in this age of budget-strapped governments thirsty for revenue, there is a very real threat of that taxpayer burden going ever higher. Often, tax levies are being heaped on us, per device which certainly adds up for families with children and seniors relying on them, as well as small business owners providing them for their employees. These regressive state and local wireless taxes across the board hit those on fixed incomes, such as seniors, small businesses and our minority community families the hardest. It makes no sense to me how we are discouraging the use of such an important tool by imposing a tax and fee burden thats at this point more than double that which we pay, on average, in general sales tax (7 percent on average).

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The Wireless Tax Fairness Act Taxpayers and Consumers Win!

http://www.protectingtaxpayers.org/index.php?home Taxpayers Protection Alliance David Williams November 1, 2011 Its not very frequently that the Taxpayers Protection Alliance (TPA) reports on a victory, but this evening (November 1) was a banner moment for everyone that owns a cell phone. The House of Representatives passed H.R. 1002, the Wireless Tax Fairness Act. This bi-partisan bill, with 236 co-sponsors, freezes all new state and local taxes and fees on wireless for 5 years. The official scoring entity of Congress, the Congressional Budget Office (CBO), scored it as no additional cost to any level of government. A true win! Mobile devices are becoming a popular way to purchase books, music, or just download any content via the Internet. The Wireless Tax Fairness Act stops states and local governments from imposing multiple or discriminatory taxes on these items. Needless to say, wireless usage has skyrocketed over the years. There is an estimated 292 million American wireless subscriber connections. With this spike in usage has come the temptation of all levels of government to use it as a revenue source. In fact, 47 States and the District of Columbia are going above and beyond the ridiculous by taxing consumers for wireless above the rate they pay for other general goods and services. According to Scott Mackey, an economist and partner at KSE Partners LLP in Montpelier, Vermont Wireless users now face a combined federal, state, and local tax and fee burden of 16.3 percent, a rate two times higher than the average retail sales tax rate and the highest wireless rate since 2005. In total, the annual national consumer tax burden on wireless is $21 billion. Wireless taxes are not victimless. Individuals suffer. Businesses suffer. And, households struggling to make ends meet suffer with tax increases. The truth behind any tax increase at the state and federal level is a function of laziness. Instead of looking for ways to cut spending, states look for tax increase to pay for their excessive government. The House of Representatives took an important step forward in passing the Wireless Tax Fairness Act. This is a true win for both taxpayers and consumers.

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Senators, please protect wireless consumers

The Daily Caller Scott Mackey November 2, 2011

http://dailycaller.com/2011/11/02/senators-please-protect-wireless-consumers/

It should come as no surprise that Congress has a lot of work to do to restore the confidence of the American people in our economy and its management of the federal budget. Growth has stalled, unemployment remains high and many Americans are concerned about making ends meet. The last thing consumers need right now are excessive and targeted state and local taxes on their wireless service. Wireless service has become a top target for government revenue collectors. In my latest study, Ive found that customers on average pay 16 percent of their wireless bill in federal, state and local taxes and fees more than twice the average sales tax rate. Unfortunately, this problem is getting worse, not better. From 2007 through 2010, the effective wireless tax rate grew three times faster than the tax rates for other goods and services. Consumers in 47 states now pay wireless taxes and fees that exceed the general sales tax rate, treating wireless service like a luxury good even though it has become a necessity for most consumers and is key to supporting small business growth and economic development. Wireless and digital services facilitate everyday communication platforms like cell phones, the Internet and video, as well as more innovative services like medical monitoring and diagnostics that rely on wireless networks. Over the last 10 years, these services have noticeably increased our quality of life. Evolving technologies have essentially put computers in our pockets, providing access to new services and applications whether at home or on the go. Prices on these mobile devices have fallen due to competition and innovation, so now Americans across all socioeconomic levels can afford them. Congress wisely chose to allow a dynamic, competitive wireless marketplace to develop over the last 20 years, and now consumers are reaping the benefits. These consumer benefits are threatened if we allow governments to impose excessive taxes and fees on wireless consumers. While some states have refrained from burdening consumers with new taxes, continuing budget shortfalls at the state and local level make wireless consumers a tempting target. Left unchecked, new wireless taxes could price out lower-income consumers from having wireless service altogether threatening to derail affordable communications for the very people and businesses that have come to rely on it and need it most during these trying economic times. Fortunately, there is legislation in Congress that would help stop new discriminatory taxes that threaten to make wireless service unaffordable around the country. On Tuesday, November 1, the U.S. House of Representatives overwhelmingly approved H.R. 1002, the Wireless Tax Fairness

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Our Mission
MyWireless.org is a national nonpartisan non-profit consumer advocacy organization, giving more than 300 million American wireless consumers a powerful and unified voice to protect the freedom, value, convenience and mobility they enjoy with wireless service. MyWireless.org brings together consumers, their families and their businesses from across the country to protect their wireless rights in their cities, states and nationally.

Protecting Our Wireless Freedom

Every day, millions of American consumers take advantage of wireless technology, and every day it becomes more a part of our daily lives. Wireless keeps families and friends connected, helps business deals get done while improving work productivity, and even saves lives in case of emergency. The future of wireless promises even more as communication, entertainment, business, speed and functionality converge. However, unfair and excessive taxes and regulations on wireless threaten the innovation, value and choice wireless consumers enjoy today. Especially for those on fixed budgets like seniors, working families and small businesses. More than 300 million Americans enjoy the personal freedom that wireless offers to them every day. The average wireless consumer today pays more than 16% in taxes and fees thats more than DOUBLE the sales tax rate for most other goods and services. MyWireless.org gives those consumers a unified activist voice to impact policies that affect them, and to protect the affordability and accessibility of wireless for ALL Americans.

Fighting Excessive Taxes and Harmful Regulation

Wireless offers consumers more choice, value and innovative products and services, than ever before. But, unfair and excessive new taxes and regulations on wireless are threatening to decrease those consumer benefits. Discriminatory wireless taxes and fees exceed 24% in some states, and further unchecked, taxes on wireless service will continue to increase much faster than taxes levied on other goods and services. Complicated and costly regulations from government also raise prices and add hassles for consumers, without improving the quality and coverage of their service. Since 2005, MyWireless.org has empowered more than one million consumer activists around the nation to help defeat unfair, new wireless taxes and regulations throughout the country. On behalf of more than 300 million customers, MyWireless.org will continue to educate consumers about harmful wireless taxes and fees in their cities, states and in Washington, D.C., and provide the online education and outreach tools to make a difference with policymakers in protecting their wireless freedom.

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www.mywireless.org