House Judiciary Committee OKs Wireless Tax Fairness Act with Amendments
The House Judiciary Committee passed the Wireless Tax Fairness Act with two amendments that call for exemptions and studies on the HR-1002’s potential impact and phone cramming. The bill, which will go to the floor, would ban state and local taxes on wireless for five years.
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Zoe Lofgren, D-Calif., who introduced the bill in March, successfully proposed Thursday to exempt from the legislation jurisdictions where voters impose their own tax increase. The ultimate goal is to modernize the wireless tax framework, and the amendment wouldn’t stop that, she said. Another amendment that passed was by Maxine Waters, D-Calif., proposed to study the impact of the bill on state and local governments. She further urged a GAO report to study the impact of wireless taxes on consumer choice over a five-year period. Waters also emphasized the need to address phone bill transparency issues. Hidden fees and unauthorized fees could be equally burdensome, she said, citing lawsuits over unauthorized charges against major carriers. The FCC estimates that cramming charges affect up to 20 million U.S. consumers annually, she said. It’s important to track if the bill would achieve its intended purposes, Waters said. “It’s fair to track what happens,” Lofgren said.
Committee members acknowledged the impact of the recession on consumers and state and local governments. The bill simply promotes tax fairness, said Chairman Lamar Smith, R-Texas, said at a markup Thursday. State and local revenue shouldn’t be affected by the legislation, he said. He expects the bill to be enacted into law. It’s a pro-consumer bill, said Trent Franks, R-Ariz. Access to wireless service is essential for consumers and small businesses, especially in difficult times, he said. The bill wouldn’t affect existing taxes, said Lofgren. Only new discriminatory taxes would be affected, she said. Wireless service is taxed at a higher rate in some states than other goods, she said. Those taxes fall hard on minority and low-income families, she said. The ultimate goal is to modernize state and local wireless taxes, she said.
Ranking member John Conyers, D-Mich., appeared skeptical of the legislation, urging balancing competing interests as members review the bill. While increasing wireless taxes and fees hurt consumers, state and local governments rely on tax revenue to provide essential services, he said. The question is how to keep state and local governments afloat, he said. States should have their own tax authority, he said. Policymakers should consider how to help state and local governments with their budget crisis during difficult times instead of limiting their abilities to raise revenue, he said.