2009-06

No New State and Local Wireless Taxes

Candelaria-Reardon (IN) Introduced April 09 Executive Meeting; Ratified

Whereas, the tax structure imposed upon the communications industry today is a hold
over from the days when the industry was dominated by one rate regulated utility with
minimal consumer choice;

Whereas, national studies have shown that the average rate of taxation on goods and services is approximately 7% while the average taxation on wireless service is twice as high at almost 15%;1

Whereas, according to the Pew Internet & American Life Project, mobile access, which is achieved through a device easier to use and more affordable that a computer, is more likely to be utilized by groups that have generally lagged in Internet adoption, such as Latino’s, senior citizens and African Americans;

Whereas, taxes on wireless consumers are regressive, taking a larger share of the
incomes of lower income consumers;

Whereas, state policymakers recognize that the deployment of broadband infrastructure is a vital economic development tool and has important public benefits for education, health care, and government services;

Whereas, tax policies that impose excessive tax burdens on wireless consumers and providers slow investment in broadband networks by reducing consumer purchases and diverting capital from investment to taxation; and

Whereas, the U.S. House of Representatives legislation has to date over 130 bipartisan sponsor and co-sponsors,

THEREFORE, BE IT RESOLVED, that the National Hispanic Caucus of State Legislatures calls upon the Congress, the States, and local governments to fully
engage in meaningful reform of state and local taxation of telecommunications services.

BE IT FURTHER RESOLVED that, the U.S Congress pass H.R. 1521 and S 1192, legislation that would impose a five-year moratorium on new discriminatory state and local wireless taxes. The legislation before the U.S Congress will:

Protect all consumers from new discriminatory taxes on wireless service that threaten to make wireless service less affordable.

• Provide a “time out” from new taxes on wireless service so states and localities can consider reforms to permanently reduce tax burdens on wireless consumers.
• Preserve existing revenues from wireless consumers so that state and local budget shortfalls are not worsened during the economic downturn.

BE IT FURTHER RESOLVED BY the National Hispanic Caucus of State Legislators, a copy of this resolution be sent to all members of the U.S. Congress.

This resolution was introduced at the April, 2009 NHCSL Executive Committee meeting held in Washington, DC and ratified at the 2009 NHCSL annual meeting held in Santa Monica, California, November 21, 2009.