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Friday, June 3, 2011

Congress Looks to Hold Line on State, Local Wireless Taxes

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At least one state tax issue is getting the attention of Congress.

The Wireless Tax Fairness Act of 2011 (H.R. 1002), introduced by Reps. Zoe Lofgren (D-Calif.) and Trent Franks (R-Ariz.), would prohibit discriminatory state and local taxes on wireless services. The bill was the subject of a hearing March 15 in the  House Judiciary Subcommitee on Courts, Commercial and Administrative Law and  has gathered  165 co-sponsors in the House to date. A related measure (S. 543) in the Senate was introduced by Sens. Ron Wyden (D-Ore.) and Olympia Snow (R-Maine), with seven co-sponsors so far.

This marks the third attempt to pass federal legislation restricting state taxation of wireless telecommunications.

Economist Scott Mackey reports that state taxes on wireless communications have continued to pile on, with the average consumer paying more than 16 percent in wireless fees and taxes. In five states, those taxes and fees are greater than 20 percent, so that the average wireless customer pays  $7.84 per month in taxes, fees, and government surcharges.

In other developments:

In California, two bills aimed at forcing out-of-state retailers to collect the use tax on in-state sales are moving forward in the Assembly and the Senate.

Use of the three-factor formula is not permitted for the Texas franchise tax (thanks to Brian Strahle for the tip).

Drastic budget measures in one California city lead to the firing of half the town’s employees.

Plante Moran explains the Ohio Use Tax “Education” Program.

Tax Foundation: Virginia says ‘no’ to a bag tax.

A look at gas tax rates nationwide: highest in the nation, California at 47.7 cents per gallon. Lowest—Alaska, at 8 cents per gallon.

-- Dolores Gregory

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