Monday, April 13, 2015

Congress Should Emulate Florida's Approach On Cellphone Taxation

In January, Florida Governor Rick Scott announced a plan to cut $470 million in cellphone and television taxes. Fortunately, Florida State legislators appear to be receptive to his plan. On April 9, the Florida House passed a $690 million tax cut that would save cellphone users a significant amount of money if the Senate signs off on the bill.
Currently, Florida residents pay the fourth highest wireless tax rate in the country when including federal, state, and local taxes. Only New York, Washington, and Nebraska have higher wireless tax rates.
Cutting wireless taxes will substantially benefit the low-income Florida residents considering that over 56 percent of all poor American adults had only wireless Internet service as of December 2013. (This percentage has likely increased as wireless networks and wireless plans have become more available.) So not only is it important that wireless taxes be cut throughout the United States – not just Florida, but also that taxes on Internet access are as low as possible in order push prices to an affordable level so every willing consumer can get online. As I’ve encouraged Congress before, this is why the House and Senate should vote to permanently extend the Internet Tax Freedom Act (ITFA), which would ban taxes on Internet access at the state and local levels. (See here and here.)
As of now, the current tax moratorium of the ITFA expires on October 1, 2015, so the permanent moratorium should be adopted as soon as possible. Permanently extending the ITFA should be legislation both parties and chambers can support because it will lead to additional market-driven innovation, content, and economic growth.