Several local government associations are urging Congress to vote down the so-called Wireless Tax Fairness Act of 2011 (WTFA). If enacted, the legislation would preempt state and local taxing authority at a time when most jurisdictions are facing severe budget shortfalls, as well as cutbacks and eliminations in federal assistance, according to the associations.
WTFA would prohibit state or local governments from imposing any new discriminatory taxes on mobile services, mobile service providers or mobile service property, such as cell phones, for five years after it is enacted. The groups opposing the act include the Washington-based, , the United States Conference of Mayors, the International City/County Management Association, the Government Finance Officers Association, and the National Association of Telecommunications Officers and Advisors. "The bill would cause great damage to our system of federalism and the fiscal health of state and local governments while purporting to solve a problem – the supposed dampening effect of taxes on wireless service growth – that simply doesn't exist," the associations said in a July 13 letter the House Judiciary Committee. "The wireless industry is just one of many industries requesting that Congress preempt state and local taxing authority… If H.R. 1002 becomes law, Congress will continue to be flooded with demands from other industries, such as rental car and online travel companies, seeking exemption from state and local taxes."
The letter goes on to state that prohibiting state and local governments from taxing mobile services and devices would harm their recovery from the recession. "What this bill does is take away [a tool for recovery,] — to tax the wireless industry — at the expense of other taxpayers and businesses."