[Congressional Record Volume 145, Number 143 (Wednesday, October 20, 1999)]
[Senate]
[Pages S12934-S12935]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

      By Mr. BROWNBACK (for himself and Mr. Dorgan):
  S. 1755. A bill to amend the Communications Act of 1934 to regulate 
interstate commerce in the use of mobile telephones; to the Committee 
on Commerce, Science, and Transportation.


               the mobile telecommunications sourcing act

  Mr. BROWNBACK. Mr. President, I rise today to introduce, on behalf of 
myself and Senator Dorgan, the Mobile Telecommunications Sourcing Act 
of 1999. This legislation is the product of more than a year's worth of 
negotiations between the Governors, cities, State tax and local tax 
authorities, and the wireless industry.
  The legislation represents an historic agreement between State and 
local governments and the wireless industry to bring sanity to the 
manner in which wireless telecommunications services are taxed.
  For as long as we have had wireless telecommunications in this 
country, we have had a taxation system that is incredibly complex for 
carriers and costly for consumers. Today, there are several different 
methodologies that determine whether a taxing jurisdiction may tax a 
wireless call.
  If a call originates at a cell site located in a jurisdiction, it may 
impose a tax. If a call originates at a switch in the jurisdiction, a 
tax may be imposed. And if the billing address is in the jurisdiction, 
a tax can be imposed.
  As a result, many different taxing authorities can tax the same 
wireless call. The farther you travel during a call, the greater the 
number of taxes that can be imposed upon it.
  This system is simply not sustainable as wireless calls represent an 
increasing portion of the total number of calls made throughout the 
United States. To reduce the cost of making wireless calls, Senator 
Dorgan and I are introducing this legislation.
  The legislation would create a nationwide, uniform system for the 
taxation of wireless calls. The only jurisdictions that would have the 
authority to tax mobile calls would be the taxing authorities of the 
customer's place of primary use, which would essentially be the 
customer's home or office.
  By creating this uniform system, Congress would be greatly 
simplifying the taxation and billing of wireless calls. The wireless 
industry would not have to keep track of countless tax laws for each 
wireless transaction. State and local taxing authorities would be 
relieved of burdensome audit and oversight responsibilities without 
losing the authority to tax wireless calls. And, most importantly, 
consumers would see reduced wireless rates and fewer billing headaches.
  The Mobile Telecommunications Sourcing Act is a win-win-win. It's a 
win for industry, a win for government, and a win for consumers. I 
thank Senator Dorgan for working with me in crafting this bill. And, 
most of all, I thank government and industry for coming together and 
reaching agreement on this important issue.
  Mr. President, I ask unanimous consent that the bill be printed in 
the Record.
  [Data not available at time of printing.]
 Mr. DORGAN. Mr. President, today my colleague Senator 
Brownback and I are introducing legislation that is designed to address 
a highly complex issue with respect the taxation of mobile 
telecommunications service. Although the issue is complex, the solution 
has a simple goal: to create a reliable and uniform method of taxation 
on wireless telecommunications services that works best for consumers.
  Currently, the mobility of wireless telecommunications services makes 
the taxation by state and local jurisdictions a complicated and 
expensive task for carriers and consumers because questions arise as to 
whether the tax is levied in the location in which the call is placed 
or where the user resides. Because this situation is difficult to 
monitor, state and local jurisdictions the prospects of non-compliance 
and double taxation are also of concern. For example, a person driving 
between Baltimore, Maryland and Philadelphia, Pennsylvania can pass 
through 12 separate state and local taxing jurisdictions. In the two 
hours it would take someone to make that 100 mile drive, several phone 
calls could be made under a cloud of tax ambiguity that works for no 
one, not the consumer, not the carrier, and not the taxing 
jurisdictions. This scenario presents us with challenge to the 
traditional method of taxation in the face of the growing popularity of 
mobile communications systems. It is a case that needs to be changed.
  The Mobile Telecommunications Sourcing Act is, in itself, an 
achievement. This legislation was developed through 3 years of 
dedicated, good faith negotiations between the industry and state and 
local government organizations. Rather than allow an unworkable 
situation to continue unresolved and rather than ignite a polemical 
political debate over a special interest solution, the industry and 
several state and local government organizations sat down and worked 
out a solution that satisfies all the stake holders. I extend my 
congratulations and gratitude to the leaders and staff members of the 
organizations that participated in the development of this consensus 
legislation.

[[Page S12935]]

  Under this legislation, a consumer's primary place of residence would 
be designated as the taxing jurisdiction for the purposes of taxing 
roaming and other charges that are subject to state and local taxation. 
This legislation does not impose any new taxes nor does it change the 
authority of state and local governments to tax wireless services. It 
does, however, provide consumers with simplified billing, reduce the 
chances of double taxation, preserve the authority of state and local 
jurisdictions to tax wireless services, and reduce the costs of tax 
administration for carriers and governments. In the end, the consumer 
will benefit through this tax clarification legislation that is badly 
needed.
  As many of my colleagues in the Senate know, I have been involved in 
many battles over the years where state and local governments have 
attempted to preserve their taxation authority as Congress has sought 
to preempt that authority on behalf of some special interest. I am very 
pleased to be in a position today to sponsor legislation which 
addresses a legitimate need to clarify and simplify state and local 
taxation in a manner that works for consumers, industry, and state and 
local governments alike.
  I also want to express my gratitude to my colleague Senator Brownback 
for his work on this measure. I hope that our colleagues will take note 
that Senator Brownback and I stand together on this consensus, 
bipartisan legislation and join us to advance this bill 
expeditiously.
                                 ______