[Congressional Record Volume 154, Number 113 (Thursday, July 10, 2008)]
[Senate]
[Pages S6571-S6572]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

      By Mr. WYDEN (for himself and Ms. Snowe):
  S. 3249. A bill to restrict any State or local jurisdiction from 
imposing a new discriminatory tax on mobile wireless communications 
services, providers, or property; to the Committee on Finance.
  Mr. WYDEN. Mr. President, 100 years ago the automobile revolutionized 
the way Americans lived and did business. Government responded by 
making a massive investment in infrastructure to support this new 
technology. That investment gave our industries a real competitive 
advantage in the world marketplace for much of the 20th century by 
making it cheaper and easier to move goods around the country.
  Today, information technology has brought an equal, if not greater, 
revolution to American business. But this time, rather than investing 
in infrastructure and fostering growth, we have allowed the country's 
IT infrastructure to be taxed at dangerous and unhealthy levels that 
put American business at a competitive disadvantage.
  The information revolution has changed the way we learn, the way we 
work, the way we hold elections, and the way we communicate as a 
society, among other things that keep our country working. It has made 
vast educational, health care and entrepreneurial opportunities 
accessible to our most remote communities. But telecommunication taxes 
in the U.S. have been levied at a rate much higher than other types of 
sales and business taxes.
  Rather than investing in IT infrastructure, we have left it to the 
private sector to build and maintain our telecommunications networks. 
And while this practice has sometimes served Americans well, we are 
falling behind some major international competitors in far too many 
areas.
  I am not today calling for anything as far-reaching as Federal 
investment in IT infrastructure--today I am simply asking that we stop 
yoking our most innovative IT networks with increased taxes.
  Wireless broadband holds the promise of connecting even our most 
distant communities to the rest of the world. In time, these 
connections will bring health care, educational, communications and 
commercial services to Americans who have been left out for far too 
long. This growth will not happen if we keep burdening this important 
technology with what amounts to discriminatory taxation.
  I have fought for many years to expand the development of the 
Internet and our telecommunications infrastructure. Along with 
colleagues on both sides of the aisle, I worked to successfully protect 
our network providers from content-related litigation. Four times now, 
I have fought to protect the Internet from being hit with multiple 
discriminatory taxes from thousands of State and local tax 
authorities--and have worked to extend that protection indefinitely.
  Today I am proposing something far more modest--if just as 
necessary--that we put a moratorium on new or increased taxes on our 
wireless telecommunications infrastructure and services for the next 5 
years.
  Along with my colleague Senator Snowe, I am introducing the Mobile 
Wireless Tax Fairness Act to keep mobile wireless services and 
facilities free from new discriminatory taxes.
  This bill would not impact a single current tax that has been levied 
by a State or locality. It will not remove a single dollar from their 
communal coffers. What it will do is guarantee our wireless network 
providers protection from even greater taxation at a time when we are 
asking them to implement the largest technology upgrade in history--an 
upgrade that will bring economically important, true broadband speeds 
to wireless customers for the first time.
  I will admit that there are lots of problems with the way Federal, 
State and local taxes are levied on telecommunications services. This 
legislation addresses only one of those problems, but it is a big one.
  Taxes on wireless services are some of the most regressive taxes in 
the Nation. Cell phones and other wireless devices have become 
essential to many working Americans, for their jobs, for their safety 
and for maintaining the communications they need to stay in touch with 
families when both parents work and raise children. Piling increased 
taxes on these families at a time when budgets are being stretched by 
skyrocketing gas and food prices is not only unreasonable, it is 
downright wrong.
  I am proud that my colleague Senator Snowe joins me in introducing 
this important legislation. Senator Snowe has long been an advocate for 
the improvement and expansion of our IT infrastructure and today we 
have taken another important step that will help strengthen our country 
and our economy today and in the future. This proposal joins H.R. 5793 
by Congresswoman Lofgren and Congressman Cannon in the House and I look 
forward to working with them to see this important legislation passed.
  Mr. President, I ask unanimous consent that the text of the bill be 
printed in the Record.
  There being no objection, the text of the bill was ordered to be 
printed in the Record, as follows:

                                S. 3249

       Be it enacted by the Senate and House of Representatives of 
     the United States of America in Congress assembled,

     SECTION 1. SHORT TITLE.

       This Act may be cited as the ``Mobile Wireless Tax Fairness 
     Act of 2008''.

     SEC. 2. FINDINGS.

       Congress finds the following:
       (1) It is appropriate to exercise congressional enforcement 
     authority under section 5 of the 14th amendment to the 
     Constitution of the United States and Congress' plenary power 
     under article I, section 8, clause 3 of the Constitution of 
     the United States (commonly known as the ``commerce clause'') 
     in order to ensure that States and political subdivisions 
     thereof do not discriminate against providers and consumers 
     of mobile services by imposing new selective and excessive 
     taxes and other burdens on such providers and consumers.
       (2) In light of the history and pattern of discriminatory 
     taxation faced by providers and consumers of mobile services, 
     the prohibitions against and remedies to correct 
     discriminatory State and local taxation in section 306 of the 
     Railroad Revitalization and Regulatory Reform Act of 1976 (49 
     U.S.C. 11501) provide an appropriate analogy for 
     congressional action, and similar Federal legislative 
     measures are warranted that will prohibit imposing new 
     discriminatory taxes on providers and consumers of mobile 
     services and that will assure an effective, uniform remedy.

     SEC. 3. MORATORIUM.

       (a) In General.--No State or local jurisdiction shall 
     impose a new discriminatory tax on or with respect to mobile 
     services, mobile service providers, or mobile service 
     property, during the 5-year period beginning on the date of 
     the enactment of this Act.
       (b) Definitions.--In this Act:
       (1) Mobile service.--The term ``mobile service'' means 
     commercial mobile radio service, as such term is defined in 
     section 20.3 of title 47, Code of Federal Regulations, as in 
     effect on the date of the enactment of this Act, or any other 
     service that is primarily intended for receipt on, 
     transmission from, or use with a mobile telecommunications 
     device, including the receipt of a digital good.
       (2) Mobile service property.--The term ``mobile service 
     property'' means all property used by a mobile service 
     provider in connection with its business of providing mobile 
     services, whether real, personal, tangible, or intangible and 
     includes goodwill, licenses, customer lists, and other 
     similar intangible property associated with such business.
       (3) Mobile service provider.--The term ``mobile service 
     provider'' means any entity that sells or provides mobile 
     services, but only with respect to the portion of such 
     entity's trade or business that sells or provides such 
     services.
       (4) New discriminatory tax.--The term ``new discriminatory 
     tax'' means any tax imposed by a State or local jurisdiction 
     that--
       (A) is imposed on or with respect to, or is measured by the 
     charges, receipts, or revenues from or value of--
       (i) any mobile service and is not generally imposed, or is 
     generally imposed at a lower rate, on or with respect to, or 
     measured by the charges, receipts, or revenues from, other 
     services or transactions involving tangible personal 
     property;
       (ii) any mobile service provider and is not generally 
     imposed, or is generally imposed at a lower rate, on other 
     persons that are engaged in businesses other than the 
     provision of mobile services; or
       (iii) any mobile service property and is not generally 
     imposed, or is generally imposed at a lower rate, on or with 
     respect to, or measured by the value of, other property that 
     is devoted to a commercial or industrial use and subject to a 
     property tax levy, except public utility property owned by a 
     public utility subject to rate of return regulation by a 
     State or Federal regulatory authority; and
       (B) was not generally imposed and actually enforced on 
     mobile services, mobile service providers, or mobile service 
     property prior to the date of the enactment of this Act.
       (5) State or local jurisdiction.--The term ``State or local 
     jurisdiction'' means any

[[Page S6572]]

     of the several States, the District of Columbia, any 
     territory or possession of the United States, a political 
     subdivision of any State, territory, or possession, or any 
     governmental entity or person acting on behalf of such State, 
     territory, possession, or subdivision and with the authority 
     to assess, impose, levy, or collect taxes or fees.
       (6) Tax.--
       (A) In general.--The term ``tax'' means any charge imposed 
     by any governmental entity for the purpose of generating 
     revenues for governmental purposes, and is not a fee imposed 
     on an individual entity or class of entities for a specific 
     privilege, service, or benefit conferred exclusively on such 
     entity or class of entities.
       (B) Exclusion.--The term ``tax'' does not include any fee 
     or charge--
       (i) used to preserve and advance Federal universal service 
     or similar State programs authorized by section 254 of the 
     Communications Act of 1934 (47 U.S.C. 254); or
       (ii) specifically dedicated by a State or local 
     jurisdiction for the support of E-911 communications systems.
       (c) Rules of Construction.--
       (1) Determination.--For purposes of subsection (b)(4), all 
     taxes, tax rates, exemptions, deductions, credits, 
     incentives, exclusions, and other similar factors shall be 
     taken into account in determining whether a tax is a new 
     discriminatory tax.
       (2) Application of principles.--Except as otherwise 
     provided in this Act, in determining whether a tax on mobile 
     service property is a new discriminatory tax for purposes of 
     subsection (b)(4)(A)(iii), principles similar to those set 
     forth in section 306 of the Railroad Revitalization and 
     Regulatory Reform Act of 1976 (49 U.S.C. 11501) shall apply.
       (3) Exclusions.--Notwithstanding any other provision of 
     this Act--
       (A) the term ``generally imposed'' as used in subsection 
     (b)(4) shall not apply to any tax imposed only on--
       (i) specific services;
       (ii) specific industries or business segments; or
       (iii) specific types of property; and
       (B) the term ``new discriminatory tax'' shall not include a 
     new tax or the modification of an existing tax that--
       (i) replaces one or more taxes that had been imposed on 
     mobile services, mobile service providers, or mobile service 
     property; and
       (ii) is designed so that, based on information available at 
     the time of the enactment of such new tax or such 
     modification, the amount of tax revenues generated thereby 
     with respect to such mobile services, mobile service 
     providers, or mobile service property is reasonably expected 
     not to exceed the amount of tax revenues that would have been 
     generated by the respective replaced tax or taxes with 
     respect to such mobile services, mobile service providers, or 
     mobile service property.

     SEC. 4. ENFORCEMENT.

       (a) In General.--Notwithstanding any provision of section 
     1341 of title 28, United States Code, or the constitution or 
     laws of any State, the district courts of the United States 
     shall have jurisdiction, without regard to amount in 
     controversy or citizenship of the parties, to grant such 
     mandatory or prohibitive injunctive relief, interim equitable 
     relief, and declaratory judgments as may be necessary to 
     prevent, restrain, or terminate any acts in violation of this 
     Act, provided that:
       (1) Jurisdiction.--Such jurisdiction shall not be exclusive 
     of the jurisdiction which any Federal or State court may have 
     in the absence of this section.
       (2) Burden of proof.--The burden of proof in any proceeding 
     brought under this Act shall be upon the party seeking relief 
     and shall be by a preponderance of the evidence on all issues 
     of fact.
       (3) Relief.--In granting relief against a tax which is 
     discriminatory or excessive under this Act with respect to 
     tax rate or amount only, the court shall prevent, restrain, 
     or terminate the imposition, levy, or collection of not more 
     than the discriminatory or excessive portion of the tax as 
     determined by the court.

  Ms. SNOWE. Mr. President, I rise today to join my colleague, Senator 
Wyden, in introducing legislation that will stop the increasing 
financial burden being placed on wireless consumers by discriminatory 
taxes. On average, the typical consumer pays 15.2 percent of his/her 
total wireless bill in Federal, State, and local taxes, fees and 
surcharges--this is compared to the 7.07 percent average tax rate for 
other goods and services.
  The Mobile Wireless Tax Fairness Act of 2008 would ensure that these 
tax rates don't increase further by prohibiting States and local 
governments from imposing any new discriminatory tax on mobile 
services, mobile service providers, or mobile service property for a 
period of 5 years. The bill defines ``new discriminatory tax'' as a tax 
imposed on mobile services, providers, or property that is not 
generally imposed on other types of services or property, or that is 
generally imposed at a lower rate.
  The wireless era has changed the way the world communicates. More and 
more people are using the cell phone as their primary communication 
device as well as for data and Internet services. The increased 
mobility and access wireless communications provide have improved our 
lives, our safety, and the productivity of our work and businesses. To 
date, there are more than 260 million wireless subscribers in the U.S., 
and total usage exceeded 1 trillion minutes in June 2007 alone.
  However, as more consumers embrace wireless technologies and 
applications, more States and local governments are embracing it as a 
revenue source and applying these excessive and discriminatory taxes, 
which show up on consumers' bills each month. In fact, the effective 
rate of taxation on wireless services has increased four times faster 
than the rate on other taxable goods and services between January 2003 
and January 2007.
  These excessive and discriminatory taxes discourage wireless' 
adoption and use, primarily with low-income individuals and families 
that still view a cellular phone as a luxury when many Americans 
consider it a necessity. By banning these taxes, we can equalize the 
taxation of the wireless industry with that of other goods and services 
and protect the wireless consumer from the weight of fees, surcharges, 
and general business taxes. We cannot allow this essential and 
innovative industry as well as the consumers who benefit from its 
amazing services and applications to suffer excessive tax rates.
  Placing a moratorium on new discriminatory wireless taxes will make 
certain consumers continue to reap the benefits of wireless services. 
Congress took similar action with the Internet--passing the Internet 
Tax Freedom Act Amendments Act of 2007 this past fall--because of the 
incredible impact the Internet will continue to have on consumers and 
businesses alike. The future of wireless is just as bright and that is 
why we must ensure its continued growth. That is why I sincerely hope 
that my colleagues join Senator Wyden and me in supporting this 
critical legislation.
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