[Congressional Record Volume 154, Number 160 (Thursday, October 2, 2008)]
[Senate]
[Page S10459]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




             TAX TREATMENT OF EMPLOYER-PROVIDED CELL PHONES

  Mr. KERRY. Mr. President, Senator Ensign and I would like to engage 
in a brief colloquy with the distinguished chairman and ranking member 
of the Finance Committee, Senators Baucus and Grassley, regarding 
legislation we have sponsored to fix an archaic provision in the Tax 
Code that adversely affects employees and businesses across the 
country. Under a little-noticed provision added in 1989, cell phones, 
blackberries, and similar devices are treated as ``listed property.'' 
As a result, employees must keep detailed records of all calls made on 
their employer-issued cell phones--indicating whether they are personal 
or business-related--or have the value of the phone and phone service 
included as taxable income.
  The current law provision was added at a time when cell phones were 
considered a luxury item. Now, they are a common and necessary part of 
conducting everyday business. Imposing strict substantiation 
requirements on the business use of cell phones and blackberries is 
burdensome and highly impractical given their frequent use in a fast-
paced global environment. To protect tens of thousands of employees and 
their employers from potential audits and tax liability, we should pass 
legislation as soon as possible next year to fix this problem.
  Mr. ENSIGN. I want to join my distinguished colleague from 
Massachusetts and express my hope that legislation can be passed early 
next year to fix the out-dated tax treatment of employer-provided cell 
phones. The bill he and I have introduced has broad bipartisan support 
with over 60 cosponsors. Similar legislation has already passed the 
House. And both Treasury and the IRS are supportive of the fix. Thus, 
Senator Kerry and I would like to ask the distinguished chairman and 
ranking member of the Finance Committee, for their help in passing this 
legislation early next year.
  Mr. BAUCUS. I want to thank my distinguished colleagues from 
Massachusetts and Nevada for raising this issue with us. I want to 
assure them that we are aware of this problem and we will work with our 
colleagues to consider legislation to eliminate the burden for 
employees and employers as early as possible.
  Mr. GRASSLEY. I also want to join the chairman and express my intent 
to have the committee consider legislation that addresses this problem 
as soon as we can. We should not be imposing unreasonable rules on 
employees' use of cell phones and blackberries.
  Mr. KERRY. Senator Ensign and I want to thank the distinguished 
chairman and ranking member of the Finance Committee for their 
willingness to work with us to address this important problem.

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