| [May 25, 2006] |
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Wireless Consumers Get Excise Tax Reprieve; CTIA - The Wireless Association(R) to Turn Tax Focus on States
WASHINGTON --(Business Wire)-- May 25, 2006 -- CTIA - The Wireless Association(R) President and CEO Steve Largent congratulated the U.S. Treasury Department today for its decision to abandon its legal dispute over the federal excise tax (FET) on long-distance telephone service. The 108-year-old FET was instituted in 1898 to finance the Spanish-American War, and adds 3% to the monthly bill of every wireless user in America. Today, there are more than 214 million estimated wireless subscribers in the nation.
"The Spanish-American War ended successfully a long time ago, and now after a rough ride for consumers, so has the battle over the FET. Today every wireless subscriber in the nation can celebrate a much-deserved 3% tax cut," said Largent. "Without the millions of wireless users all across America lending their voice to this effort, we may not have reached this important day."
In recent months, the Internal Revenue Service had come under increasing pressure from wireless consumers to repeal the FET after five separate U.S. Circuit Courts of Appeals had found the federal surcharge to be illegal. The antiquated tax can be levied on phone calls wherein the charge varies based on the call's duration and distance traveled. The wireless industry abandoned such a tariff scheme several years ago in favor of offering consumers "all-distance" minutes.
"With the FET finally taking its rightful place aside the Spanish-American War in our history books, wireless consumers can now turn their attention and efforts to repealing discriminatory wireless taxes on the state and local level," continued Largent.
Largent was referring to the numerous state and local wireless-specific surcharges that contribute to the average wireless user in America paying 17% of his or her monthly bill in taxes and fees. What has become apparent to CTIA is that Americans are increasingly turning to wireless to meet their modern telecommunication's needs, and as a result, state and local policymakers are looking at the growing number of wireless consumers to plug holes in their budgets.
"Unfortunately, these taxes can be roadblocks to low or fixed-income Americans who want to enjoy the benefits and efficiencies that only wireless can deliver. To think that some public bodies are still considering tax policies that discourage segments of the population from taking part in the wireless revolution makes no sense at all," continued Largent.
Since Largent became President and CEO of the wireless trade group in September of 2003, the industry has made fighting discriminatory wireless taxation a top priority.
CTIA is the international association for the wireless telecommunications industry, representing carriers, manufacturers and wireless Internet providers. www.ctia.org
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