I Wanna Know

PW exposes the tricks, scams and truth about the powers that be.

By Sammy Mack
Add Comment Add Comment | Comments: 0 | Posted Mar. 17, 2004

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Q: The January bill from my mobile phone provider included a new surcharge of $2.67 called the "PA Gross Receipt Surcharge." When I called the provider, I was told the charge was imposed on all mobile phone customers by the state of Pennsylvania. I was also told that ours was the only state on the East Coast that imposes such a tax, and the state wants to make it more expensive for their residents to use a cell phone. Is this true?

A: That's partly true. It would appear that the state does want to make cell phone use more expensive. The newest charge to show up on your wireless bill is part of the Pennsylvania Gross Receipts Tax. Last Dec. 22 the Pennsylvania Legislature passed a bill that included a $235 million tax on cell phone services as part of a new budget. The new tax became effective Jan. 1. Philadelphians already pay local telecommunications taxes, along with a monthly $1 charge for 911 emergency services and an additional 1 percent in federal regulatory fees. All told, Philadelphians are paying an extra 18 percent in taxes, fees and government mandates. But wireless customers aren't the only folks upset about the tax. "Verizon Wireless, along with other major wireless carriers operating in Pennsylvania, are opposed to this tax for several reasons," says Sheldon Jones, a local spokesperson for the cell phone service provider. For starters, the company believes the tax will not only deter customers but will also discourage further telecommunication investments in the state. This assertion is partially based on a report by economists Thomas M. Lenard and Brent D. Mast of the Progress and Freedom Foundation, a nonprofit that studies the development of information technology. The report claims that wireless taxes across the nation eliminate around 22.4 million potential customers. That's a pretty hefty number, even for megabucks phone companies. The piece of information your service provider had wrong is that Pennsylvania is not the only East Coast state with such a tax. Rhode Island, Washington, D.C., and Virginia have similar taxes. But as Jones points out, "many of those states exempt wireless companies from other taxes." Unless Pennsylvania makes a similar concession, telecommunication taxes in the state will remain among the highest in the nation.

What do you wanna know? Send queries and complaints to Sammy Mack at smack@philadelphiaweekly.com

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