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The Badger Herald

Independent Student Newspaper Since 1969

The Badger Herald

Independent Student Newspaper Since 1969

The Badger Herald

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Legislators examine bill to add tax to cell phone service

Students with cell phones may be subject to a new tax if a bill mandating the taxing of mobile telecommunication services passes.

The Joint Survey Committee on Tax Exemptions met yesterday to discuss various bills designed to mend the budget deficit.

Among the bills discussed was Assembly Bill 525. This bill has the ability to affect almost everyone with mobile telecommunication services and would take effect after Aug. 1, 2002.

Under current law, the sale of a cellular phone is subject to sales tax if the service either originates or terminates in Wisconsin.

The proposed bill mandates all cell phone service charges be subject to sales tax if the customer’s place of primary use is within the state, regardless of where the service originates or terminates.

Determining the area of primary use is a concern. Under the proposed bill, a mobile telecommunication service provider is responsible for determining the customer’s place of primary use. The same provider may depend on an electronic database of addresses and taxing jurisdictions to determine that area of primary use.

Gordon Scott, a UW sophomore, said he was upset with the proposal of a new tax.

“Only Wisconsin would create new taxes in a recession,” he said.

The proposed bill is not a tax on the purchase of cellular phones themselves, but on service plans.

A spokesperson for Rep. Eugene Hahn, R-Springvale, said the cell phone tax deals only with the sale of mobile plans.

Debbie Monterrey-Millett, press person for Gov. Scott McCallum, said Assembly Bill 525 was not part of the governor’s proposed budget reform.

“That bill is not in the governor’s budget,” she said.

Legislators said those on the losing end will be individual cell phone users who cross state lines looking for cheaper service plans. If many college students or border-dwelling citizens cancel their home plans and enroll in Wisconsin-based service plans, then the Wisconsin economy and the mobile telecommunication companies in Wisconsin could see increased revenue.

Many students said Wisconsin already has enough taxes. Kelly Callan, a UW sophomore, said more taxes are not needed.

“I like the idea that it helps out the economy,” she said. “But I don’t think that raising and creating new taxes will fix the problem.”

The Assembly Information Policy and Technology Committee, chaired by Rep. Mark Pettis, R-La Follette, is holding a hearing this week on a telecommunication policy bill that may include different tax treatment of cell phones.

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