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Oregon proposes local cell phone tax

Major cell phone lobbyists launch a campaign opposing a proposed law for Oregon municipalities to collect a 5 percent cell phone tax.

Major cell phone lobbyists have launched a campaign opposing a proposed law for Oregon municipalities to collect a 5 percent cell phone tax.

Late last week, the Cellular Telecommunications & Internet Association sent letters to major Oregon lawmakers urging they defeat the tax. The proposed tax had been introduced earlier this year.

The tax on Oregon residents would increase a typical cell phone bill by about $2.50 a month. Wireless operators would keep a small percentage, about 3 percent of the overall pool of money, to pay for the costs of collecting the tax.

The legislation is generating controversy because it's the first to give municipalities cell phone taxing authority.

"It is the intent to change the way in which municipalities regulate and impose charges upon telecommunications providers," the bill states.

Already, about 17 percent of a typical U.S. cell phone bill covers state taxes and federal fees--an increase of 3 percentage points more than in 2003. At a recent industry gathering, Steve Largent, chief executive of major wireless lobbyists CTIA, warned of a new blitz of state and municipal cell phone laws in the works. The patchwork of regulations and the new line items on cell phone bills will slow growth and development of better cell phones and services, Largent said.

"While this may amount to a windfall for Oregon cities, it is certainly a sizable tax increase for your constituents," Largent wrote to Oregon lawmakers on Friday. "Utility-type tax proposals like the one being considered in Oregon only serve to punish consumers who have opted to become wireless subscribers."