House passes changes to phone taxes

JEFFERSON CITY, Mo. -- Cell phone users could face new taxes while people with traditional land-line phones could see their tax rates fall under legislation passed Wednesday by the House.

The bill would set caps on the tax rates cities could impose on phone companies and would invalidate lawsuits by numerous cities seeking to collect what they contend are back taxes owed by the cell phone industry.

The legislation generally is backed by the telecommunications industry and opposed by the Missouri Municipal League, whose members fear they could lose money.

The 97-55 House vote sends the legislation to the Senate.

In the pending lawsuits, some cell phone companies contend they don't qualify as telecommunications companies under many municipal tax ordinances, many of which were drafted before wireless phones became common.

Cooper's bill would include wireless phone companies in the definition and require cities to impose the same tax rate on land-line and cell phones. That local tax rate initially would be set at an amount that would result in the same net revenues for the cities as their current land-line taxes. In coming years, the bill would cap the municipal phone tax rate at 5 percent of taxable sales, then 3 percent.

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Phone bill is HB209.

On the Net:

Legislature: http://www.moga.state.mo.us