Baylor > Lariat Archives > News

Proposed bill would cut taxes from phone fees

Feb. 9, 2001

But revenue from some taxes funds social programs


Staff writer

Consumers are being double-taxed on their phone bills, said Sen. David Sibley (R-Waco). On Tuesday, Sibley filed a bill that proposes to eliminate local and state sales taxes on five telephone fees.

'It is unfair to require consumers to pay what is essentially a tax on a tax,' Sibley said.

The sales tax on the five targeted fees generated more than $96.6 million during 2000. Sibley became aware of the sales taxes during an interim hearing of the Senate Economic Development Committee, which was examining all telephone fees paid by Texas customers.

If the bill passes, the average telephone customer will save between $1 and $5 per month.

One of the taxes Sibley wants to eliminate is on the Telecommunications Infrastructure Fund Assessment, which was passed by the legislature in 1995. The TIF provides advanced technology equipment to public schools, hospitals and libraries through grants and loans.

'I think the legislature should be careful about where they cut taxes,' Will Shurley, a Monroe, La., sophomore, said. 'The state auditor needs to find extra money in the budget to make sure these programs are still funded.'

Another sales tax targeted by Sibley is on the Texas Universal Service Charge, which was passed by the legislature in 1987. This fee provides affordable service to the hearing impaired and low-income customers.

'While eliminating these sales tax payments will cut revenue to both the state of Texas and to municipalities, I don't believe we can justify this double-taxing of the public,' Sibley said.

Utility taxes, which include phone taxes, make up .5 percent of the total revenue of the state of Texas. More than $264 million was generated in utility taxes last year, according to the Texas comptroller's office.

Fee cuts at a glance

Federal Universal Service Charge: Assessed to all telecommunications companies with interstate operations; funds discounts for schools, libraries and rural health providers.

Texas Universal Service Charge: Provides affordable service to high cost rural customers and funds assistance programs for hearing impaired.

Telecom Infrastructure Fund Assessment: Provides advanced technology equipment to public schools, hospitals and libraries through grants and loans.

Public Utility Gross Receipts Tax: Most of the revenue goes to the state's general revenue fund.

Telecom Municipal Franchise Fees: Fees compensate municipalities for use of public rights-of-way by telecommunication providers.