West Linn eyes stealth tax on cell-phones

By Taxpayers Association of Oregon
OregonWatchdog.com

Sometimes cities pass back-door taxes to avoid public scrutiny which, in this case, will cost cell-phone users higher bills when they are already high enough.

West Linn is considering updates to its municipal code that will increase the cost of wireless telecommunications services for local residents through imposition of taxes on phantom uses of the public right of way and a new privilege tax cell phone service. This makes it a stealth tax. We hope that you will reject the proposal.

As wireless communications carriers have noted, they, like other businesses in the city, purchase access to broadband via wireline providers. Lacking infrastructure in the public right of way, wireless providers are merely customers of the broadband providers – who already pay a tax on the infrastructure. There is no justification to also tax wireless providers for infrastructure that they do not own and whose use is already taxed.

The proposed code change also functions as a privilege tax – taxing wireless telecommunications providers based on a percentage of their gross revenue – while not receiving any goods or service related to the fee. This clearly conflicts with Oregon’s Corporate Activities Tax preemption on such taxes.

Ultimately these type of fees are passed on the consumers in the form of higher costs for the services covered by the proposed tax. Families are still reeling from record inflation over the past five years. With everything from food, fuel and a variety of other services already costing local residents more, now hardly seems like the right time to add another costly and regressive tax. There is no practical reason or justification for these new taxes other than to boost the city’s revenues. The City Council should reject this proposal.