TELECOM Digest OnLine - Sorted: Mayyland Tax Court Upholds Cell Phone Fees

Mayyland Tax Court Upholds Cell Phone Fees

Associated Press News Wire (
Tue, 4 Jul 2006 17:39:54 -0500

Two of Maryland's largest jurisdictions did not overstep their
authority by imposing cell phone fees, the state tax court has ruled.

The court rejected an attempt by four wireless providers to overturn
Baltimore's $3.50 a month fee on cell phones and land lines imposed in
2004, and Montgomery County's $2 wireless fee imposed three years ago.

T-Mobile, Verizon Wireless, Sprint and Cingular Wireless challenged
the fees in February 2005, arguing that they were really sales taxes,
which only the state can impose.

The court ruled against the companies last week.

"The tax is not measured by the number of minutes that a customer uses
his or her phone, or even by the number of calls made," the court
wrote in its decision Thursday. "A flat tax on a telephone line, which
does not vary depending on customer usage, is an excise tax rather
than a sales tax under Maryland law."

Attorneys for the companies could not be reached for comment Tuesday
to say whether they would appeal the decision.

The city's fee generated nearly $26.2 million in its first year, with
$9.98 million coming from the wireless portion, city officials
said. The city projects it will collect $28.6 million for the fiscal
year that ended June 30. The Montgomery tax is estimated to have
generated $45 million since August 2003.

Copyright 2006 The Associated Press.

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