Portland considers tax on cell phones

PORTLAND – Portland residents could soon be paying a city tax on their wireless phones, under a proposal backed by Commissioner Randy Leonard that could raise $6 million.

Leonard said Mayor Tom Potter and Commissioner Erik Sten might back his proposal, giving him three of the five votes needed.

Many telephone users, especially younger people, are giving up their land lines to rely exclusively on cell phones, causing a drop in the city’s revenue from land-line taxes.

In Oregon, Eugene and Springfield already have cell phone taxes. The Oregon Legislature is considering a bill that some say would standardize all telephone taxes.

Other states and cities – from Maryland to Louisiana to Missouri – also are also looking to wireless phones as a new pot of tax revenue.

Wireless phone subscribers nationwide paid an estimated $17.8 billion in federal, state and local taxes last year.

Leonard’s plan calls for implementing a 5 percent tax on revenues from wireless phones and land-line services, such as call waiting, within the city of Portland. An existing 7 percent tax on basic land-line service would drop to 5 percent.

The commissioner said he also wants to tax Internet phone service but noted that the idea is still “hotly being discussed.”

If approved, the tax would sink an additional $6 million into the city’s coffers.

Customers with a $40 wireless bill would see their bills rise by $2. Land line customers with a $20 bill that doesn’t include additional features would pay 40 cents less.