City Council considering cellular phone-service tax

April 10, 1997|By JoAnna Daemmrich | JoAnna Daemmrich,SUN STAFF

Talk may get a little less cheap in Baltimore, at least on a cellular phone.

The City Council is considering a plan to raise money for the cash-strapped city by imposing a 12 percent local tax on mobile phone service.

In trying to find new ways to deal with the financial squeeze from declining property and income tax revenues, Councilman Nicholas C. D'Adamo Jr. wants to tax the cell phones and beepers.

"It makes sense -- a phone is a phone," said D'Adamo, who introduced the phone bill Monday night and plans to put in a companion bill next week for a 12 percent tax on pagers.

Baltimore already collects a 12 percent tax on the standard, land-line phone service in residences and offices. Several nearby jurisdictions have similar phone taxes, but only Montgomery County has a local levy on mobile models -- a flat 92.5-cent monthly service fee.

Taxing cell phones owned by subscribers with billing addresses in the city could raise as much as $2 million a year, D'Adamo said. The East Baltimore councilman estimated that an additional $1 million could come from beepers.

Mayor Kurt L. Schmoke and other council members have taken a wait-and-see approach to taxing the popular gadgets. However, they promised to give serious consideration to any proposals to help avoid the yearly replay of budget troubles.

Now, city lawyers are trying to determine whether the city first would have to get permission from the state legislature.

Representatives of the three mobile-phone carriers in the Baltimore-Washington region -- Cellular One, Bell Atlantic Nynex and Sprint Spectrum -- were quick to denounce the local tax.

All three services said that higher taxes would make the phones less affordable and that customers could simply switch their billing addresses outside the city.

The services keep the number of their subscribers secret. Industry analysts said about 16.6 percent of the people in the nation own cell phones. In Baltimore, which has a population of 675,000, that rate would mean there are about 110,000 subscribers.

Pub Date: 4/10/97

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