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Mobile Giants Try to Pass Tax Bill to Customers

1:56 am on December 1, 2005 | Category: Business, Telecom Services, Wireless

Five leading American cell phone providers have joined forces to sue the state of Kentucky, and oppose a controversial new tax that is set to come into effect on January 1st.

Cingular, Verizon, Sprint, T-Mobile, and NPCR are intent on avoiding the 1.3% tax on their gross revenues, which was passed earlier this year by the stateâ€™s General Assembly.

Although it appears that there is little the companies can do to prevent the tax from coming into effect, they are asking that a federal judge strike down a legal provision that prohibits them from passing the tax on to customers.

The five wireless giants, which together account for about 80% of the cell phone plans in Kentucky, obviously believe that they shouldnâ€™t have to be the ones to foot this latest bill resulting from the telecommunications act. Instead, they would much rather see the end user paying these new taxes.

Such a move by the companies will likely excite much criticism from the companies, and possibly incite more support for alternative services such as TracFoneâ€™s low-cost prepaid wireless solutions.

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