Multi-Industry Letter Supporting S. 2668, the MOBILE Cell Phone Act of 2008
July 8, 2008
Senator Max Baucus
Chairman
US Senate Committee on Finance
219 Dirksen Senate Office Building
Washington, DC 20510
Senator Charles Grassley
Ranking Member
US Senate Committee on Finance
219 Dirksen Senate Office Building
Washington, DC 20510
Dear Chairman Baucus & Ranking Member Grassley:
The undersigned companies and associations strongly support S. 2668, the MOBILE Cell Phone Act of 2008. This bill has broad bipartisan support and will modernize the tax code by removing cellular telephones, BlackBerries and similar communications devices (hereinafter "cell phones") from application of the listed property rules, which impose special, more burdensome substantiation requirements than are imposed on other business property. This proposal recently passed the House as part of H.R. 5719, the Taxpayer Assistance and Simplification Act of 2008.
Under current law, an employee must include the value of an employer-provided cell phone in income unless strict substantiation requirements are met demonstrating that the phone or BlackBerry is predominantly used for business. An employer's deductions for cell phones are also predicated on satisfying these burdensome substantiation rules.
These strict substantiation requirements were added at a time when cell phones were considered a luxury item. Now, their use in business, government and nonprofits is common-place and essential in the modern world. Meeting these strict substantiation requirements burdens the business use of cell phones, dampens the use of advanced technology and is impractical given their frequent use in a fast-paced global work environment. Such detailed documentation is not required for use by an employee of his office phone. There is no reason that cell phones should be subjected to stricter substantiation requirements.
Also, the cost of cell phones and wireless service has decreased significantly since the substantiation requirements were adopted. Thus, taxpayers are subject to significant compliance burdens to monitor a relatively small potential fringe benefit, if any. As with other business property, taxpayers must still be able to demonstrate the business use of the cell phone.
We strongly support including this legislation on a Senate tax bill that will become law as soon as possible.
Sincerely,
American Association of Crop Insurers
American Association of State Colleges and Universities
American Council on Education
American Institute of Certified Public Accountants
Chancellors Office/California Community Colleges
CTIA – the Wireless Association
Government Finance Officers Association
International City/County Management Association
Independent Sector-the leadership forum for charities, foundations, & corporate giving programs
National Association of State Universities and Land-Grant Colleges
National League of Cities
National Association of Counties
National Association of Manufacturers
National Association of Realtors
National Association of State Auditors, Comptrollers and Treasurers
National Association of College and University Business Officers
National Association of Wheat Growers
National Corn Growers Association
National Conference of State Legislatures
National Conference of State Social Security Administrators
National Education Association
National Farmers Union
National Federation of Independent Business
National Retail Federation
National Sorghum Producers
North American Millers' Association
Organization for the Promotion and Advancement of Small Telephone Companies
Retail Industry Leaders Association
Rural Cellular Association
Rural Telecommunications Group
Telecommunications Industry Association
The Business Roundtable
United States Chamber of Commerce
United States Telecom Association