Debate Over Cellphone Taxes

Many users come at the occupation tax on the cellphone like Adam White does. "I don't want to pay more taxes. I want it to go away."

The surcharge is a monthly line item on the bill. Last month -- I paid $2.54 to the city of Omaha. The cellphone company collects it. We pay it.

It's expected to bring in 16.5-million a year in revenue for Omaha.
Lincoln - $8-million. Money that is used for city services.

Some lawmakers believe the tax unfairly targets a specific business -- in this case, phone companies.

Lyle Williamson with Verizon Wireless says, "We're concerned more and more cities in Nebraska will think of this as a lucrative revenue in the future."

If you add up all the telephone taxes including the six-percent or less taken by many cities -- it totals more than twenty percent.

John McCollister with the Platte Institute says, "To have the number one rating for telephone taxes is not a good thing."

The city of Omaha which stands to lose millions if the occupation tax is phased out in a few years -- says it's not a good option to replace the tax with another, more unpredictable revenue like sales tax or property tax.

Omaha Finance Director Pam Spaccarotella says, "In order to be viable, cities need more than one revenue source."

The League of Nebraska Municipalities want the bill to fail. Executive Director Lynn Rex says, "It is a very typical and standard way for municipalities to raise revenues."

The cellphone tax isn't the only occupation tax Omaha collects. It also includes the land line phones, rental cars, hotel/motel tax, taxis, heli-pads, go-carts, among others. Add it up and it comes to $42-million worth.

As one senator pointed out, if the city raised the local option sales tax by a half-penny --- it would raise $45-million and be a wash and the occupation taxes could go away. But many mayors said they need revenue diversity.

The bill is in the revenue committee. No word on when there will be a vote to move it to the floor.

In a footnote -- Omaha mayor Jim Suttle met with 14-lawmakers privately on Friday to talk about this issue and several others that could take away tax dollars.

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