'Secret' Phone Tax Bad for Wisconsin Consumers, Business

SUN PRAIRIE, Wis. - Wisconsin residents and businesses are in danger of being saddled with a new phone tax under consideration by the Wisconsin legislature. As part of its budget deliberations, the legislature is considering a proposal to allow municipalities to assess a 2 percent gross revenues tax on all telecommunications carriers.

''The 'secret' phone tax concocted by the legislature would only raise rates for all phone customers and deter investment in Wisconsin's telecommunications infrastructure,'' said

John O. Dudley, Verizon Great Lakes Region president. ''Phone companies would be prohibited from showing the tax on consumer bills, but there's no doubt that it would be passed on to telephone customers.''

Wisconsin organizations representing thousands of residents and businesses also have warned about the consequences of the proposed legislation and urged its defeat. They include the Metropolitan Milwaukee Association of Commerce, the Greater Milwaukee Committee, the Wisconsin Grocers Association, the National Federation of Independent Businesses, Wisconsin Manufacturers & Commerce and Connect Wisconsin.

''Wisconsin residents already pay more taxes than those in all but two states in the nation,'' Dudley said. ''There's no reason to add to their tax burden.''

Some 97 percent of households in Wisconsin have phone service, so the proposed tax would be paid by nearly everyone.

Under the budget amendment, each of Wisconsin's cities, villages and towns could establish its own tax on gross revenues of all telecommunication companies, including local, long distance, cellular and DSL (digital subscriber line) service providers. The legislation would require that the tax be kept secret from consumers because telecommunication providers would not be allowed to show the tax on consumer bills.

''This tax would be a double whammy with many people paying the tax several times each month,'' Dudley said

The state's telecommunications industry already pays its share of taxes. Last year, telephone companies paid roughly $80 million in property taxes. This is in addition to income, payroll, sales, unemployment and excise taxes.

''New taxes will mean higher phone rates, fewer jobs for Wisconsin workers and decreased investment in modern telecommunications equipment,'' Dudley said. ''Phone customers who don't want to pay higher taxes and subsequently pay higher phone bills should contact their legislators and the Governor. This harmful proposal should be defeated now.''

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Verizon Communications (NYSE:VZ) is one of the world's leading providers of communications services. Verizon companies are the largest providers of wireline and wireless communications in the United States, with 112 million access line equivalents and 27 million wireless customers. Verizon is also the largest directory publisher in the world. A Fortune 10 company with approximately 260,000 employees and more than $65 billion in annual revenues, Verizon's global presence extends to 40 countries in the Americas, Europe, Asia and the Pacific. For more information on Verizon, visit www.verizon.com