Resolution Urging Congress to Update Tax Treatment of Cell Phones
WHEREAS, in 1989 Congress passed a law treating cell phones or similar telecommunications equipment as “listed property” that an employer must report as income on an employee’ W-2 unless the employee satisfies onerous rules documenting the cell phone or equipment is used for business more than 50% of the time; and
WHEREAS, the Internal Revenue Service (IRS) confirmed this tax treatment of employer-provided cell phones or similar telecommunications equipment as a “fringe benefit” in a 2005 technical guide; and
WHEREAS, it is expensive and difficult for employees to maintain logs listing every call, the time of such calls and the purpose of such calls; and
WHEREAS, the specter of IRS agents continuing to raise the issue of cell phone calls and documentation on audits has prompted many employers to stop providing cell phones to employees but instead give them taxable cell phone allowances; and
WHEREAS, the Tax Code places no similar rules governing personal calls made on land-line telephones; and
WHEREAS, there significant advances in the reliability, versatility, ubiquity, sizing, and pricing of cell phone and other telecommunications technologies in the last 20 years; and
WHEREAS, the Tax Code’s treatment of cell phones and similar telecommunications equipment is outdated, does not correspond to technological advancement in wireless, fails to reflect the integration of wireless technology in American businesses, and is ill-suited to the 21st Century American economy;
NOW THEREFORE BE IT RESOLVED, that [insert state] urges the United States Congress to repeal the Tax Code’s treatment of cell phones and similar telecommunications equipment as listed property and its burdensome reporting requirements for employees.