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FCC Should Pre-Empt States' Lifeline Taxes

The FCC has “the authority and the duty” to pre-empt state taxes on Lifeline benefits, such as the 19 percent tax imposed in Alabama (see 1408040048) and the 6 percent tax in Indiana, TracFone officials told Chairman Tom Wheeler, aides…

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Daniel Alvarez and Maria Kirby, and Associate Wireline Bureau Chief Trent Harkrader Friday, said an ex parte filing posted Friday in docket 11-42. State officials in Alabama didn't comment. The FCC lacks the authority to pre-empt Indiana’s 911 charge, a spokesman for the Indiana Attorney General’s office told us in a statement. “Contrary to TracFone’s claims, Indiana’s 911 charge does not reduce the benefit received by TracFone customers but instead funds enhanced 911 dispatching services which are essential to public safety,” the spokesman said. A November 2013 FCC notice of apparent liability for $4.6 million should be canceled, company President F.J. Pollak; General Counsel Richard Salzman; Mark Rubin, senior executive-government relations; and Greenberg Traurig’s Mitchell Brecher told the FCC. TracFone said no laws were violated and there was no overpayment to the company. TracFone also endorsed a number of Lifeline reforms, including requiring providers to retain and make available for audit applicants’ eligibility documentation.