The Maryland Tax Court thwarted an attempt by several wireless carriers to overturn cell phone taxes imposed by two Maryland counties. The court ruled Baltimore City and Montgomery County are within their rights to levy taxes on cell phone and landlines.
Baltimore County instituted a $3.50 a month fee on mobile phones and landlines in 2004, while Montgomery County started charging a $2 wireless fee in 2003. Wireless carriers T-Mobile USA, Cingular Wireless, Sprint and Verizon Wireless challenged the fees, saying the state is the only entity that can charge a sales tax.
The tax court, however, disagreed with the carriers' argument, saying in its decision, "A flat tax on a telephone line, which does not vary depending on customer usage, is an excise tax rather than a sales tax under Maryland law."
The ruling upholds the fees now being imposed by the two counties.
The carriers could not be immediately reached for comment on the ruling.