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Tax Treatment of Employer-Provided Cell Phones

Floor Speech

By:
Date:
Location: Washington, DC


TAX TREATMENT OF EMPLOYER-PROVIDED CELL PHONES -- (Senate - October 02, 2008)

Mr. KERRY. Mr. President, Senator Ensign and I would like to engage in a brief colloquy with the distinguished chairman and ranking member of the Finance Committee, Senators BAUCUS and GRASSLEY, regarding legislation we have sponsored to fix an archaic provision in the Tax Code that adversely affects employees and businesses across the country. Under a little-noticed provision added in 1989, cell phones, blackberries, and similar devices are treated as ``listed property.'' As a result, employees must keep detailed records of all calls made on their employer-issued cell phones--indicating whether they are personal or business-related--or have the value of the phone and phone service included as taxable income.

The current law provision was added at a time when cell phones were considered a luxury item. Now, they are a common and necessary part of conducting everyday business. Imposing strict substantiation requirements on the business use of cell phones and blackberries is burdensome and highly impractical given their frequent use in a fast-paced global environment. To protect tens of thousands of employees and their employers from potential audits and tax liability, we should pass legislation as soon as possible next year to fix this problem.


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