Statements on Introduced Bills and Joint Resolutions

Floor Speech

STATEMENTS ON INTRODUCED BILLS AND JOINT RESOLUTIONS -- (Senate - February 26, 2008)

By Mr. KERRY (for himself and Mr. Ensign):

S. 2668. A bill to amend the Internal Revenue Code of 1986 to remove cell phones from listed property under section 280F; to the Committee on Finance.

Mr. KERRY. Mr. President, today Senator Ensign and I are introducing the MOBILE Cell Phone Act, Modernize Our Bookkeeping in the Law for Employees' Cell Phone Act 2008. The purpose of this legislation is to update the tax treatment of cell phones and mobile communication devices.

During the past 20 years, the use of cell phone and mobile communication devices has skyrocketed. Cell phones are no longer viewed as an executive perk or a luxury item. They no longer resemble suitcases or are hardwired to the floor of an automobile. Cell phone and mobile communication devices are now part of daily business practices at all levels.

In 1989, Congress passed a law, which added cell phones to the definition of listed property under section 280F(d)(4) of the Internal Revenue Code of 1986. Treating cell phones as listed property requires substantial documentation in order for cell phones to benefit from accelerated depreciation and not be treated as taxable income to the employee. This documentation is required to substantiate that the cell phone is used for business purposes more than 50 percent of the time. Generally, listed property is property that inherently lends itself to personal use, such as automobiles.

Back in 1989, cell phone technology was an expensive technology worthy of detailed logsheets. At that time, it was difficult to envision cell phones that could be placed in a pocket or handbag. Congress was skeptical about the daily business use of cell phones.

Technological advances have revolutionized the cell phone and mobile communication device industries. Twenty years ago, no one could have imagined the role BlackBerries play in our day-to-day communications. Cell phones and mobile communication devices are now widespread throughout all types of businesses. Employers provide their employees with these devices to enable them to remain connected 24 hours a day, seven days a week. The cost of the devices has been reduced, and most providers offer unlimited airtime for one monthly rate.

Recently, the Internal Revenue Service reminded field examiners of the substantiation rules for cell phones as listed property. The current rule requires employers to maintain expensive and detailed logs, and employers caught without cell phone logs could face tax penalties.

The MOBILE Cell Phone Act of 2008 updates the tax treatment of cell phones and mobile communication devices by repealing the requirement that employers maintain detailed logs. The tax code should keep pace with technological advances. There is no longer a reason that cell phones and mobile communication devices should be treated differently from office phones or computers.

I urge my colleagues to support this commonsense change.

Mr. President, I ask unanimous consent that the text of the bill be printed in the RECORD .

There being no objection, the text of the bill was ordered to be printed in the RECORD, as follows:

S. 2668

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