IRS Says Your Wireless Device is No Longer Considered a Taxable “Perk”

Over the last several years, CTIA led an effort to educate the U.S. Congress about an arcane and outdated rule that said if an employee used their employer-provided wireless device for personal use, you had to report this use to the IRS as a taxable benefit.

Last year, as an addition to the Small Business Jobs Act, Congress passed the MOBILE Cell Phone Act that finally eliminated this outdated, counterproductive provision from the IRS Code.

On Wednesday, the IRS released a Notice clarifying how employees should treat personal use of employer-provided devices. The IRS said that a wireless device will be considered a non-compensatory fringe benefit if it has been provided “primarily for non-compensatory business reasons.”

In the real world, that means if your wireless device helps you do your job, it’s no longer considered a taxable benefit. Fantastic! I’m glad the IRS has finally had the last word on repeal of a rule that might have made sense in the late 1980s, but made no sense at all in today’s mobile, always-connected world.

Yet  even with this very positive development, there’s still much to be done to create a tax system that makes sense for a mobile, digital world. Two things that can help us get there are a bill that would put a stop to the discriminatory taxes and fees that are levied on wireless users and another bill that would create a national tax framework for digital purchases (e.g. e-books, apps, etc). I hope you will join our advocacy group,, to help us get these two measures passed by Congress as soon as possible.

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