This week’s question comes from Tyler, a sales manager. We provide all our sales reps cell phones for business and personal use. In the past, the sales reps had to pay income tax on their personal-use portion of the cell phones. Now I hear they don’t have to pay on personal-use portion anymore. What is the status of taxation of cell phones? Answer: Effective for tax years beginning after December 31, 2009, cell phones are no longer designated as listed property.

Cell Phone Change Effected by Small Business Jobs and Credit Act of 2010

With the signing of the Small Business Jobs and Credit Act of 2010 (HR 5297) into law by President Barack Obama, the definition of listed property no longer includes “any cellular telephone (or other similar telecommunications equipment)”. The impact is that employers no longer must include the value of the personal-use portion of cell phones in an employee’s gross income.

Contact Vision Payroll for Further Information

Contact Vision Payroll if you have further questions on the changes to the classification of cell phones.