California Wants to Tax Your Texts

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Posted by Abigail Marone on Wednesday, December 12th, 2018, 11:46 AM PERMALINK

California regulators want to tax your text messages. Even worse, the tax could be applied retroactively for five years and cost Californians more than $220 million for text messages they have already sent.

The plan will be discussed and voted on at next month’s California Public Utilities Commission meeting.

California is a famously high-tax state, with the highest income tax rate in the nation and a bottomless ability to come up with new ways to tax residents. 

Local business groups have already come out against the proposal. The Bay Area Council, California Chamber of Congress, and Silicon Valley Leadership group calculated that the tax could cost texters up to $44.5 million per year.

“The proposed text tax would be one of the most regressive to come from state bureaucrats in years,” argued Jim Wunderman, President of the Bay Area Council, in an op-ed. “The obvious consequence is that it would discourage some Californians — most likely low-income consumers — from texting. This is troubling since texting has become an almost universal activity in our society, and an important way for people to stay connected.”

Regarding the retroactive nature of the tax, the proposal states:

“As the Commission is affirming an existing policy, some telecommunications carriers may be liable for past amounts due for text messaging surcharges owed. All wireless carriers shall submit Tier 2 Advice Letters within 90 days from the date of this Decision, informing the Commission whether they have reported and remitted surcharges on text messaging services revenue. Wireless carriers who have not reported and remitted surcharges on text messages with the last five years shall identify the amount of intrastate surcharges owed on text messaging services and propose a payment plan in their advice letter filings. 

The California Public Utilities Commission is set to vote on the proposal atits January 10 meeting in San Francisco.

Photo Credit: Marco Verch

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