California lawmakers want to tax text messaging next

By TaxesFOXBusiness

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Text messaging could be the next victim in California’s push for higher taxes.

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State regulators are considering charging a fee for text messaging on mobile phones in order to help programs that make phone service accessible to the poor, according to a report from the Mercury News. The proposal, which is scheduled for a vote next month by the California Public Utilities Commission, faces opposition from the wireless industry and business groups.

It’s unclear how much individuals would have to pay for texting services, but according to the Mercury News, it would likely be billed as a flat surcharge per customer, not a fee a per text.

In a lengthy report, the California Public Utilities Commission lays out the reasoning for the texting tax, revealing that California’s total reported revenue from the state telecommunications industry declined to $11.2 billion in 2017 from $16.5 billion in 2011, while the Public Purpose Program budget has soared to $998 million in 2017, compared to $670 million 2011. The revenue from the telecommunications industry is used to fund the program.

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“This is unsustainable over time,” the report said.

Business groups estimated the new charges for wireless customers could equal about $44.5 million a year. For customers, it could end up costing more than $220 million, because the proposal allows the charge to be retroactively applied for the past five years.

Critics, however, lambasted the proposal as unreasonable and warned that it set a dangerous precedent by allowing companies to tax retroactively.

California already has high taxes, coupled with an overall high cost of living. According to the Bay Area Council, a San Francisco-based business association, 46 percent of residents in the Bay Area are fed up with the cost of living and would consider relocating.

A study published by the Federation of Tax Administrators found that California has the highest personal income tax floor, at 13.3 percent.

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