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December 13, 2018 | California Proposes Tax on Text Messages, Retroactive 5 Years

Mike 'Mish' Shedlock

Mike Shedlock / Mish is a registered investment advisor representative for SitkaPacific Capital Management. Sitka Pacific is an asset management firm whose goal is strong performance and low volatility, regardless of market direction.
California regulators want to tax text messages to fund programs that bring connectivity to underserved residents.

Please consider California Proposes a Plan to Tax Text Messages.

A new surcharge proposed by the California Public Utilities Commission (CPUC) wouldn’t be a per-text tax, but a monthly fee based on a cellular bill that includes any fees for text-message services.

The 52-page proposal by CPUC Commissioner Carla J. Peterman lays out the details of the plan, and says the state’s Public Purpose Program budget is going up while incoming fees to fill it are decreasing

According to the CPUC, the charges go to a number of different programs, including 911 services, subsidized phone service for low-income residents, and equipment for deaf and hard-of-hearing users.

The proposed plan could be complicated by a new Federal Communication Commission ruling. On Wednesday, the FCC approved a new rule that classifies text messages as an “information service” like email. Proponent of the rule say it will give carriers the ability to crack down on spam messages, and critics say it could lead to carriers censoring messages.

The CTIA argued in a legal filing submitted Wednesday that if texts are an information service, then the CPUC doesn’t have authority over them and can’t add on surcharges. It claims the proposal would go against federal law.

Retroactive Five Years

Mercury News notes that “under the regulators’ proposal the charge could be applied retroactively for five years.”

Lovey.

I have a better idea. Stop giving away “free” phone services. Then you won’t have to collect taxes to pay for them.

Mike “Mish” Shedlock

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December 13th, 2018

Posted In: Mish Talk

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