California Considers Milking Cellphone Users With Controversial Texting Tax

Remembering when texting messaging was generally capped, and it would cost extra to go over your monthly allotment? For the most part, cellphone plans come with unlimited texting these days, though residents in California may still have to pay a bit extra as a part of a proposed tax on text messaging. Say what?

That's right folks, California has this kooky idea that a text messaging tax will fly with residents. And it might, depending on how it gets implemented. Rather than taxing individual text messages, or a set number of texts, the proposal calls for a predetermined fee to be added to a user's monthly cellphone bill.

The purpose of the tax is to fund programs that subsidize phone service for low income residents. It's outlined in a report (PDF) by the California Public Utilities Commission (CPUC), which points out that “only 23 percent of Americans had dial-up Internet access at home, and virtually no one had broadband" when the 1996 Telecommunications Act was introduced.

"In response to the 1996 Act, the FCC created new programs funded by the universal service fund to universalize voice service and increase broadband in schools, libraries and rural health care providers’ facilities," the report states.

At the risk of dating myself, I graduated high school in 1996. The Internet was fairly new back then, in terms of being mainstream and a part of everyday life. Using the state of the Internet in 1996 to justify charging a tax on text messaging in 2019 feels misleading to me.

"It’s a dumb idea," Jim Wunderman, president of business advocacy group the Bay Area Council, told the San Jose Mercury News. "This is how conversations take place in this day and age, and it’s almost like saying there should be a tax on the conversations we have."

Constance Gordon, a  spokeswoman for the CPUC, argues the tax on text messaging would be offset by a reduction in tax on voice services.

"From a consumer’s point of view, surcharges may be a wash, because if more surcharge revenues come from texting services, less would be needed from voice services,” Gordon said. "Generally, those consumers who create greater texting revenues may pay a bit more, whereas consumers using more voice services may pay less."

Some estimates peg the potential revenue from a text messaging tax at $44.5 million a year. The tax could also be applied retroactively for five years, which could balloon the collective amount for California cellphone users to $220 million.