Sending a text could cost California residents more following proposed tax

December 12, 2018

Imagine having to pay a fee to send text messages from your phone, in addition to your regular phone bill. That’s the tax that California’s Public Utilities Commission is currently considering.

At the moment, California residents are only taxed for voice calls made with their mobile phone and landlines. The fees from these calls go into Public Purpose Programs, which provides telecommunications services to low-income residents.

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But as residents make less phone calls, revenue to this program is decreasing. The state’s revenue for these programs has dropped from $16.5 billion to $11.3 billion in the last six years, according to USA Today.

As revenue decreases, the budget for these programs increases. The budget for subsidizing telecommunication and information services has gone up to $998 million as of 2017. In 2011, the budget was only $670 million.

The reason for this is that the expectations of what technology is needed to communicate with others is changing. As texting becomes the standard, more people are expected to have access to texting services—along with broadband internet and phone calls.

As a result, the budget increases and the state of California is looking for ways to increase revenue to these Public Purpose Programs.

There are a lot of arguments against the proposed tax. For one, messaging apps such as Apple iMessage and Facebook Messenger wouldn’t be subjected to the fee. It would only apply to texts sent through each resident’s wireless carrier such as AT&T, Verizon and many more.

The Cellular Telecommunications Industry Association, which represents the U.S. wireless communications industry, makes the argument that it’s “harmful” to implement a law that can’t be applied to all messaging services.

“Subjecting wireless carriers’ text messaging traffic to surcharges that cannot be applied to the lion’s share of messaging traffic and messaging providers is illogical, anticompetitive and harmful to consumers,” the CTIA said in their filings.

The proposed tax is still up for debate, with California scheduled to make their decision a month from now.

What do you think of the proposed texting tax? Sound off in the comments below!