Proposed California Law Will Implement Tax for Sending Text Messages

Enjoy texting? Well, that could soon cost you an extra few bucks on your bill. Regulators in California have proposed a new law to raise more money for expanding internet connectivity by adding a tax to phone bills for utilizing text messaging services. Proposed by the California Public Utilities Commission, the new surcharge would include a monthly fee based on a cellular bill on top of whatever fees you pay to your cellular provider. The exact structure of the fees would vary by carrier.

A vote will take place on January 10, 2019, and as expected, is garnering heavy opposition by both consumers and industry trade groups like the CTIA, which represents telecom companies like AT&T, Spring, and T-Mobile. CTIA representatives argue that the measure would impose unfair burdens on the consumers, adding an unnecessary fee to a service that does not need to be encumbered with more charges.

The bill could face even more complications thanks to a new Federal Communication Commission ruling that classifies text messages as an “information service” similar to email. The CTIA is using this ruling to argue that any imposed tax on texting would go against federal law. In its filing, the CTIA states: “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, anti-competitive, and harmful to consumers.”

Proponents of the bill cite the need to fund programs for low-income Americans, and that a tax on texting could potentially bring in an extra $44.5 million a year in California. IIf the law is passed, it would also require the commission to consider how it affects other popular messaging services like iMessage and WhatsApp, which already make up the bulk of messaging traffic for Americans. A texting tax could also drive away consumers from using traditional SMS messaging altogether, leading to a severe drop in the proposed $44.5 million figure estimated by the bill’s proponents.