To Democrats, everything should be subject to taxation including free speech. California has plans to tax text messaging according to the Bay Area’s Mercury News. The specifics of tax collection are unclear. The likelihood being the tax will be applied as a flat tax with regulators saying it “could be applied retroactively for five years.” This could also mean higher cellular service charges.
Cellular service providers argue it could hurt their business because they would be subject to the new fees, though other messaging services such as Facebook and WhatsApp would not thus motivate consumers to opt for voice-only services to avoid the fee and to use other messaging services for their texting needs. On the personal level: What if a text message is a misdial or an unwanted transmission? What about spammers? Are the sender, the receiver or both taxed? Is there an issue with double taxation on one transaction? What if the State Constitution requires proportionality? Is retroactive application fair, reasonable or legally permissible?
This could also spell trouble for consumers, given privacy violations, hacking, censoring and banning found on social media platforms. There are issues lawmakers should consider before implementing such a questionable tax including its legality and constitutionality. Jim Wunderman criticized the idea saying, “It’s a dumb idea. 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.” He added that he is not aware of any program from local, state or federal authorities that currently imposes taxes on texting.
Legal filings from CITA representing the U.S. wireless communications industry note that “texting is an information service like email, not a telecommunications service subject to the commission’s authority.” Additionally, CITA has said “that the state utility commission ‘has no authority to impose surcharges on text messaging.’” So maybe email will also soon be on the list of services to be taxed? The Federal Communications Commission (FCC) is expected to weigh in on the matter with an affirmation of the CITA claims thereby putting a stop to the current version of the tax… temporarily.
This tax is not going away, particularly in light of what happened after businesses wrote to the FCC asking for the tax plan to be dropped. The Mercury News reported that “the commission in a proposed decision by an administrative law judge concluded ‘in principle that the commission should assess Public Purpose Program surcharges and user fees on all text messaging services revenue’ and that it has the necessary authority to do so.” In the meantime, the California Public Utilities Commission (CPUC) has come out against reports about the new tax arguing on Twitter that consumer bills will look the same, just with more of the fee being applied to text than to voice services.
The fight to kill a texting tax or an increase in texting surcharges is only beginning for Californians and by fiat for the rest of us. If the plan for such a tax or surcharge increase succeeds there, it will be attempted in the rest of the country as well. It is unclear what issues are associated with a company’s declaration of purpose or technology? Can a company unilaterally declare itself to be a utility, publisher, platform or something else? But what if the text crosses state lines? Does that mean California can now remotely tax texting in NH? What if sender and receiver are in NH but the server farm is in California? What about all the states in between, does this require apportioning the tax? In a cap doff to the South Dakota vs. Wayfair SCOTUS decision perhaps NH Attorney General McDonald should think about brief preparation as it appears likely to be used in the coming legislative session.