California proposes a new tax on text messages

California State Capitol building. Photo courtesy California Parks & Recreation Dept.

San Francisco – California may soon impose a tax on text messages to fund free and subsidized phone programs for low income residents.

The proposal, put forward by the California Public Utilities Commission, would impose the tax on any phone plan that includes the ability to send and receive text messages. (View the proposal here)

The CPUC says that under the law, everyone in California is supposed to have access to affordable voice phone services and that the six programs the state has created to pay for the “universal service” need new revenue.

The CPUC says the existing revenue streams have declines from $16.5 billion to $11.2 billion from 2011 to 2017, while the cost of the programs to provide voice services to the poor have increased from $670 million to $998 million.

It is unclear how many people have moved from paid phone services to one of the state subsidized services to cause the $328 million increase in costs over a 6-year period.

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