Nov 3, 2009

Taxing Texting?

This is the first I have heard of this, but it would not surprise me to see more of this type of tax going forward.  I know our local income tax just went up, and it is costing us more than an additional $100 a month.

The city of Vallejo, Calif. is voting today on expanding utility taxes to include text messages, pager messages and VOIP calls. The measure would lump these together with gas, electricity, water and other utilities, while lowering the overall utility tax rate from 7.5% to 7.3%.

This follows the example set by Sacramento and 40 other towns in California which have added electronic communications to their taxable utilities, both to reduce the burden on those clinging to land-lines and to increase city revenue.

According to the San Francisco Chronicle, Vallejo's general fund has lost $18 million in the past two years. It declared bankruptcy in 2008.

While officials contend that the change will have only a minimal impact on a typical resident's utility bill, some locals are concerned that the measure opens up the door for taxes on other forms of communication not presently taxed.
As more and more people abandon land-lines, many communities will be looking to replace lost tax revenue by charging for text messages, voice-over-Internet calls, e-mails, and IM conversations.


  1. you know they are trying to tax bottled water and soda here in michigan. i will have to check my cell bill to see, but i am pretty sure we already pay the state sales tax on it.


  2. Taxing what amounts to speech.

  3. Hi Ken,
    They tried this in Santa Monica, too ... it was on the ballot last year, but the City tried to disguise it by making it appear like a special effort to save badly needed city programs (with little to no mention that it would be a tax on cell phone usage). I don't think it passed.


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