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A proposal to tax text messages in California has been withdrawn because of strong opposition.
The California Public Utilities Commission (CPUC) put forward the proposal in November 2018. The tax was meant to be added on top of consumers’ monthly mobile phone bills.
The CPUC based its tax proposal on a California state law. Under that particular law, telecommunications services can be charged with taxes. The collected fees are put toward funding projects that aim to make phone services available in rural areas and to low-income consumers.
But after receiving backlash from different groups, the CPUC decided not to pursue its tax proposal. One of those groups is the Cellular Telecommunications Industry Association (CTIA), a US organization of wireless carriers and manufacturers. It claimed that the tax would have adverse effects on telecommunications companies. With the tax, those companies will have difficulty competing against online text messaging apps, which are excluded from the tax.
The Federal Communications Commission (FCC), a US agency that regulates television, radio, and phone services, sided with the CTIA. The FCC classified text messaging as an information service instead of a telecommunications service, making the CPUC powerless in imposing the tax.
The withdrawal was met with positive feedback on social media. Many residents in California were relieved about the CPUC’s decision because they would have one less financial burden to worry about. A California state politician, who earlier criticized the CPUC for its proposal, gleefully announced the decision on his social media page. He said that he would be watching the CPUC for any similar proposals in the future.