The end of the phone tax that funded the Spanish-American War may impact California. According to this story in the San Jose Mercury-News, many local entities in California tied their telecommunications tax to the federal tax. Some of the ordinances have a clause that states if the federal tax becomes invalid, then the local tax will end.
Nervous local budget directors are checking their ordinances and seeing if they contain that clause. Compounding the matter is that there are several lawsuits challenging the tax on different grounds. The lawsuits have been filed by telecommunication providers, such as Verizon and AT&T, and community activists. In general, the previous challenges have alleged that the tax has no legal justification.
We’ll keep you informed.
Tags: TelephoneTax