The Regulatory Mix, TMI’s daily blog of regulatory activities, is a snapshot of PUC, FCC, legislative, and occasionally court issues that our regulatory monitoring team uncovers each day. Depending on their significance, some items may be the subject of a TMI Briefing.
A recent report by the Tax Foundation finds that the national average wireless tax and fee burden is “at its highest level ever – nearly 18 percent of the average U.S. wireless customer’s bill. This is an increase of nearly one percentage point over 2014 levels and is almost two and one half times higher than the general sales tax rate imposed on most other taxable goods and services.” According to the report, while competition has reduced wireless monthly service bills by nearly 7%, tax rates increased from 15.5% to 18%. Wireless consumers pay about $5.8 billion annually in excessive state and local taxes and fees, defined as taxes and fees in excess of the normal state and local sales taxes imposed on the purchase of other goods and services. According to the report, consumers in Washington state pay over 25% of their bills in taxes and fees; consumers in Nebraska, New York, Illinois, Missouri, Rhode Island, Florida, Arkansas, and Pennsylvania pay total taxes and fees in excess of 20% of their bills. Consumers in Oregon and Nevada continue to enjoy the lowest wireless taxes. The report recommends that states study their existing communications tax structure and consider policies that transition their tax systems away from narrowly-based wireless taxes and toward broad-based tax sources that do not distort consumer purchasing decisions and do not slow investment in critical infrastructure like wireless broadband.
Effective January 1, 2016, prepaid mobile telephony services will be subject to a telephone service surcharge (prepaid MTS surcharge) that will include the separate assessments currently made on prepaid wireless service for: (1) the six California Public Utilities Commission telephone surcharges and the PUC reimbursement fee; and (2) the Emergency Telephone Users (911) surcharge. The new prepaid wireless fee will be the combined total of the prepaid MTS surcharge and the applicable local charges and will be imposed as a percentage of the sales price of each retail sale of prepaid wireless service in California. Despite the unified collection, prepaid providers will be required to separately remit the appropriate portion of the fee to each of the various government entities involved. TMI Briefing Service subscribers see Briefing dated 1/29/15 or go to the California Board of Equalization for more information.
The PUC will accept additional /reply comments on or before December 4, 2015, in the inquiry into amendment of its Chapter 880 (pole attachment) rules. The PUC opened the inquiry to examine issues raised by the Office of the Public Advocate (OPA) with a focus on facilitating the use of facilities by carriers able to offer and expand broadband throughout the state. TMI Briefing Service subscribers see Briefing dated 9/29/15.