Frequently Asked Questions (FAQs)

Regarding
Taxation of Wireless Services
1. What taxes are applied to my cellular bill?
Response: The following taxes are imposed on cellular telecommunication services: federal excise tax (3%), state 911 surcharge tax (0.72%), and a local utility users tax (which may vary depending on the individual public agency). There are also a number of surcharges, which are imposed by state and federal regulatory agencies to fund various programs [Federal Universal Service Fund (varies from 0.10% to around 1%; State PUC Surcharge (0.11%); DEAF Surcharge (0.28%); ULTS Surcharge (0.5%); CHCF-A Surcharge (currently 0%, but likely to increase in future); CHCF-B Surcharge (2.6%); and the CA Teleconnect Fund Surcharge (0.001%)].

These taxes and surcharges may be separately stated on your bill, or lumped together, depending on the billing practice of your carrier. Please contact your carrier if you would like to know the exact break-out of such taxes and surcharges.

 
2. What should I do if I believe I am being improperly assessed a local utility users tax by a jurisdiction where I do not reside?

Response: This type of error usually occurs when your carrier improperly assigns your account (based on your billing address) to the wrong taxing jurisdiction due to erroneous boundary information provided by the taxing jurisdiction or by the carrier. Please advise your carrier of this jurisdictional error and request a correction. An error can also occur when your billing address is different than your "place of primary use". If this is so, please advise your carrier of your "place of primary use", so that you will be assigned to the correct taxing jurisdiction.

 
3. If I have other questions regarding the application of the local utility users tax to my cellular bill (e.g., refund, exemption requirements, etc.), who should I contact?

Response: If you have a local tax question, please direct your inquiry to the contact person or address listed above under "City and County Contacts".

 
4. Who decides what aspects of my cellular bill are subject to the UUT?

Response: Basically, the local utility users tax ordinance follows the same tax application rules as the federal excise tax, which is currently determined by the Internal Revenue Service. If the federal law is repealed, the local taxing jurisdiction would make such determinations using the federal body of law that existed at the time of the repeal. Regarding cellular "packages", California public agencies have recently agreed to uniformly follow the same tax application rules for "packages" as prescribed by the recent federal Mobile Telecommunications Sourcing Act of 2000.

 
5. What should I do if I do not get a satisfactory answer to my questions from my carrier or the local public agency regarding the application of the local utility users tax to my cellular bill?

Response: Please contact the Utility Users Tax Technical Task Force (a voluntary organization of public agencies with UUT ordinances) by sending an e-mail to: Frances Medema (MedemaF@cacities.org).

 
6. If I am improperly assessed a local utility users tax, how may I receive a refund?

Response: Each public agency has its own rules for refunds. You may consult the specific UUT ordinance or direct your inquiry to the contact person or address listed above under "City and County Contacts".

 
7. What is a utility user tax collected for?
Response: Utility users tax revenues are used to pay for essential municipal services such as police, fire, libraries, and roads. In some cities, the UUT provides up to 25% of the city's total revenue.