Tax on txt begins tmrw in Sacto.
A voter-approved utility tax that includes a larger variety of communications services - including text messages and broadband phone services - goes into effect Friday in Sacramento.
Here's the 411: The tax will now include text messages, but will not tax Internet access or digital downloads such as e-mail, digital books, music and ringtones, city documents state.
Voters approved Measure O, the "Utility User Tax Reduction and Fairness Measure" 64 percent to 36 percent on Nov. 4. The utility tax goes into effect Friday, said Stephanie Mizuno, assistant city clerk.
The tax update also includes lowering the user's tax for land-line and cell phones from 7.5 percent to 7 percent.
What does this mean @TEOTD? A monthly $50 land-line bill now costs 25 cents less, but a monthly $30 bill for phone service over the Internet now costs the user $2.10 more a month, city officials said in an earlier interview with the Bee.
The 7 percent citywide tax will be reflected on Sacramentans' phone bills, be it land-lines or cell phones.
Russ Fehr, city treasurer, said the amount someone is taxed will vary depending on what types of communications services they have with their service provider.
In other words, if you have a BlackBerry with unlimited texting and phone calls, your monthly bill is higher than someone with a cell phone plan of $29.99 per month, therefore the city utility tax on the BlackBerry bill will be higher.
Traditional cell phone users, who use a land-line and a cell phone for only the occasional call, likely will see a tiny decrease in their bill because of the five-tenths of a percent the utility tax decreased, he said.
"The vast majority of households will see a rate reduction," Fehr said. "A few households and businesses will see an increase."
While the tax takes effect Friday, service providers have up to 60 days in which to include the tax on users' bills. City officials likely won't begin to see whether the tax is generating more revenue for at least a year and a half, Fehr said.
"We don't know if we're going to end up better or worse off," he said.
But city officials had to take the gamble - if the measure didn't pass, the city could have lost up to $12 million in revenue.
For more information about the utility tax, go to http://www.cityofsacramento.org/cityman/utility_tax_measure_O/
Call The Bee's Niesha Lofing, (916) 321-1270.
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