The case could have cost taxpayers hundreds of millions
SAN JOSE — A court decision rebuffing three of America’s largest telecommunications companies has temporarily saved California residents and business owners from potentially having to cough up hundreds of millions of dollars in extra taxes.issued by the Sixth District Court of Appeals, Santa Clara County prevailed over AT&T, Sprint and T-Mobile, which had argued that they pay unlawful and excessive property taxes for their infrastructure under state law.
The county’s attorney said the fight isn’t over and he expects an appeal to the California Supreme Court, which considers only a small fraction of submitted cases. The wider legal battle involves 34 other counties, but those cases were put on hold pending a court decision involving Santa Clara. Central to the case is whether counties could continue imposing higher taxes on telecommunications equipment — including telephone wires, switches, power distribution systems and other infrastructure — than non-utility property such as homes and small businesses. According to the appeals court ruling, the county levied a 1.04 percent “debt-service” tax on the telecommunication companies’ equipment in 2014 — as compared to a 0.2 percent tax for the non-utility property.
In the Sixth District’s decision last week, the court ruled that the utility companies’ interpretation of the state constitution was inaccurate, and that it does not require utility companies’ property to be taxed at the same rate as other infrastructure. Local jurisdictions, have the right to set the rates themselves, the court ruled.
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