Title
County Counsel recommending the Board deny tax refund claims from Pacific Bell and AT&T Mobility, LLC for unitary property taxes paid for Fiscal Year 2022-23.
FUNDING: General Fund.
Body
DISCUSSION / BACKGROUND
Pacific Bell and AT&T Mobility, LLC are among several telecommunication companies pursuing refund claims against a number of counties, claiming that the statutory formula used to calculate its unitary tax rate is unconstitutional. Under Article XIII, sec. 19 of the California Constitution, the State Board of Equalization (“State BOE”) is charged with annually valuing and assessing the taxable property of a telecommunication company operating across the state as one unit. Property so valued and assessed is known as “unitary property.” The State BOE transmits to each county the assessed value of the portion of property located within the individual county. The County then applies the unitary tax rate to the allocated values in accordance with the calculation formula specified in Revenue and Taxation Code Section 100. County auditors have no discretion on their calculation of the unitary tax rate; they are required to impose a tax on unitary property using the rate calculation formula prescribed in Section 100.
The Board of Supervisors has received and denied multiple refund claims for taxes dating back to fiscal year 2014 from Pacific Bell, AT&T, Sprint, and T-Mobile. Refund claims have also been filed by the telecommunication companies across the state which were similarly denied by other counties. State law permits a taxpayer to challenge the denial of a claim for tax refund through a judicial action. Pacific Bell and AT&T had filed lawsuits challenging the unitary tax rate formula against other counties - Napa, Ventura, Placer, Riverside, Merced, and Santa Clara. In all these lawsuits, multiple appellate courts have rejected the telecommunication companies’ challenge to the unitary tax rate. Notwithstanding the adverse appellate rulings and denial of the petitions for review by the California Supreme Court, Pacific Bell and AT&T continue to litigate and recently filed a new complaint in Santa Clara County earlier this year.
On March 31, 2026, the Clerk of the Board of Supervisors received refund claims from Pacific Bell and AT&T Mobility, LLC for partial refunds of property taxes paid for Fiscal Year 2022-23 in the amount of $374,199 and $99,175, plus appropriate interest.
The property tax amounts at issue in the refund claims for Fiscal Year 2022-23 were properly calculated by the Auditor-Controller’s Office using the calculation formula specified in Revenue and Taxation Code section 100. The tax bill issued by the County to Pacific Bell and AT&T correctly state the unitary taxes owed based upon the mandated tax rate calculations under state law. Consequently, it is recommended that the Board of Supervisors deny the claims.
ALTERNATIVES
The County is required to tax all state assessed unitary property as set out in Revenue and Taxation Code section 100. If the requirements are not followed, the County will not be in compliance with state law.
PRIOR BOARD ACTION
Legistar file 21-0676 - May 4, 2021 - Board denied claims for tax refund from Pacific Bell and one from AT&T Mobility, LLC.
Legistar file 23-0908 - May 16,2023 - Board denied similar tax refund claims in prior years from Pacific Bell and AT&T Mobility, LLC.
Legistar file 24-0511 - April 2, 2024 - The Board denied similar tax refund claims in prior years from Pacific Bell and AT&T Mobility, LLC.
OTHER DEPARTMENT / AGENCY INVOLVEMENT
N/A
CAO RECOMMENDATION / COMMENTS
Approve as recommended.
FINANCIAL IMPACT
No fiscal impact in denying the claims.
CLERK OF THE BOARD FOLLOW UP ACTIONS
N/A
STRATEGIC PLAN COMPONENT
N/A
CONTACT
Janeth SanPedro, Assistant County Counsel