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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.
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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 de...
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