California High Court Should Uphold Cellphone Tax, State Says

A state regulation that taxes customers on the undiscounted price of cell phones bundled with service contracts should remain in place, California’s tax agency told the high court.

Cell phone purchasers and the state tax agency disputed the validity of a state regulation that defines how to measure the gross receipts on which sales tax is assessed when a mandatory service contract is part of the bundle. In California, only tangible personal property, not services, are subject to sales tax.

• The state should impose sales tax on the full price on the consumers’ phones, even though they purchased the devices ...