A pair of law firms filed a class-action lawsuit in San Diego Superior Court today against the city of Chula Vista over a controversial tax that the city has for years been charging on cell phone users.
The lawsuit claims that the city has been illegally charging the tax and should pay back cell phone users in the city all the taxes it has collected, plus interest.
Thomas Penfield, one of the attorneys bringing the lawsuit, said it’s unclear yet just how much money could be at question in the case. He said the city of Chula Vista has claimed it’s only liable for a maximum of a year’s worth of taxes, around $5.6 million, but that his firm will be asking for a refund of several years’ worth of the fees.
That could be a big blow to Chula Vista, which has slashed city services and laid off more than 100 employees in the face of a significant decrease in property taxes. The city used the threat of litigation over the tax as justification for further cutting back services late last year. It stopped spending the revenues in November and has been stashing it away in case it was ordered to pay it back.
The small utility tax, which I first wrote about back in February, was introduced in 1970 and is levied on users of telephones, electricity and other utilities.