Telecom Industry Unhappy with Telecom Tax

I like to at least try to offer a balanced view on broadband policies. So I’ve been hoping to see something positive about the change in Minnesota’s telecommunications equipment sales tax but haven’t seen anything. In fairness, I suspect that the people who are intended to benefit aren’t keeping an eye on the issue. It will mean more money for the State in terms of tax revenue; I guess the question is will the tax prevent revenue by pricing projects out of budget?

The Minnesota Telecom Alliance has been keeping an eye on the issue – as obviously their members are on the frontlines of such purchases. They posted the following in a recent newsletter…

For many years Central Office Equipment has been exempt from State sales tax.  This is no longer the case.  While the legislation expanded sales tax exemptions for other items, it removed this important tool for telcos.  Repealing the COE sales tax exemption was originally proposed by the Governor in his first budget in February.  It was taken out of his revised budget later in the session.  As a result, it was taken out of the House’s tax bill but not the Senate’s bill.  As the bill went through the conference committee process, the MTA and other industry segments lobbied hard to keep the exemption.  A special thank you to Gene Wenstrom (Hanson Communications) and Dave Schornack (Arvig) for their many calls and text messages to Senators Skoe and Koenen.  It should be noted that repealing this sales tax exemption is completely opposite of the Governor’s own Broadband Task Force, which had recommended expanding the exemption to include all Broadband equipment purchases.

David C. Olson, president of the Minnesota Chamber of Commerce followed up the sentiment in a recent letter to the editor in the Duluth News Tribune

The telecommunications equipment sales tax will make it more expensive to supply broadband and technology that is critical for rural areas in Northeastern Minnesota and elsewhere in the state to compete and thrive. The tax on storage and warehousing could devastate this industry’s ability to compete in Minnesota and will result in sales tax on storage of agricultural inputs, too.

This entry was posted in MN, Policy, Vendors by Ann Treacy. Bookmark the permalink.

About Ann Treacy

I have a Master’s Degree in Library and Information Science. I have been interested or involved in providing access to information through the Internet since 1994, when I worked for Minnesota’s first Internet service provider. I am pleased to be a part of the Blandin on Broadband Team. I also work with MN Coalition on Government Information, Minnesota Rural Partners, and the American Society for Information Science and Technology.

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