The telecom sales tax for a big issue at the Connect Minnesota Broadband Summit last week. In short, the Legislature removed a longstanding sales tax exemption for telecom equipment. The industry, as you can imagine, was not happy. The sales tax exemption had figured into their business case scenarios and planning broadband deployment without it was restrciting expansion. During the State and Federal Policy panel someone asked about the chances of a return of the exemption. Representative Sheldon Johnson said no chance. Senator Matt Schmit said well maybe.

Well is turns out that at least right now, more people are leaning toward Senator Schmit’s option – although at the conference more people seemed to lean with Representative Johnson. The difference was that the day after the conference The State announced a 1.1 billion Minnesota budget surplus.

The Associated Press reported…

Dayton told reporters that if the surplus holds up when the estimate is updated in February, he’ll recommend that more than half go to tax cuts, including the repeal of some new sales taxes adopted just this spring.

The article went on to mention the telecommunications tax specifically…

The tax plan adopted last spring created a new fourth bracket on high incomes and significantly increased the per-pack cigarette tax. Lawmakers also imposed sales taxes on farm equipment repairs, telecommunications supplies and commercial warehousing services.

An article in the Minneapolis Stat Tribune seems to support the optimism for the telecom industry…

Dayton is believed to be most inclined to repeal a storage/warehouse tax; a tax on repairs that will hit hardest small businesses that don’t have their own maintenance staffs, and a telecommunications equipment tax. Dayton didn’t advocate for these taxes, but signed them into law last spring.

But also notes that nothing is set in stone – or will even be formally suggested until 2014…

Dayton’s aides say he may ask the DFL-dominated Legislature to repeal or at least dilute three business-to-business taxes passed last spring. In an interview, Minnesota Revenue Commissioner Myron Frans, a tax lawyer and former small-business CEO, said there will be no specific proposals to legislative leaders until the February budget forecast.