The Senate Committee on Taxes heard two bills that talked about tax exemptions for broadband equipment. Right now, the exemption relies on how people are using the network. If it’s TV or telephone, they provider are exemption for taxes (for some equipment). If it’s something else, they are not. The bills would like to make the tax exemptions clearer and more inclusive.

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S.F. 0883Putnam

• • scs0883a-1 (PDF)
  • SF 883 (PDF)
  • sf0883(hf0175) fiber and conduit_2 (PDF)

Amendment is adopted.

As of Jan 2025, 395,000 households don’t have broadband. This bill would extend tax exemptions for fiber and conduit purchased (or leased) to deploy better broadband. The current exemption was extended in 2017.

Q: why use the word primarily?
Not sure

Brent Christensen from MN Telecom Alliance:

The language of the new bill – applies to all. If you take out the work primarily, it would only cover telephone or television based services. (To answer question above.)

Represents a wide range of broadband provides, We are for the bill.

What’s new?
The auditors have recommended different ways to handle taxation. Now we have had meeting with Dep of Revenue about how to apply this bill. Revenue thinks this has to do with finances. But in our world, we need to provide telephone service but what people ask for is broadband. We have asked them to come out with a new revenue note on the topic. They are waiting on legislation.

Whatever is paid in taxes, it not going to broadband deployment.

Amendment is laid over.

Next bill:

S.F. 0735Rest

Exemption modification for telecommunications or pay television services machinery and equipment

• • SF 735 (PDF)
  • sf735 telecom equipment_1 (PDF)
  • SF 735 CTIA MN Support Testimony (PDF)
  • Senate File 735 Support – MN Cable (PDF)

This is another “primarily” bill. The bill makes a small change to the law.

Why does this cost so much? It’s $6 million; the earlier bill was $2-3 million. What will be the impact of the change?

Sarah Pesick(?) from wireless industry (CTIA):

We are concerned about tax exemption for telecom/television services that are de facto broadband. This is problematic because Internet access comes from telecom and television (cable) services but from other means too (wireless/satellite). This would encourage continued investment in broadband.

It’s difficult to determine what services people are using via broadband so it’s difficult to recognize what portion is for telephone/TV services.

Scott Mackey (CTIA):

This bill doesn’t change what equipment is exemption – it’s changes which customers can take advantage of the exemption.

Q: Why are the fiscal notes different? There are two points that are different (Putnam assumes fiber is 6% of expenses – but 10 percent on the Rest bill).

Q: Are there advantages to the providers who getting the exemption now?
Event the traditional telephone companies are having difficulty knowing whether they qualify or not.

Bill is laid over.