Guest opinion: I-172 seeks fairness in Charter's tax bill

2014-06-12T00:00:00Z 2014-06-13T17:34:08Z Guest opinion: I-172 seeks fairness in Charter's tax billBy GARY UNDERWOOD The Billings Gazette
June 12, 2014 12:00 am  • 

Fair treatment and the ability to compete without the government putting its thumb on the scale are values that Montanans support.

Government should not change the rules of the road mid-race. It should not raise taxes at the expense of innovation, private investment in broadband, and consumers. And it should not leave a company providing jobs to Montanans at a disadvantage to its competitors. Initiative 172 seeks to right those wrongs.

In 2010 the Montana Department of Revenue imposed a staggering 300 percent tax increase on companies that provide both telecommunications and video services. And to top it off, it did it retroactively for three years.

Absent a change, going forward companies like Charter Communications would pass along the multi-million dollar tax increase to subscribers. In addition, money that would have been spent on improving services and building out facilities will instead be used to pay the retroactive tax increase.

While everyone has to pay taxes, they should be applied fairly. The Montana tax code requires companies to pay 3 percent taxes on video equipment and 6 percent on telecommunications equipment. Therefore, for years, cable companies providing phone service paid 3 percent on video equipment and 6 percent on phone equipment.

What the Department of Revenue did was to mix apples and oranges and come up with all oranges. Under the new tax scheme, Montana imposes a 6 percent tax on all equipment of cable providers that also provide phone service, even equipment used for video, but it continues to tax satellite companies (cable companies’ competitors when providing video service) at 3 percent on their video equipment.

Charter is dedicated to Montana. We employ more than 850 people in Montana, and operate a national call center in Billings. We hope to hire more.

Charter has worked to improve the local network and its service offering, nationally Charter is adding 200 high definition channels and in most of Montana just doubled Internet speeds from 15 mbps to 30 mbps at no cost to our customers.

Charter is paying its fair share of taxes, including $5 million in franchise fees to Montana cities each year, which satellite companies don’t pay. That is in addition to the $1.1 million in telecom excise taxes, and $12.5 million in annual property taxes Charter paid in 2012.

Voting “yes” to Initiative 172 on the November ballot would put companies back on a level playing field. To be clear, it doesn’t raise anyone’s taxes – not CenturyLink’s, not the satellite companies’ and certainly not individual taxpayers’. It also doesn’t take money away from schools or any other public entity.

All Initiative 172 does is correct Charter’s video property tax rate to mirror the rate of the satellite folks at 3 percent. Our taxes for dedicated equipment that provides both broadband and phone service will continue to be taxed at 6 percent– just like other telecommunications providers.

And the benefits of Initiative 172 wouldn’t just apply to Charter. It would ensure any company that provides phone, broadband and video services will be treated equally in Montana. More importantly, it means that video subscribers won’t see a tax increase on their monthly bill.

Make no mistake, Charter is proud to be in Montana and wants to expand in the state. Sign a petition to put Initiative 172 on the November ballot. Let’s bring fairness and lower taxes to everyone.

Gary Underwood is a senior director of government affairs for Charter Communications in Fort Worth, Texas.

Copyright 2015 The Billings Gazette. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

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