Oppose SB112

For the most part, the Utah Legislature has spent very little time focusing on telecommunications issues. From my stance, that’s usually a good thing as when they focus on the sector, it is almost always to promote an anti-municipal telecom bill. This year, however, brings a bill worth opposing. SB112, sponsored by my own Senator, Wayne Neiderhauser, seeks to cut the state excise tax rate for cable television without making any adjustments for satellite providers.

Sen. Neiderhauser explains the rationale behind the bill: cable subscribers pay more taxes because of franchise fees, so the excise tax needs to be reduced so that the total of excise tax and franchise fees is equal between the two platforms. This, however, is an entirely illogical basis for providing the discount. Franchise fees are paid to a municipal government as compensation for accessing right-of-way. This includes being able to tear up city streets and erect poles in order to deploy this infrastructure. It has no relationship or bearing upon the state excise tax.

The end effect of this bill is to give cable television providers an unfair advantage in the tax system, enjoying a much higher benefit for the same level of taxation. If you want to cut taxes, that’s fine, but doing so in such a manner as to create a greater inequity in the tax structure is absurd. I encourage you to write your legislator to ask them to oppose SB112 as currently written.

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3 Responses to Oppose SB112

  1. Rob says:

    Jesse, I could not agree more. Moreover, because government gives only ONE cable company those rights-of way, cable companies are given the preferred status of government-sponsored monopoly. If this bill passes, they will get a whole lot more benefit for their taxes than the satellite companies.

  2. Doofus says:

    What? The Utah state legislature favoring one industry or specific business over another? Shocking, I say, simply shocking. I just can’t imagine why they’d do such a thing…not!

  3. Tuanische says:

    The reality is they should both have to pay the same excise tax. They are just going to pass it on to the consumer, but neither should have a lower or higher tax rate. It is called forced plunder when you do that. If Cable does have to pay more to get service to your home then they either need to figure out how to become more efficient or give better service. If the govt. picks the winner, we lose! You don’t need to look far see all of their failures.

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