From: Deirdre
Cummings, Legislative Director
RE: In Support of
Closing the Telecom Tax Loophole, HB 3075
MASSPIRG is a non
profit and non partisan public interested organization with 50,000
across the state. We are here today, testifying in support of HB
3075, filed by Representative Petruccelli, and other bills which
would level the playing field by closing the “Telecom Tax
Loophole”. MASSPIRG has long been an advocate of transparency,
accountability, and fairness in government and the private sector.
Closing this loophole would eliminate a long outdated “tax break”
for telecom companies and instill public confidence in our tax laws.
This hearing comes
just days before the deadline to file our taxes, and each year at
about this time, Bay Staters have an opportunity to reflect about
taxes and how our tax dollars get spent. Some may use the occasion to
complain about their taxes or government, others may object that
public structures like schools, roads, and health inspections need
more public funds than they receive. Whatever your perspective, Tax
Day and our tax bills are far more palatable when we feel confident
in the tax system; that there is inherent fairness in the system; and
no one group or individual gets unintended or unreasonable tax
breaks.
The telecom
loophole was first adopted in 1915 as part of a government initiative
to bring telephones to homes when the industry consisted of one phone
company, Bell Telephone, with publicly established profit margins and
a heavily regulated market. This loophole initially exempted
telephone companies from paying ‘rent’ for the use of telephone
poles. Today – over 90 years later – utility companies like
NSTAR are required to pay property taxes on above-ground poles and
wires, while telephone companies like Verizon are exempted.
The telecom
loophole totals approximately $78 million that is not going to vital
local services and more importantly puts pressure on cities and towns
to raise the tax burden for others and undermines the public
confidence in a fair tax system. Paying taxes are far more palatable
when the tax code is fair and does not allow for any one business or
industry to get an unfair advantage by not requiring them to pay the
same tax others must pay. Businesses
should thrive based on their efficiency and innovation, not their
opportunities for leveraging or maintaining ‘creative’ tax
breaks.
This loophole
should be closed. It serves no modern public purpose, prevents more
efficient use of public space, totals approximately $78 million
dollars and forces local assessors to waste taxpayer dollars chasing
after questionable claims by companies who are both utilities and
telecoms.
