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HB 0428 - Communications Services Tax
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Tracking Level: Support
Sponsor: William Werkheiser
Last Action: 2/25/2019 - House Second Readers
House Committee: Ways and Means
Assigned To:
Franchise FeesNext Bill
Larry RamseyNext Bill
Sales Tax-LocalNext Bill

Staff Analysis of the Legislation

This bill would create an entirely new taxation structure for telecommunications services. As amended in subcommittee, this complex bill includes the following:

  • Eliminate existing county and city cable franchise fees, city telephone franchise fees, and sales taxes on local telephone service;
  • Make “digital goods” – downloaded books, movies, music and the like -- subject to sales taxes (not currently taxed);
  • Exempt broadband and internet-access equipment from sales tax, up to a maximum of $80M per year;
  • Impose a new 2% state tax, and optional 2% local tax, on telecommunications services and prepaid wireless service. The local tax to be distributed to counties and cities based on the subscriber’s/customer’s address;
  • Impose a new 2% state-only tax on direct-broadcast satellite service (Direct TV, Dish Network);
  • Prohibit other local taxes or fees on communications services providers, other than ad valorem taxes, 9-1-1 fees, or other generally applicable fees/taxes.

Streaming services (Netflix, Hulu, etc.) are exempt from the communication services tax and sales taxes under HB 428 

Bill Summary from the State Site - Click for the State Summary Page / Click for Current Full Text

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