Franchise Fees (2)

Date of Last Recorded Action: 5/10/2021

HB 0243 OpposeTelecom - Another Attempt to Reduce Local Right of Way Fees - Another State Double Standard Lee Hawkins
2/13/2019 House Second Readers Energy, Utilities and Telecommunications --
2019/02/15 Report Franchise Fees General County Government Todd Edwards

This bill significantly reduces the amount of franchise and other fees that cities may charge for telephone/fiber/video wires running through their jurisdictions.  Ironically, the same limits do not apply to the State Department of Transportation’s rights of way, creating yet another state/local double standard in the administration of fees.  

HB 0428 SupportCommunications Services Tax William Werkheiser
2/25/2019 House Second Readers Ways and Means --
2019/02/22 Report 2019/03/01 Report Franchise Fees Larry Ramsey Revenue & Finance
Sales Tax-Local

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 

Green background on status indicates a bill has been acted on the last recorded legislative day.

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