NEW YORK-Florida has codified into its own law a sweeping overhaul and simplification of telecommunications taxation that responds, in part, to a new federal statute that becomes effective next year.
This month, the Florida Department of Revenue began accepting registration forms from all entities subject to the new, revenue-neutral plan, which replaces multiple local and state taxes with a two-part state and local tax. The new law, which goes into effect Oct. 1, requires compliance from at least 6,500 companies: cellular, PCS and paging operators, local and long-distance carriers; cable and satellite communications companies; private line, hotels and other retail communications providers; resellers; fax and telegram services.
Florida acted in response to several issues, including the complexity of its taxation regime, which had prompted “all the large telcos to band together to lobby for simplification,” said Jim Nason, national multi-state tax leader for Deloitte & Touche, Parsippany, f flurry of other local option taxes that nickeled and dimed carriers to death: excise taxes and fees for licenses, pole attachments, base stations, power and franchises.”
From Nason’s perspective, one of the most significant roadblocks to the expansion of bandwidth capacity in this country is the de facto ransom that carriers are compelled to pay in exchange for local government approval of requests for items like rights-of-way and tower siting.
“The state made it very clear it doesn’t want local jurisdictions to throw in little ticky-tackies, and I am sure the state fought long and hard against the localities on this,” Nason said.
“The Florida law superseded these ransom requests, although it did leave cities and towns with wiggle room to impose emergency fees. It also leaves alone property taxes, occupational licensing fees for technical workers and fees for universal service and the operation of the 911 system,” he said.
Under the new state law, which is designed to be re law intends to level the competitive playing field between smaller and larger telecommunications companies because none will any longer have to deal individually with the clerks in every town, city and county. Instead, each local taxing entity must notify the state DOR of its tax regime and any changes to it, within the limits of the law. They must also give all registered telecom providers 120-day’s notice before imposing the taxes.
The Florida Department of Revenue provides databases on the Internet that give telecom companies access to pertinent information. The state agency also will certify third-party providers of these databases.
An important part of that posted information will be a listing, which is updated annually, of certified resellers of telecom services. Carriers relying on resellers validated in such a manner “can wash their hands” of responsibility for tax collections on resale of their services. Agents, like electronics and convenience stores, are not considered resellers beca
