Georgia Considers Taxing Communications Services

Monday, 14 Mar 2011 02:16 PM

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As Georgia considers a move to a consumption tax to replace its state income tax, satellite subscribers, cell phone users and cable customers could pay a little more, the Gainesville Times reported Monday.

The increases would add up to a few dollars per months, and they would raise about $200 million for state and local governments. The proposed tax code, modeled after a system in place in North Carolina and Virginia, would replace the patchwork of taxes and franchise fees that telecommunication users now pay.

"Taxes on the communications system started with the monopoly of BellSouth, and the world has changed while the tax system hasn't," said David Sjoquist, director of the Fiscal Research Center at Georgia State University and a member of the tax reform council reviewing the state’s tax code. "A good deal of communications services were not taxed and others are taxed by local governments through the franchise fee."

Larry O'Neal
Larry O'Neal
House Majority Leader Larry O'Neal, a Bonaire Republican who co-sponsored the tax reform bill, said the council continues to review the tax code reform bill, and that proposed changes could require a constitutional amendment and approval from voters.

Competitors of satellite TV back the bill and saying it would make pricing more transparent. Satellite companies say the proposal tilts the playing field instead by favoring cable customers.

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