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Purpose

Technological advances in the telecommunications industry continue to outpace New York State’s attempts to tax service providers in an equitable way. New media is emerging and broadening its base at a rapid pace, and traditional media is just as quickly expanding its service portfolio. The state’s telecom taxes, like the industry to which they apply, have evolved. But by the 21st century this evolution has created disparate tax treatments for everything from right-of-ways to regulatory fees, resulting in inequities among providers that deliver similar services via different means. The New York State Senate Select Committee on Budget and Tax Reform will convene a roundtable meeting to explore ways to modernize the state’s telecom taxes. While the New York Department of Taxation and Finance plans to issue a report this fall detailing the state’s various telecom taxes, the Select Committee intends to begin public discussions on the issue at the roundtable.


Roundtable discussions should relate to proposals to modernize New York State’s telecommunications taxes under the Corporation and Utilities, Corporate Franchise and Sales and Use Taxes (Articles 9, 9-A and 28 of the Tax Law, respectively). Some of the questions the Select Committee intends to ask include:


• How should New York modernize its telecom taxes to make them better reflect industry practices and technology in the 21st century?
• What taxes are applied to some telecom companies but not to others, even when they offer similar services? From a historical standpoint, why were these service providers taxed differently?
• What states have modern telecom tax systems that can serve as models for New York?
• What federal laws or local government concerns should the state take into consideration when looking to modernize its telecom taxes?
• How have differing tax treatments for telecom companies offering similar services influenced behavior in the market?