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Sales Tax Exemption: No Dice for Colorado Telcos

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Sales Tax Exemption: No Dice for Colorado Telcos

May 19, 2016

  By Michelle Amodio, TMCnet Contributor

A bill brought to the House of Representatives that would’ve let Colorado county government to exempt sales tax for telecoms’ broadband equipment purchases has run out of support.

This idea is not new; it has been brought up several times in recent past; however it has failed every time.

Typically, government bodies can help companies lower their cost of doing business by offering the ability to purchase various types of goods and services tax-free. With this particular bill, the hope was to give rural customers a boost by attracting service providers to invest in rural networks where educational and economic benefits are most needed.

At the current state of broadband deployment, rural customers still represent a viable market for these services for a number of strong reasons. There is a great opportunity to sell both Internet services and enhanced features to the underserved rural market, and such is the case in the more rural parts of Colorado.

“This year’s exemption proposal, after getting through the Senate, was amended to keep the broadband sales tax exemption from being applied in counties with more than 60,000 people -- meaning the sales tax exemptions couldn’t be applied in the 12 counties that are home to Colorado’s largest cities,” according to the Denver Business Journal.

Unfortunately, the long list of amendments was not enough to get this bill passed.

Rural America has less broadband Internet use than metro communities, with differing degrees of broadband availability. Research has demonstrated that rural communities with greater broadband Internet access had better economic growth, which conforms to supplemental research on the benefits that rural businesses, consumers, and communities attribute to broadband Internet use.

Investing in rural America adds to the economic viability of rural communities, which strengthens the nation’s economy and helps communities to thrive. This is a small piece of the puzzle, but an important one as we head into a more connected and wired society.

With the advent of IP communications come the potential benefits of broadband for these communities. There are plenty of examples relating to education, health, telecommuting, and other services that suggest broadband can be a remedy for rural economies.

Perhaps another try will be the charm for Colorado, but based on recent history, it doesn’t seem likely. 

Edited by Rory J. Thompson
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