Policy

Arizona Ops Aim to Cut Taxes, Access Nets

2/22/2005 8:40 AM Eastern

Arizona cable operators are stumping for a new state policy that will trim the amount of total taxes paid by their consumers, as well as limiting to two the number of public-access channels that may be required by municipalities.

The Arizona Cable Telecommunications Association stressed that direct-broadcast satellite customers pay no state and local taxes. Defections to that technology -- which may undercut cable prices in some communities due to the unequal tax burden -- cost cities money, ACTA executive director Susan Bitter Smith said.

Twin bills are making their way through the state House and Senate. They would limit franchise fees to 1% of an operator's gross revenues, plus any applicable "town-privilege tax" (translation: sales tax), or 5% of gross revenues, whichever is less.

Franchise authorities would be prevented from demanding additional fees or in-kind services, but an operator may offer them as part of a good-faith negotiation.

The bill would allow cities to continue to regulate rights-of-way, but it would limit payments for use to a "reasonable cost" to pay for damage occurring from road cuts and the like.

The new policy could actually raise tax rates in small, rural towns, but it should lower the tax burden in larger communities.

The law change is opposed by the League of Arizona Cities & Towns and individual cities such as Tucson. But the bill is headed for floor votes, possibly as early as next week.

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