Group of Tenn. counties filed state court suit challenging proper...
Group of Tenn. counties filed state court suit challenging property tax break state law gives to cellular companies. They hope suit filed Thurs. in Tenn. Chancery Court, Williamson County, will counter pending bill in state Senate that would give…
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similar break to BellSouth and other landline phone providers. Under 1989 tax law, property of cellular companies is taxed at lower rate applied to commercial/industrial property rather than rate applied to property of telecom and energy utilities. Result is that cellular companies pay 20% lower property taxes than BellSouth on equivalent property value. Pending bill (SB-1484) would give BellSouth and other utilities credit on state business franchise taxes equal to difference between commercial and utility property tax rates. To cover resulting revenue shortfall, bill would raise sales tax on business long distance to 6% from 3.5%. It also would require that any net tax saving from changes be applied to reduce access charges. Counties’ suit said special tax treatment for wireless companies, originally granted to help development of affordable, widespread wireless service, was unlawful because it treated essentially similar companies unequally for tax purposes, and pending bill would extend unlawful discrimination to more companies. Bill sponsor, State Sen. Bob Rochelle (D-Lebanon), said localities should support lower taxes for wireline companies rather than higher taxes for cellular companies. He said portion of business phone sales tax increase would be paid to counties to offset property tax losses, while balance of sales tax rise would offset treasury losses from franchise tax credit.