Communications Services Tax (CST)
House Finance and Tax Subcommittee (conceptual)

  • Summary:
  • Concept of reforming the CST to consolidate the taxation of communications services into a single unified statewide rate, regardless of the delivery medium or location of the services user.
  • Consolidation is intended to be revenue neutral from both the state’s and any individual unit of local government’s perspective.
  • To achieve that overarching reform objective, the concept language replaces local government communications taxation authority with a state revenue sharing arrangement, modernizes the definition of “prepaid calling arrangements” and applies the single unified rate to sales of such arrangements, removes an exemption on residential land line service, and reduces the collection allowance granted to dealers of communication services.
  • The concept language also eliminates the authority of local governments to levy permit fees on dealers of communications services but will grandfather in any local governments currently levying such fees to maintain revenue neutrality
  • Status
    • The conceptual language is still under evaluation by the revenue estimating conference and is not anticipated to be heard in week two.  There is still no senate companion of the house conceptual language.
    • Although the House committee has identified this issue as a 2013 legislative goal, there has yet to be any sign that the Senate will also address this issue.  FAC’s ultimate position cannot be determined until a complete fiscal analysis has been completed.