State Rep. James Eldridge, a Democrat of Acton, is right to call a bill that would require telecommunications companies to pay property taxes a “no-brainer,” because this multimillion dollar industry has no reason to avoid such a tax, which legislators say could bring an additional $140 million into state funds.
The legislators promoting the bill say that any property tax imposed on companies like Verizon and Sprint would not likely increase prices for consumers, because the profit margin which telecommunications companies accumulate is large enough to make up for these costs.
In Boston, where almost half of all property is tax exempt because of laws protecting non-profit organizations, taxing land used by telecommunications companies is an easy, effective way of raising government revenue, without adversely affecting consumers. It may even lead to lowering property taxes for homeowners, because legislators estimate that residents of Boston pay an additional $185 in property taxes per year to subsidize these tax breaks.
It makes sense to encourage tax breaks on non-profit organizations, but profit-making companies like Verizon have no reason to deprive the state of necessary funds. Such funds would add to the state budget on education, public health and safety, as the bill’s supporters have suggested.
Those who oppose this legislation may argue that such a tax would lead to a rise in cell phone rates and other charges to consumers, but the small potential rise in fees would not outweigh the benefits of additional tax revenue to improving Massachusetts’ service sector.
Laws exempting telecommunications companies from paying property taxes were instituted in the first place as an incentive for growth in the industry, but now, when these companies have already grown into large corporations and spread out across the country, there is little incentive for continuing the tax break.
The telecommunications industry, unlike the transportation and housing industries, is not at the point of financial collapse, and already has enough incentive for growth. Tax exemptions are meant to stimulate growth in industries that would otherwise have little incentive to improve, and the telecommunications industry is not one of them.
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