UPDATED: Tax changes for telecoms look pass Senate, head to governor

UPDATE: The Senate passed the bill 39-1. It now heads to Gov. Rick Scott.

Tax changes designed to help Verizon Communications and other telecom companies suddenly seem poised to pass on the final day of session, just two weeks after the measure appeared to stall.

At 7:42 p.m. last night, an amendment was filed to SB 1060 that would restore a controversial provision to the legislation, which deals with the states communications services tax.

Specifically, the language would give telecom companies more freedom to bundle together items that are subject to the CST (such as phone service) with items that they are not (such as home-security monitoring) into a combined package with one price for consumers. But they would only have to calculate taxes based on the hidden prices of the items that are subject to the tax.

Telecom companies say the legislation would ensure that they and their customers dont wind up being unfairly taxed on products that were never meant to be included under communications services and they say allowing them to package it all for a single price is a convenience for customers. But some tax-policy experts say the legislation creates a loophole through which companies will be able to deflate their tax bills, by minimizing the price of anything that is subject to the CST and maximizing the price of anything that is not.

State economists have struggled to understand the magnitude of the bundling provision, estimating it would cost the state and local governments a minimum of $35 million a year. A separate analysis by the Department of Revenue estimated the hit could be more than $300 million a year. The telecom industry disputes the estimates.

In addition to Verizon, Comcast Corp., AT&T and CenturyLink, among others, have been lobbying for the bill.

Two weeks ago, Sen. Ellyn Bogdanoff, a Fort Lauderdale Republican who is sponsoring the bill, rewrote the legislation to take out all substantive changes and instead order only a study committee to evaluate the CST and recommend ways to modernize it before next years session. The amendment she filed last night would keep that committee, but also restore the bundling language.

The House bill (HB 809) is sponsored by Rep. Jamie Grant, a Tampa Republican, and it passed that chamber last month. The telecom industry has also worked on the issue with Rep. Chris Dorworth, the Lake Mary Republican tentatively in line to become House speaker after the 2014 elections.

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UPDATED: Tax changes for telecoms look pass Senate, head to governor

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