Lawmakers revisit streaming tax to boost broadband

Lawmakers revisit streaming tax to boost broadband
Small-town lawmakers will resurrect a plan to tax streaming services, e-book downloads and other digital goods in their bid to bring high-speed internet to areas of rural Georgia that lack it. (Source: Pixabay)

By Jill Nolin, CNHI State Reporter

DAHLONEGA – Small-town lawmakers will resurrect a plan to tax streaming services, e-book downloads and other digital goods in their bid to bring high-speed internet to areas of rural Georgia that lack it.

That proposal – known earlier as the Netflix tax – was among a package of recommended fixes rolled out Thursday by the House Rural Development Council. These ideas could translate into at least nine bills this session – doubling the council’s workload from last session.

Some of the measures, such as the broadband funding bill, will no doubt prove heavy lifts.

The broadband bill alone could generate about $150 million in new revenue, said Rep. Jay Powell, R-Camilla, who co-chairs the council. He said he believes that influx of cash should be pumped into a grant program that was created but left unfunded last session.

“It may resolve itself or it may not,” Powell said, referring to broadband service gaps in some parts of the state. “But our citizens expect us to at least be working on it and this will do that.”

Powell has pitched the measure as a way to modernize the state’s tax structure while broadening the tax base and generating revenue to build out the broadband backbone for rural Georgia. The idea stalled last session, in part, because lawmakers said they wanted to wait and see what funding may come down from the federal government.

“The taxing structure is built around what we used to have and that market is shrinking,” Powell said. “So either the tax revenue is going to stay flat or it’s going to decline if we do not change the tax structure.”

Powell’s plan would throw out a 7 percent sales tax on telecommunications equipment and a franchise fee – which is as high as 5 percent – that is currently on some traditional services, such as cable TV. Instead, a universal 4 percent tax would be placed on all services, including currently untaxed satellite and streaming services.

Another tough proposal would eliminate the state’s controversial certificate of need program, which limits the number of health care services allowed in any given area. The program is seen as a vital protection for the state’s smaller hospitals, but critics say it stifles innovation and ultimately drives up costs for consumers.

Just this week, the Trump administration released a report urging states to scale back – or possibly throw out altogether – their certificate of need programs, calling them “anti-competitive.”

The council has proposed replacing the decades-old system in Georgia with an accreditation and licensing requirement.

New providers who want to open a facility within 20 miles of an existing provider would have to go through a review process – an attempt to address the concerns of small hospitals.

Under the proposed new system, an existing hospital would not be able to block another facility from opening its doors for fear of competition, says Rep. Terry England, R-Auburn, who also co-chairs the council.

“At some point we have to back up and ask what is best for the patient,” England said. “And what’s best for the patient is a more open market where there is some choice, in areas where there is enough demand to have choice.”

Other proposals include requiring more transparency from non-profit hospitals, expanding the rural hospital tax credit program, freeing farm wineries to distribute their own wine and creating a grant program to help small towns clean up blighted neighborhoods.

Jill Nolin covers the Georgia Statehouse for CNHI’s newspapers and websites. Reach her at jnolin@cnhi.com.

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