A proposal to impose a tax on internet services like Netflix, e-books and music downloads isn't moving forward in the Georgia General Assembly.
State representatives had been considering a 4 percent tax on all communications services, including digital products, cable TV, satellite TV, cellphones and internet phones, according to House Bill 887. The tax would have provided state government funding to subsidize bringing internet access to rural areas.
The bill's sponsor, House Ways & Means Committee Chairman Jay Powell, revised the legislation Thursday to remove any changes to tax rates. He said he hopes Congress approves federal infrastructure funding for rural internet as proposed by President Donald Trump this month.
"It would be remiss for us to put in an entirely new funding mechanism without knowing exactly what the federal government has in mind," said Powell, R-Camilla. "We've taken that out for the time being, with the opportunity that we can revisit that next year if it turns out that the funding mechanism we hope will appear does not appear."
What’s left of the legislation is a policy for rural internet expansion without any funding.
The latest version of HB 887, which shrunk from 46 pages to 16 pages Thursday, would allow local electric membership corporations to provide internet services, reduce fees EMCs can charge for internet providers to use their poles and set a policy for rural communities to qualify for potential future grant funding.
Powell said many lawmakers were willing to accept the communications services tax once he explained that it would replace existing franchise fees and eliminate sales taxes on communications equipment.
“I would prefer to have the funding in there, but at the same time it makes it so complex that I would rather get the framework in place and fund it later than to have everything in there and get bogged down so that nothing gets passed,” he said.
The tax on online products would have faced challenges if it had advanced to the state Senate.
Lt. Gov. Casey Cagle and Sen. Michael Williams, both of whom are Republican candidates for governor, have said they oppose the proposal to tax video streaming services.
The scaled-down bill is still "a great start" in the effort to expand rural internet access, said Georgia Cable Association lobbyist Stephen Loftin. He supports the communications services tax, saying it would tax all technologies equally.
“We were excited about the prospect of broadening the base so that we could lower the (tax) rate, which would be fair for everybody,” Loftin said.
The Georgia Cable Association’s members include Comcast, Charter Communications and Cox Communications, the cable and broadband internet subsidiary of Cox Enterprises, which also owns The Atlanta Journal-Constitution.
