Four years from now, telephone companies and cable companies will pay about $30 million less in Iowa property taxes as a result of legislation Governor Kim Reynolds has approved.
Buildings and cell towers will remain subject to local property tax assessments, but property taxes on “transmission equipment” like wires, cables and fiber will be phased out. Republican Representative Chip Baltimore of Boone said that brings property taxation on telecommunications companies in line with how other commercial property is taxed.
“This is an important bill in terms of trying to free up dollars to encouarge these telecommunications companies to invest in that ‘last mile’ of infrastructure,” Baltimore said during House debate of the plan this spring. “It’s going to be very helpful for those companies to do that, especially in rural Iowa.”
But Democrats like Senator Chaz Allen of Newton complained there’s nothing in the bill that forces companies doing business in Iowa, but headquartered out of state, to use the tax savings to expand broadband service in Iowa.
“I’m just saying if we’re going to give this tax cut, Iowans need to know that this money’s going to stay in here, be reinvested,” Allen said during senate debate this year, “not that this money is going to leave this state.”
Allen called for yearly public reports showing how the cable and telephone companies use the tax savings, but Republicans voted the idea down.
“That’s sort of like us having the Department of Revenue saying: ‘Hey, we want to know how you’re going to spend your tax money when you get a return,” said Senator Randy Feenstra, a Republican from Hull.
Another Republican legislator said telecommunications companies should be able to use the tax savings to do things like pay investors or hire more workers if that’s a higher priority to the business.