The Latest on Comcast 4.15.2016

Here are the latest developments about Comcast and their effort to avoid Oregon property taxes.

  • In March, the Oregon Public Utility Commission (PUC) gave Comcast the go ahead, finding their proposed gigabit project is qualified for the huge tax break intended for Google’s proposed gigabit service. However, the next decision is of equal importance. It will be made by the Oregon Department of Revenue (DOR) and is of equal standing.
  • The DOR will decide in mid-May if Comcast qualifies for the humongous tax break. At issue are doubts whether the project and present factual circumstances meets the intent and letter of the law, which does have weaknesses. Comcast is claiming that because they are “offering” gigabit service – though a precious few if any will pay the exorbitant cost – they should get the property tax break. The bill requires they don’t discriminate and offer it to a majority of their existing broadband customers. This exemption was designed for Google who have yet to enter the Oregon market. Their infrastructure costs would be high and that is not even counting the intangibles, but the bill was expanded to cover others to incentivize expansion of gigabit speed broadband services throughout the state. DOR has asked for more information before they make a decision for this property tax year.
  • There are more disturbing facts as we learned in our research:

-If Comcast gets this tax break for providing gigabit service inPortland and the valley, it will lower their taxes throughout the state, even in places where they refuse to provide the service.

-Even without the newest gigabit property tax break they seek, Comcast will pay a significantly lower per $1000 property tax rate than their direct competitors Frontier and Century Link will pay.

-The legislature did intend to give Comcast a new property tax break this year. 2015’s Senate Bill 611 allows them to exempt from taxation the value of their franchises this year. This law was written to lower their taxes and give them an exemption akin to the FCC license exemption that the wireless companies have had. But the gigabit exemption would be worth much, much more, saving them 10s of millions.

-The Comcast v. DOR case is still pending in the Oregon Tax Court after DOR won in the Supreme Court in October 2014, ruling that Comcast is subject to central assessment and thus taxation of their intangible property. Comcast and other communication companies (though the bulk is Comcast) have not paid their property taxes for centralassessment and instead are in a deferred billing credit arrangement while the case is pending. Those tax obligations were over $80 million as calculated by LRO during the 2015 session, and that covered only 2009-14 deferments. The subsequent years have escalated this much higher. Schools would get over 40% of this money if DOR ultimately wins in the Tax Court. There have been settlement talks, but they have been all talk and no action.

-Comcast claims that if they lose the lawsuit, their property taxes payments in Oregon will be the highest they pay in any state. This is the primary explanation given for why the legislature passed SB 611 in 2015. Losing in the courts, with Comcast v. DOR case, Comcast sought and got a change in the law to lower their taxes.

This is another huge case of corporate strong-arming on the property tax front.

Did any of us care if Comcast’s Oregon property taxes were their highest in the nation? For all we know, they have more Oregon customers than in any other state. Real numbers were never shared in legislative hearings to even prove this claim was true, or to compare their per-customer costs with those of their Oregon competitors.

Corporate strong-arming like this explains why Oregon's 12K school are continuously underfunded with the consequence that Oregon ranks near the bottom of the country in education funding and achievement.