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Added telecom tax puts access at risk

Gov. Mark Dayton wants this year's legislative session, which starts today, to be an "unsession," where lawmakers undo past legislation that is now outdated or is deemed a stumbling block to efficiency.

And right from the get-go, you can expect to hear news about the repeal of three business-to-business taxes enacted at the end of last year's session. While not outdated, several groups including the Minnesota Chamber of Commerce, which visited the Pioneer last week, are adamant they are stifling business growth.

The three B2B taxes, as they are known, are a tax on labor for repair and maintenance of business equipment; a tax on telecommunications equipment purchases; and a tax on warehouse and storage space.

So as not to simply espouse the Chamber's talking points, the group feels the B2B taxes hurt large and small businesses alike, curtail investment and expansion, and therefore job creation, and make Minnesota a less business-friendly state for existing and potential new companies. As North Dakota, Wisconsin and Iowa look to attract new businesses, the Chamber and other repeal advocates say, they won't have to look too far to find them right here in Minnesota. (Remember those billboards going up along the Minnesota/North Dakota border?)

However, the one aspect of the B2B taxes that caught our attention was the telecommunications tax. In Bemidji and the surrounding areas, we are fortunate to have strong broadband Internet access. But as companies such as Paul Bunyan Communications look to expand their reach farther to more rural areas, the new tax could serve as a deterrent. While that hurts the telecom companies in terms of higher taxes and less revenue, it also harms citizens who may not get the access they deserve in this day and age.

Dayton himself has advocated for a more connected state. He created the Governor's Task Force on Broadband, which has Dayton's goal of "border-to-border" high-speed Internet and cell phone access for Minnesotans.

An added tax on telecommunication companies that are pursuing expansion seems counter-intuitive to Dayton's goal.

Later this week, the new budget forecast will be released. Dayton said he's for repealing the B2B taxes, assuming the new forecast is favorable, as was the previous release that showed an estimated $1 billion surplus. Several lawmakers have already drafted legislation to repeal some or all of the B2B taxes. In the case of the telecom taxes, we think that's an easy decision. It helps business and it helps citizens.