The proposed municipal relief package asks the Massachusetts Legislature to add a new tax on the communications infrastructure in the Commonwealth.  This would have an adverse affect on the entire communications industry and our consumers in the Commonwealth.

Adding $100 million dollars to Verizon's costs only jeopardizes our ability to compete in the new telecom marketplace - especially if we are forced to pass these cost on to our customers.

This is a new tax:

Telephone switches and poles & wires along public ways are specifically exempt from personal property tax under current Massachusetts law.

Similar to exemptions for manufacturing equipment, the communications exemption is a policy created by the legislature to encourage technology deployment, investment and innovation.

In 2006, the communications industry invested over $1.8 billion in new infrastructure in Massachusetts.

It's wrong and misleading to suggest that current pro-investment tax policy is a "loophole."

Massachusetts should not create new taxes on communications companies that will hurt customers.

The communications industry is already heavily taxed.  It generates more than $490 million each yearin local and state taxes and fees in Massachusetts, including:

• $125 million in local fees and taxes, including real estate, motor vehicle, and personal property taxes, and franchise fees;

• $299 million in state sales taxes and fees on equipment purchases, customer sales taxes and regulatory fees;

• $68 million in state withholding taxes from employees of major communications carriers (a major part of the 100,000 industry workers in Massachusetts.)

New taxes undermine investment - a critical engine for economic development

Communications is one of the state's critical infrastructures.  Key sectors of the state¿s economy (health care, education, financial services, technology) depend on robust broadband networks.

The communications industry employs more than 100,000 workers in Massachusetts, making it a significant sector of the state's economy.

The industry is doing what policy makers desire:

• Investing capital dollars in Massachusetts ($1.8 billion in 2006 alone),

• Deploying new wireless and wireline technology,

• Fostering innovation by making broadband networks more available for new business and consumer applications in health care, education and general commerce,

• Hiring new technical and customer service employees

Creating new taxes will dampen this economic development at a time where policy makers should be encouraging investment, deployment and hiring.

Consumers will pay more for communications services as a result of these new taxes

Customers already pay $221 million in state sales taxes on communications services.  Bills will increase further if the legislature adopts these new taxes (basic local telephone service could increase by 15%.)

Any revenue from the new taxes would not be evenly distributed.  Customers in rural and suburban towns would pay higher cable, wireless and local telephone bills, effectively subsidizing short term revenue gains for cities like Boston.

Help keep Massachusetts an attractive target for capital and technology deployment.  Join us in opposing new taxes on communications infrastructure that discourage investment in broadband networks.

Ask your state lawmakers to oppose this new tax.