Comments to the Honorable Travis Hutson, Chair, and Members of the Senate Regulated Industries Committee Regarding SB 1592 – Broadband Internet Infrastructure

My name is Dominic M. Calabro, and I am President and CEO of Florida TaxWatch, an independent, nonpartisan, nonprofit, taxpayer research institute and government watchdog which, for over 40 years, has worked hard to improve the effectiveness, efficiency, and accountability of Florida government and promote a fair and equitable system of taxation.

Even before the pandemic proved how essential connectivity is to enterprise and education, we knew that Broadband is vital to talent development, health and safety, job creation, business climate, capital attraction, and Florida’s economic growth.Businesses expect broadband access and lack of it makes it hard, if not impossible, to attract new business investment and jobs. Students and job seekers without broadband cannot access on-line learning and support tools. Many rural areas, already underserved by traditional medical services, cannot take part in the growing use of telehealth services. 

While Florida’s urban areas are approaching 97 percent broadband coverage, one-fifth of the state’s rural areas lack connectivity.^[1] Florida TaxWatch supports measures that accelerate broadband deployment and remove barriers to investment that Florida Internet Service Providers face. Our state currently levies sales and use tax on broadband equipment which, along with the high cost of obtaining access to municipal poles and inconsistent regulations, drives up the cost of broadband deployment, especially in dispersed, rural areas where there is more capital-intensive buildout.

It is not sound tax policy to tax business inputs, including machinery and equipment. It reduces investments and produces pyramiding, resulting in hidden taxes and higher prices for consumers. The Florida Legislature has recognized and supported this principle by providing sales tax exemptions for inputs in other critical industries such as manufacturing and agriculture.

Providing access to critical services to all Floridians and ensuring economic growth across the state is important in the best of times; accelerating recovery and connectivity is a must in these difficult times.

Florida TaxWatch supports efforts to increase deployment of broadband and providing tax exemptions for broadband equipment and encouraging reasonable regulation and costs to access municipal poles is an efficient and immediate method to encourage broadband deployment in Florida. We look forward to working with you and your colleagues as this issue is addressed.