HD61 - Study of Telecommunication Tax Structure


Executive Summary:
The Joint Subcommittee to Study the State and Local Taxation of the Entire Telecommunications Industry and Its Customers within the Commonwealth has been reviewing ways Virginia could restructure its telecommunications taxes and fees. In reviewing this restructuring, the joint subcommittee recognized the need for more information on the revenue impact from existing state and local telecommunications taxes and fees. Therefore, the General Assembly requested that the Auditor of Public Accounts collect information, before the 2005 Session, to determine whether the new tax structure will fully replace revenues provided to state and local governments by current telecommunications taxes and fees.

The results of our study found that projected revenue, based on maximum rates in the legislation, does not generate sufficient revenues to fully replace all revenues resulting from the current state and local taxes and fees that are subject to repeal. There is an estimated $34 million deficiency between the current revenue base of $391 million and the projected revenues of $357 million.