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Revenues subcommittee issues negative recommendation to bill extending broadband equipment sales-tax exemption
Summary
The subcommittee issued a negative recommendation to SB 925, which would extend a sales-tax exemption on broadband equipment; the sponsor said the policy helps preserve provider investment and align with the Tennessee Broadband Investment Act, but the bill carried a $35 million fiscal note that the committee did not fund.
The Revenues Subcommittee voted to give Senate Bill 925 a negative recommendation, citing the bill’s unfunded fiscal note.
Chairman Jackson, sponsor of SB 925, told the committee the bill would extend a sales-tax exemption on equipment broadband providers buy or lease to build networks in Tennessee. "This bill makes sure that the 100% of every dollar intended to broadband continues to get invested in the broadband," Jackson said, and noted the Tennessee Economic and Community Development (ECD) Broadband Office is working to award more than $800 million in federal broadband grants this year.
Jackson said the 2022 Tennessee Broadband Investment Act created a three-year exemption that was set to expire, and that the exemption aims to reduce the cost of deployment so providers invest federal and private funds in construction rather than paying sales taxes. The bill carries a fiscal note of $35,000,000 that the record shows is not funded.
With no further questions from members, Chairman Hensley announced he would make a negative recommendation. Senator Hale seconded the motion. The clerk recorded five ayes on the negative recommendation: Senators Hale, Powers, Wally, Yarbrough and Chairman Hensley. Chairman Jackson’s bill will proceed to the full Senate Finance Committee despite the subcommittee’s negative recommendation, where members may explore funding options.
