US Telecoms Providers Face High And Complex Tax Burden

by Mike Godfrey, Tax-News.com, Washington

27 May 2005

The results of a new study by the Council on State Taxation have revealed that US telecommunications firms face a significantly higher tax burden at state and local level than firms in other sectors.

According to the study, released on Wednesday, state and local telecommunications taxes averaged 14.17% in 2004, more than double the average on general business.

Moreover, the COST study found that telecoms firms faced a significantly higher paperwork burden, with the providers having to file an average of 47,291 tax returns compared to 7,501 for the average general business.

"Tax laws in the states are antiquated and take money out of the pockets of every American telecommunications consumer," noted Stephen Kranz, tax counsel for the Council on State Taxation.

"While some states have begun the process of reforming the state and local tax structure, much more is needed to reduce the high level of telecommunications taxation and administrative burden," COST noted.

COST was founded in 1969 by a handful of companies under the aegis of the Council of State Chambers of Commerce. It is a nonprofit trade association consisting of approximately 550 multistate corporations engaged in interstate and international business.

COST's objective is to preserve and promote equitable and nondiscriminatory state and local taxation of multijurisdictional business entities.

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