Charter Communications (NASDAQ: CHTR) is hoping to use the ballot box to reverse a Montana Supreme Court decision that reclassified its cable properties in the state and presaged a 300 percent tax increase.
In December, the state Supreme Court affirmed the right of the state's Revenue Department to raise the property tax assessment of cable properties owned by Charter in the state.
The properties belonged to Bresnan Communications until 2010. They were then sold to Cablevision (NYSE: CVC), which labeled them Optimum West. Charter bought the properties last year, only to see their real estate assessment jump from $1.7 million to $7.3 million, resulting in a 329 percent tax hike.
The dispute comes down to the definition of a modern cable operation. Bresnan traditionally divided its property into two property tax classifications: cable TV, with a 3 percent tax rate and telecommunications, with a 6 percent tax rate. The state decided, instead, to designate Bresnan (now Charter) as a telecommunication service property as a whole, assessed with a 6 percent tax rate, a story in the Helena Independent Record explained.
Charter is attempting to overturn that decision via a ballot initiative it filed for the November election with Secretary of State Linda McCulloch's office. That initiative is being reviewed by Attorney General Tim Fox's office.
Charter's viewpoint is that it is "working to protect our customers from a more than 300 percent tax increase."
Montana, though, doesn't see things that way, according to Sara Cobler Leow, executive director of the Montana Budget and Policy Center, who noted that a Charter win would mean "our schools and other essential services would be threatened by Charter's refusal to pay its fair share toward our state's economic growth."
- see this Helena Independent Record story
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