Comcast loses pair of Oregon state tax rulings

Comcast (NASDAQ: CMCSA) came out on the losing end of two separate state-tax-related rulings in Oregon this week, each of which has significant impact on telecommunications in the state. 

For one, the Oregon Department of Revenue ruled that the MSO is not eligible for a tax break designed for companies who deliver gigabit-speed Internet services to state residents. 

Comcast has been accused of using its pricey, 2 Gbps "Gigabit Pro" service to try to exploit Oregon tax laws that were originally put on the books to lure Google Fiber (NASDAQ: GOOG).

During their last legislative session, Oregon state lawmakers quickly put together laws that mitigated so-called "central assessment," which taxes companies, including telecom operators, based on the value of their brands.

Comcast fought those assessment rules in court, but lost out in a 2014 state Supreme Court ruling.

But the new law exempts companies that make gigabit-speed services to most Oregon broadband users. The goal was to lure Google Fiber to the region. But the law change could have had the unintended effect of discounting tens of millions of dollars from Comcast's corporate tax bill in the region.

According to the Oregonian, however, the state revenue department ruled that the premium Comcast fiber Internet service, which runs customers at least $4,600, doesn't qualify Comcast for the tax break, at least not this year. The agency didn't explain its rationale.

Secondly, the Oregon Supreme Court affirmed a ruling that Comcast must pay a license fee on the cable modems it leases in Eugene — the MSO has been battling this fee since 2010.

"We believe the City of Eugene does not have the legal authority to levy a tax on Internet access," Comcast spokeswoman Amy Keiter said in a written statement to the Oregonian. "We are reviewing today's ruling from the Oregon Supreme Court and will determine the best course of action going forward to prevent local taxation of internet access."

For more:
- read this Oregonian story

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