Tuesday, February 01, 2000
Cable firm likes tax revamp
Says Patton plan would be fairer
BY PATRICK CROWLEY
The Cincinnati Enquirer
COVINGTON — Northern Kentucky cable television subscribers won't see an increase on their monthly bills if Gov. Paul Patton's plan for a 6 percent excise tax on cable TV service passes the Kentucky General Assembly.
That's according to Insight Communications, the New York City-based company that provides cable television to Northern Kentucky.
Insight, which operates out of Covington, has committed that no customers in its service area will see a rate increase because of the tax, said company president and CEO Michael Willner.
“Insight will make a rate adjustment to ensure that our customers do not see a change in their overall monthly bill as a result of this tax,” Mr. Willner said in a statement.
The company as well as others in the telecommunications industry have worked closely with the Patton administration over the last two years on drafting changes to the way cable television is taxed in Kentucky.
The industry is pleased that the proposal “levels the playing field” for all telecommunications companies doing business in Kentucky, said James Stewart, an Insight senior vice president who operates the company's Northern Kentucky office.
Under the current system in Kentucky, cable television companies like Insight are taxed on the amount of property they own in Kentucky, Mr. Stewart said.
That means companies that have no or little property in Kentucky but are still doing business here pay far less tax than a company like Insight, which owns offices, maintenance facilities and other property in Kentucky.
“This bill levels the playing field for all companies in the telecommunications industry,” Mr. Stewart said. “It's a fairer system. That's why we support it.”
Under Mr. Patton's plan, companies will be taxed on their revenues rather than the property they own, Mr. Stewart said.
So companies starting to do cross-over business into one another's industries — including cable, phone and Internet companies — would all be taxed the same way, he said.
“There's much more predictability in this new system, and that's a better way to do business,” he said.
State lawmakers are still trying to digest Mr. Patton's overall tax reform plan, a massive and complicated proposal that raises some taxes while cutting others.
Rep. Paul Marcotte, R-Union, said much of Mr. Patton's bill “sounds good” but he has yet to really explore all the details.
“Some of this is going to raise taxes on people and companies, and that is going to be a hard sell in the legislature,” Mr. Marcotte said.
Senate President Pro Tem Dick Roeding, R-Lakeside Park, said lawmakers are just starting to review Mr. Patton's proposal.
“We hope some of these things don't raise taxes or rates on people, but right now that's what we're being told,” he said. “But until we really get into what this bill is really about it's just impossible to determine what this will really mean.”
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