Tax Exemption Saves TNBA Members Millions

Posted: December 17, 2019

The Tennessee Broadband Association won a major legislative victory earlier this year that will save our members millions of dollars and will benefit all those they serve.

In the final days of the 2019 legislative session, TNBA members successfully pushed for the passage of a last-minute exemption bill (SB 1458/HB 605), now known as the Tax Exemption Act. Until the bill’s passage, TNBA members faced millions of dollars in new taxes from the Department of Revenue’s recent decision to tax the installation and leasing of fiber optic cable.

Legislators, who have focused on eliminating tax exemptions throughout the session, understand the importance of spreading broadband technology throughout the Volunteer State and approved the bill exempting fiber installation from the tax.

“The stakes were very high, and we knew how important this bill was to our members and the people they serve,” says TNBA Executive Director Levoy Knowles. “This is a win for our TNBA members, but more importantly it’s a win for rural Tennesseans who count on fiber optic service.”

TNBA members had argued that adding millions in taxes to fiber optic installation would prohibit them from expanding broadband networks in areas that need it most.

“The governor and other officials are promoting broadband deployment through state grants,” Knowles says. “In fighting for this exemption, we explained that the collection of this new tax would consume the funding that some members had received. Fortunately, our legislators agreed with our position that such a policy really didn’t make sense.”

The House passed the bill with a vote of 85-10, and the Senate version passed unanimously.
The bill was debated thoroughly in several committees and involved many meetings with all the stakeholders, including the Department of Revenue, legislative leaders and TNBA members.

Knowles credits the bill’s sponsors, Sen. Paul Bailey, R-Sparta, and Rep. Rick Tillis, R-Lewisburg, for their dogged determination to see the bill through.

“Both legislators have proven once again that they understand the importance of broadband for rural Tennesseans and that they are willing to fight for their rural constituents,” Knowles says. “TNBA members and our customers owe them a good deal of appreciation for championing this bill.”