Oregon lawmakers voted unanimously in 2015 to create a tax break for internet service providers. On Wednesday, the Oregon House voted unanimously again – this time to repeal what it had done.
The Legislature created the tax break for companies offering internet service at 1 gigabit per second in hopes of luring Google Fiber to the Portland area. But lawmakers badly miscalculated.
Google jilted Portland and then, as faster internet speeds became commonplace, other companies moved to capitalize on the tax break worth millions of dollars a year. Lawmakers were close to a repeal last session but the bill mysteriously died in committee despite bipartisan support.
The tax break, and the delay, proved costly.
Comcast used the gigabit tax break as leverage in an unrelated tax dispute with the state, agreeing never again to claim the gigabit tax break as part of a deal that allowed the company to pay $45 million less in taxes than Oregon said it owed.
A gigabit is 1,000 megabits per second, 40 times the federal standard broadband standard. Those speeds used to be rare but are now available to the vast majority of homes in the Portland area. And with the advent of fast, wireless speeds from a new technology known as 5G, local governments fear big telecom companies would seek the tax break, too.
With Comcast no longer lobbying to preserve the tax break, though, it appears consigned to a lonely death in the Legislature. The House voted 59-0 to repeal it Wednesday.
“I believe this incentive is not working the way it was intended,” Rep. Rob Nosse, D-Portland, said in prepared remarks on House Bill 2684. He said it turned out to be unnecessary to give big companies a tax break to provide a service that would be richly profitable for them.
“Ultimately, I believe that without repeal, this tax break has the potential to drain local government and school district coffers of property tax revenue that they are relying upon,” said Nosse, the bill’s chief sponsor.
The repeal bill now moves to the Oregon Senate, where it could get a vote as early as next week.
-- Mike Rogoway | twitter: @rogoway | 503-294-7699