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Wisc. Lawmakers OK Tax Relief for Digital

Cable operators in Wisconsin are waiting for Gov. Scott McCallum to sign a budget that would provide potentially significant tax relief to those that upgrade their systems.

The fiscal package would exempt cable's digital-TV equipment from property taxes.

"It's an equality issue," said Wisconsin Cable Communications Association executive director Tom Hanson, who noted that the state's TV broadcasters secured a digital tax break a year ago. "That's how we sold it."

One year ago, broadcasters approached the legislature for a property tax cut. The federal government has mandated that TV stations invest in digital technology, the broadcasters said, so the state should cut stations a tax break to offset increased operating costs from the federal dictum.

Lawmakers agreed and penciled in a property-tax break for the broadcast stations.

This year, cable operators descended on the capital to try and persuade lawmakers that they should not be taxed for technology they've deployed voluntarily.

The issue entered the budget discussion as an amendment, so the association did not need to find a legislative "friendly" to author a bill.

The tax policy has the potential to save operators millions of dollars, though not immediately. Time Warner Cable began digital upgrades of its Wisconsin properties just under two years ago, and Charter Communications Inc. is about to start work, Hanson said. The state's many smaller operators have not been active in this pursuit, he indicated.

The budget document still must be signed by McCallum, a fiscal conservative. His official state biography lists reducing the tax burden and promoting electronic commerce among his legislative goals.

"Our property taxes are higher here than most," Hanson noted. "We're always ranked in the top three or four in the nation."

But the tax cuts have been scrutinized by a Madison newspaper, The Capital Times.
The newspaper has taken note of the shift in the state tax burden from business to individuals. It also reported that some of the segments that received beneficial packages in the state budget, including cable and the telephone industry (which escaped a proposed 2 percent gross-receipts tax), have donated to the Republicans, who control state government.

The governor does have line-item veto authority, but cable executives expect the digital TV tax exemption will survive. McCallum has until the end of August to approve the budget.