On Tuesday, February 4th, 2014 SB 266 (Sen. Hukill) relating to communications Services Taxes was heard and passed by the Senate Communications, Energy, and Public Utilities Committee.

SB 266 reduces the communications services tax (CST) rates by two percent, reducing the general rate from 6.65 percent to 4.65 percent and the rate on direct-to-home satellite from 10.8 percent to 8.8 percent. The bill also makes conforming changes to the statutes that authorize a communications services dealer to collect one combined rate that includes both the CST and the gross receipts tax to reflect this two percent reduction in the communications services tax. The effective date of the bill would be January 1, 2015.

It is estimated that the fiscal impact to Counties will be approximately:

  • SFY 2015: $7.5 million (State Fiscal Year = 4.5 months)
  • CFY 2015: $12.6 million (Local Fiscal Year = 7.5 months)
  • Recurring Impact: Approximately $20 million annually

SB 266 has been referenced to three committees:

  • Communications, Energy, and Public Utilities – Passed on 2/4/2014 (8 Yeas; 0 Nays)
  • Appropriations Subcommittee on Finance and Tax – Not Scheduled Yet
  • Appropriations - Not Scheduled Yet

The proposed tax cut was not included in the Governor’s proposed tax reform package and there is currently no companion bill in the House.