roanoke.com Real Politics / Preston Bryant

Preston Bryant is a Republican who has represented Lynchburg and part of Amherst County in the Virginia House of Delgates since 1996.

Ever tried to figure out the mishmash of taxes and fees on your telephone bill? If you have, you know only two things for sure: they’re too confusing and too high. And if you’re hearty enough to really dig into them, you’ll discover they’re pretty unfair, too.

Let’s take the confusing part first. You’ve got federal, state, and local taxes -- all of which are set at different rates. You’ve also got a bunch of fees, which are collected for everything from running E-911 systems to assisting the hard-of-hearing to paying for running phone lines down rights-of-ways.

But do you have any idea how much is being collected from you in taxes and fees? Do know whether you’re paying them for each phone line or as a percentage of your total bill? And do you really know who gets how much of all this loot? If you’re like most Virginians, you don’t have a clue.

Telecommunications taxes also are way too high. That’s something you most certainly know. But do you have any idea just how high they really are?

Would it shock you to know that state and local telecom taxes collected in Virginia are among the highest in the nation? They are. This is a fact that should strike you as odd since you’re living in a state that’s trying to push to even greater heights its growing telecom-dependant industries. We are the “Silicon Dominion,” you know.

And these taxes and fees also are terribly unfair. Some taxes and fees you will pay on the phone in your home, but not on your wireless phone. Some taxes you will pay on local dialing, but not on long distance calls. And often these taxes and fees that you pay (or not) on this or that are vastly different depending on where you live. It’s also true that your grandma is paying a higher percentage of her telephone bill in taxes than most corporations.

What about video services? Well, taxes and fees here are just as fuzzy. When it comes to watching television, if you’ve got cable, you’re taxed, but if you’ve got a satellite dish, you’re not.

We all know that lawmakers have been talking (and talking and talking and talking) pretty seriously for the past few years about overhauling Virginia’s entire tax system -- personal and corporate income taxes, sales taxes, gas taxes, etc. -- but their work to do so has proceeded with more fits than starts. Our tax system as it is now was put together nearly a century ago and doesn’t really fit today’s modern, high-tech economy. Reforming the system is arguably the most important issue facing the General Assembly and the governor.

Yet because of all the politics involved -- don’t forget, this is an election year -- few really believe that big-time tax reform is just around the corner. And there are lots of frustrations among those who recognize the importance of tax reform and, come hell or high water, want to see some action.

But a bright spot in all of these tax-reform fits and starts and frustrations can be found shining on a bipartisan group of 10 delegates and senators who have been working for more than a year to get their arms around all the complexities embedded in the telecom taxes and fees that are levied in Virginia. Believe it or not, progress is being made. Really, it is.

Each year, Virginians pay more than $350 million in taxes and fees to the state as well as counties, towns, and cities. The vast majority of this sum goes to local governments.

Some pay more -- much more -- than others in combined state and local taxes and fees. If you live in Bath County, for example, your tax bite (as a percentage of your telephone bill) amounts to 0.8%, but it’s 13.8% in neighboring Alleghany County. If you live in Caroline County, your telephone tax is 23.8%, but it’s only 16.1% across the border in Hanover County. And in Fairfax County, you’re paying 31.4% of your telephone bill in state and local taxes.

It’s just as varied among our cities. Bristol residents pay 9.1% of their bill in state and local taxes in fees. For folks in Lynchburg, though, it’s 18%, while residents in Norfolk pay 37%. Think that’s high? Be glad you don’t live in Richmond, where a staggering 43.6% of a telephone bill is taxes and fees (one of the highest percentages in the nation).

Taxes -- as a hard and fast rule -- should be fair and equitable, easy to understand, easy to administer, and as low as possible. And the delegates and senators working to reform telecom taxes are trying to do it by these very criteria.

The proposal being considered would tax both communications and video services at the same rate: it’d be 4.5% straight across the board, eliminating the rates that so wildly vary and go as skyward as 43%.

In setting the uniform 4.5% tax rate, we’d in turn be eliminating the half-dozen or so taxes and fees that appear in different line items on your bill. It’d all be boiled down to just a single line or two, making bills so much less confusing.

It’s also proposed that we eliminate all tax discrimination. Local and long distance calling would be taxed the same (including phone cards), as would cable and satellite broadcasting. It makes no sense at all to tax similar services so differently.

So the long and short of it is, by spreading out taxes evenly and taxing similar services the same, legislators will be able to cut your taxes, make your telephone bill more sensible, and ensure the same amount of money goes to the state and local governments who depend on that $350 million to help provide you the many other services that you want.

Oh, sure, there are still wrinkles to be ironed out before this deal is set. And, yes, there will always be nattering nabobs who’ll find fault and throw up their hands.

But if you’re one of those who for years has been sitting back chortling over the legislators and governors who have come and gone and delivered nothing on tax reform but hot air, you’ll be happy to know that there are a few delegates and senators out there who take their tax-reform duties seriously and are indeed making progress.

These are the legislators who’ve figured out how to streamline your taxes, make them much fairer, and cut them at the same time.

Editor’s note: Preston Bryant is chairing the legislative group that’s making such progress on telecommunications tax reform. His modesty prevents him from saying so in his column.

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