The Communications Services Tax: Time for a change

More competitive prices help boost investments

One possible side effect of the high CST in Florida is that the tax may be slowing down investment in wireless infrastructure and broadband networks.⁸ A more competitive price for wireless services would increase demand, all else constant, and would therefore increase subscriber revenue. These revenues drive investment decisions in network modernization,⁹which then boost the economy.

Investments in wireless connectivity can help put more Floridians to work.

According to the Tax Foundation, there is a vast amount of literature showing that investments in wireless networks provide benefits to the economy, as many sectors use wireless networks to boost productivity and efficiency.¹⁰Such investments would also put more Floridians to work.

In addition, multiplier effects for telecommunications infrastructure have been found to be higher than those of other industries, as they help improve business processes overall,¹¹and enhance the competitiveness of the Sunshine State.

Conclusion

With Florida’s Regular Session right around the corner, legislators will once again have the opportunity to provide financial relief to Florida families, especially those of low income. A reduction in the CST will impact the vast majority of Floridians and businesses. While a reduction of the CST represents millions in foregone state revenue, it also has the potential of attracting more investments in telecommunications infrastructure, improving current business processes, creating jobs for Floridians, and helping grow the information-based economy.

8   Florida TaxWatch Briefing. “Legislature should Reduce Florida’s High Communications Services Tax”
9   Tax Foundation. “Wireless Taxation in the United States 2014”. October 2014
10   Ibid
11   Ibid

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