Statement: Charter Communications Seeks Tax Break that Could Shift Millions in Taxes to Montanans

April 7, 2014 | Montana Budget and Policy Center

One of the nation’s largest providers of communications services wants Montana voters to give the company what it couldn’t get in court – a change in status that likely would lower Charter Communications’ tax bill while raising property taxes for Montana homeowners and small businesses.

Last month, Charter filed paperwork with the state to pursue putting an initiative on the November ballot that would cut the Stamford, Connecticut-based firm’s Montana property tax rate in half.

“If the initiative passes, our schools and other essential services would be threatened by Charter’s refusal to pay its fair share toward our state’s economic growth,” said Sarah Cobler Leow, Executive Director of Montana Budget and Policy Center. “It could mean higher taxes on homeowners and small businesses in more than half of Montana’s counties.”

Charter Communications, which provides cable TV, high-speed internet, and phone service to nearly 6 million customers in 29 states, disputes Montana law with regard to the state’s definition of what business the company is in. State law requires the property of telecommunication companies, and other utility property that crosses county or state lines, to be valued at the state level as a single unit, called “central assessment.” Charter Communications (formerly Bresnan Communications) claims it should be considered only a cable company, subject to a lower tax rate.

Charter sued the state to challenge the law, and the Montana Supreme Court ruled in December that the Montana Department of Revenue had properly taxed Charter Communications as a telecommunications company. The Court ordered Charter to pay millions of dollars in taxes owed for 2007 through 2009. Now the company is proposing a citizen’s ballot initiative to overturn the state’s highest court’s decision to centrally assess the company.   

Charter Communications holds property valued at $275 million in 31 Montana counties. The ballot initiative asks voters to cut Charter Communication’s property tax rate in half – from 6 percent to 3. This equates to lost revenue for the state from the fixed mills and would mean public schools and universities stand to lose millions of dollars in vital support. Additionally, homeowners and small businesses may see their taxes increase in order to cover the gap in local property tax revenue left by Charter Communications.