House Bill 5446 (sHB5446 File No. 372) introduces a comprehensive overhaul of the taxation system for communications services providers in Connecticut, effective October 1, 2024. The bill redefines key terms such as "communications services provider" and "communications services," and sets a new quarterly tax on gross earnings from providing these services. It specifies the inclusion of various sources of gross earnings subject to taxation and exempts state entities under section 4d-82. The bill also revises the tax rates for gross earnings, setting a flat rate of five percent, which can be reduced by certain assessments and fees. It repeals and replaces sections of the general statutes to update the taxation and assessment of real and tangible personal property owned by companies involved in the manufacture, transmission, or distribution of gas, electricity, or water, and clarifies that such property is to be listed and taxed in the town where it is situated based on its fair market value.

The bill also addresses the provision and funding of community access programming (CAP). It outlines criteria for selecting an organization to provide CAP, mandates financial and technical support from companies, and allows for hearings to reassess an organization's ability to continue its responsibility for CAP. Changes to outreach programs, scheduling policies, reviews, and evaluations of CAP are introduced, along with a requirement for annual reporting to the authority. The bill establishes a funding mechanism for CAP based on the total amount received from subscriber fees in the fiscal year ending June 30, 2015, adjusted annually for inflation, and outlines the process for assessing fees to certificate holders of cable or video franchise authorities. It also includes provisions for the transfer of assets from an organization ceasing CAP operations to a successor or another nonprofit within the franchise area. The bill is expected to result in a General Fund revenue gain and incurs a one-time cost to the Department of Revenue Services for system updates and administrative expenses. It eliminates a property tax exemption on certain personal property used for telecommunications and cable services, leading to a grand list expansion.

Statutes affected:
Raised Bill: 12-256, 12-258, 12-80, 16-331a, 16-331cc
ET Joint Favorable: 12-256, 12-258, 12-80, 16-331a, 16-331cc
File No. 372: 12-256, 12-258, 12-80, 16-331a, 16-331cc