Comcast drops bid for “gigabit” tax cut that was created for Google Fiber

Comcast has agreed to pay $155 million in back taxes to Oregon in order to settle a nine-year property tax dispute. Comcast will also drop its attempt to secure a tax break that Oregon created as part of a failed attempt to bring Google Fiber to the state.

Oregon Governor Kate Brown announced the settlement with Comcast yesterday, noting that the legal battle “likely would have continued for many more years because several distinct and complex legal questions were in dispute.

” Oregon accepted the $155 million payment despite previously arguing that Comcast owed $200 million.

“The cable TV company’s fight with Oregon tax collectors dates to 2009, when the state changed its methodology for assessing Comcast’s telecommunications equipment,” wrote.

The tax is an unusual one, using “central assessment” to tax a company’s property based on such nebulous factors as the value of the company’s brand. Comcast sued, and the state Supreme Court ruled against Comcast in 2014.

“The company didn’t pay up, though, continuing to contest aspects of the Oregon tax law,” wrote.

Under yesterday’s settlement, “Comcast acceded to the central assessment methodology,” Brown’s announcement said.

Gigabit tax break

The settlement will also affect what Comcast pays in future taxes. The Oregon legislature in 2015 voted to reduce property taxes for companies that offer gigabit-speed Internet service. That move was designed to lure Google Fiber to the state, but Comcast ended up seeking the tax break when it started offering gigabit speeds.

The gigabit tax break backfired, as Google Fiber’s deployments stalled and the ISP still hasn’t offered service in Oregon. For Comcast, the tax break reportedly would have been worth $15 million a year. The gigabit tax break could also lower Frontier Communications’ bill by $2.5 million a year.

Efforts to repeal the tax break in the state legislature this year failed.

But under the settlement, Comcast “agreed to withdraw its gigabit exemption application,” Brown’s announcement said. “If approved for the exemption, Comcast’s property tax burden would have been significantly reduced.”

The settlement thus “guarantees that Comcast will pay significantly higher taxes going forward than it would have under the existing gigabit exemption,” the governor’s announcement said.

Comcast told that the settlement “gives local communities certainty around funding, provides Comcast predictability on property taxes, and enables us to continue to make significant investments in Oregon.”

The ten Oregon counties where Comcast operates “will soon be given guidance from the state on how to bill the company for their share of the back taxes,” Oregon Public Broadcasting reported. “The counties will then distribute that money to schools and local governments.”

Brown urged local governments to use the Comcast payments to pay unfunded pension liabilities.

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