Under Oregon tax law, the Deaprtment of Revenue is responsible for the annual assessments of certain transportation, communication, and energy properties for property tax purposes. These annual assessments are sent to the county assessors and tax collectors for the billing, collection, and ultimately the distribution of property tax dollars.

In 2014, the Oregon Supreme Court upheld the Oregon Department of Revenue central assessment of Comcast as “data transmission services” under Section 308.505(3) of Oregon statutes. In late 2020, the DOR stretched the definition of “data transmission services” to cover radio and television stations which would add an enterprise valuation tax on Oregon TV and radio broadcasters. The legislature never intended broadcasters to be centrally assessed and HB 2331, proposed by State Representatives Daniel Bonham (R-The Dalles) and E. Werner Reschke (R-Malin), provides a fix by explicitly exempting broadcasters from the assessment. The bill is mostly just adding the phrase “Communication” does not include over-the-air broadcasting to current law.

The DOR’s central assessment model is based on enterprise value and requires valuation of intangible assets, even though each broadcaster’s most valuable intangible assets -- FCC licenses -- are exempt from assessment under Section 308.671 of the Oregon statutes.

The COVID-19 pandemic has decimated the broadcast industry. But even during these trying financial times, the state of Oregon and the federal government have received immeasurable value from local broadcasters who have continued to inform our communities on COVID-19, rampant wildfire destruction, Census collection, hectic election coverage and other essential community information. Broadcasters continue to put the safety and education of our communities first.

A D V E R T I S E M E N T

A D V E R T I S E M E N T

Ad revenues are the most significant source of income for broadcasters. Unlike cable and satellite companies, broadcasters do not benefit from a subscription-based revenue stream. Ad revenue has plummeted due to shutdowns, even as we help our communities understand and adhere to shut-down regulations. At this point there is no recovery in sight. Local advertisers have either closed or can no longer afford to advertise. This additional tax burden is not only financially insurmountable but constitutes a lack of recognition of the free airtime provided to local, state, and federal governments.

In the Comcast decision, Oregon’s Supreme Court ruled that data transmission services, which are centrally assessed, provide the means to send data from one computer or computer-like device to another across a transmission network. While DOR has determined that over-the-air broadcasters are included in this definition, reasonable legal minds would disagree. DOR’s interpretation of the law shows a wholesale misunderstand of the broadcast business.

The bottom line? A unilateral change in how over-the-air broadcasters is assessed based on the DOR’s legal interpretation and regulatory overreach will have a far-reaching negative impact on broadcasters throughout Oregon, putting the survival of some of them in doubt.


--Staff Reports

Post Date: 2021-01-26 17:18:00

Last Update: 2021-01-27 20:19:08