Home > ADVOCACY > Where We Stand > Telecommunications GRT Letter

February 16, 2010


Hon. William T. Stachowski (sent to all members of the WNY State delegation)
New York State Senate
918 Legislative Office Bldg.
Albany, NY 12247

Dear Senator Stachowski:

On behalf of the 2,500 employer members of the Buffalo Niagara Partnership, I write in strong opposition to the inclusion of an expanded gross receipts tax (GRT) on telecommunications services in the 2010-11 Executive Budget. We need your leadership to protect the state’s already overburdened taxpayers by working to eliminate this tax increase from the Governor’s budget proposal.

New York already holds the dubious distinction of imposing the highest number of state and local taxes on telecommunications – 10 in total – and the proposed tax would increase the local GRT by 2% raising the average tax rate on telecommunications services to 19.3%.  Totally $110 million, this tax hike on service providers and their customers places another financial burden on New Yorkers at a time when they can least afford it.

The negative effect of increasing the local GRT will be twofold. Beyond hurting struggling New Yorkers, it hinders telephone companies’ ability to invest in infrastructure and jobs throughout the state. In turn, this thwarts the state’s effort to bring much needed affordable broadband service to our state. 

Overall, raising taxes to support Albany’s spending “habit” is a failed concept – as evidenced by the state’s growing budget deficit. Unchecked, the state’s deficit will continue to grow to over $30 billion within five years. Nickel-and-dime taxes such as the proposed telecommunication services tax will not mitigate that hole in the budget. Reducing government spending is the only way to right the state’s fiscal ship.

Strong fiscal and economic recovery is needed in New York but taxing an industry that drives innovation, investment and economic growth is not the answer. New or increased taxes – including the proposed GRT tax as a revenue item in Governor Paterson’s Executive Budget – are unacceptable. Given the financial burden this tax increase would place on New Yorkers, the Partnership strongly encourages you to eliminate the expanded local GRT tax in the 2010-11 Budget. 

Sincerely,

Andrew J. Rudnick