Radio equipment tax break bill goes to Abbott

Legislation reinstating a sales tax exemption for radio stations’ digital transmission equipment has won final passage and is headed to Governor Greg Abbott for his signature. The measure makes tax policy on the equipment consistent after a 2010 administrative ruling stripped the ability for radio broadcasters to claim the exemption.

HB 2507 by Rep. Kyle Kacal, R-College Station, passed the House and Senate almost unanimously. Sen. Kel Seliger, R-Amarillo, carried the measure in the upper chamber. Both relished the opportunity to ensure that small market radio stations and small operators that didn’t go digital when the exemption was first in place could bring the benefits of HD Radio to their communities.

TAB Treasurer Ben Downs of Bryan Broadcasting and Kevin Anderson, general manager of KKHT Bay City, testified in favor of the measure before the tax-writing House Ways & Means Committee last month. Downs reprised his testimony for the Senate Finance Committee in early May.

Reinstating the exemption was one of TAB’s top two priorities for the 2015 legislative session. It had been in place for nearly nine years when in 2010 an administrative law judge in Comptroller Susan Combs’ office peeled it back in response to a non-member radio station’s refund request.

The station had taken the bait from a tax refund firm that promised to review the station’s state sales tax payments, identify overpayments and take a cut of the eventual tax refund.

The judge studying the request reviewed the law, determined it did not specifically mention “radio” and on that basis repealed the exemption.

Efforts to reinstate it in 2011 were doused by the state’s fiscal crisis at the time, and in 2013 TAB focused on – and won – a battle with the RIAA over pre-1972 song recordings.

Once Abbott signs the bill, the exemption will be in place prospectively, meaning that stations that purchased the equipment while the exemption was not in place will not be able to secure refunds of sales tax paid.

Questions?  Contact TAB's Oscar Rodriguez or call (512) 322-9944.