Oregon Tax Breaks Provide Unanticipated Benefits To Comcast Corporation (NASDAQ:CMCSA)

Oregon Tax Breaks Provide Unanticipated Benefits To Comcast Corporation (NASDAQ:CMCSA)

Comcast Corporation (NASDAQ:CMCSA) will also benefit from Oregon’s tax breaks that were designed to attract Google Fiber from Alphabet Inc (NASDAQ:GOOGL).

Law makers decided to institute a regulation lowering property taxes for internet providers that offer Gigabit speeds. The decision was made to attract Google Fiber into the state, but they did not anticipate that Comcast would also benefit from the tax breaks. This is because the company also offers Gigabit speeds with a 2Gbps service. Unfortunately, Comcast’s service is steeply priced at $300 per month with a startup fee of $1,000.

Google’s fiber offering known as Google Fiber has quickly risen to fame because of its fast gigabit speeds which it offers at $70 per month with no extra initial fees. Google’s offering is competitively priced compared to the Comcast Gigabit offering. Rep. Phil Barnhart revealed that the tax breaks were instituted to attract investments in new networks. Unfortunately, regulators did not consider whether companies offering pricey gigabit services would also benefit from the tax breaks.

Public Utility Commission of Oregon stated that Comcast legally qualifies for the tax exemption because the law makers did not include any clause to prevent other firms from benefiting. So far the tax breaks favor Comcast, Google and Frontier Communications Corp (NASDAQ:FTR). However, Google is yet to launch the fast internet service in Oregon. Comcast had previously filed a lawsuit against the State Department of Revenue over the hefty tax, but the company lost the case in the Oregon Supreme Court.

Government officials who think that Comcast should not get the tax break claim that the regulation allows the firm to retail millions of dollars which would have funded other areas such as libraries and schools among others. Comcast has not revealed the tax relief benefits in terms of financial numbers, but the company stated that it was pleased with the ruling by the Oregon Public Utilities.

Analysts claim that the some individuals might be disappointed by the tax break ruling because it allows companies such as Comcast to profit yet it did not speed up Google Fiber in the state.