Pa. Tax Coalition Builds

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Harrisburg, Pa. -- Cable operators will join broadcasters
and other businesses in a broad coalition to reaffirm a Pennsylvania state-tax exemption
that gave the industries breaks on equipment costs.

The future of the exemption -- which had only been extended
to include cable during the past few years -- is in doubt due to a court case involving
the state Department of Revenue and Pittsburgh Plate Glass.

The manufacturing-tax exemption allowed breaks on some
equipment in long-term use, such as cameras and transmitters. The exemption came into play
when figuring such payments as franchise taxes.

Designed initially as a job-creation bill, the tax
exemption saves Pennsylvania businesses an estimated $700 million per year, according to
Pennsylvania Cable & Telecommunications Association president Bill Cologie.

But two years ago, PPG submitted tax documents attempting
to apply the exemption to equipment in an out-of-state factory managed by the
Pennsylvania-based manufacturer. State-tax officials refused the exemption, resulting in a
lawsuit.

PPG won, but the state appealed the lower-court ruling to
the state Supreme Court. The state's high court then threw out all of the exemptions,
citing constitutional problems.

The business coalition will attempt to draft legislation
that will meet the constitutional challenge. Backers hope to complete the draft by the end
of the year so that it can be fast-tracked by the legislature.

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