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Richard Sjoberg, Thief River Falls, Minn., Published April 30 2013

Letter: Repealing exemption sends wrong message to businesses

As an owner of a cable company serving rural communities in northwest Minnesota, it is with great interest and concern that I read about the Minnesota Legislature’s recent efforts to repeal a long-standing sales tax exemption on the purchase of cable, wireless and telecommunications equipment.

The sales tax exemption is a real incentive for companies like mine to invest and build broadband capabilities to hard-to-serve areas. We know firsthand how difficult that can be. Despite the difficulties, our company and others continue to deploy digital video and broadband services in rural areas, even though the required upgrades are very expensive and capital intensive. But Sjoberg Inc. is willing to undertake the risk of deploying advanced networks in low-density, high-cost areas because of incentives like the sales tax exemption.

As a company, we have been committed to delivering new broadband services not only to residential and business customers but also to schools, hospitals, city governments and countless other entities in rural communities.

We realize that the Legislature is looking to generate additional revenue in the state, but repealing business-friendly policy that attracts private investment in technology is not the best way to do it. This repeal would have unintended consequences that would stall the deployment of broadband across the state.

In addition, as a member of the Governor’s Task Force on Broadband, it’s clear to me that this repeal would create a significant barrier for service providers to expand their service and would run counter to the recommendations of the task force.

In fact, the task force recommended expanding the sales tax exemption. In our December 2012 report, the task force noted that the state is not on track to meet its 2015 statutory deadline for ubiquitous broadband access and that more must be done to correct this course.

Minnesota currently ranks 25th in the country in terms of average broadband connection speed. Just last week, Fast Company Magazine ranked Minnesota 46th in the country for innovation and startups. Our economy, which relies increasingly on access to broadband for startup connections, cannot afford more barriers to success.

Repeal of the sales tax exemption threatens to delay the already-slow progress the state is making to meet its broadband goals and would particularly affect broadband expansion to unserved and underserved areas in Greater Minnesota, something nobody wants to see.

We sincerely hope that Minnesota maintains the sales tax exemption and continues to attract new business, encourage technology investment and support expansion of broadband capabilities across the state.

Sjoberg is CEO of Sjoberg Inc.