The Maine Supreme Court has found that a broadband sustainability fee (BSF) was a fee and not an unconstitutional property or invalid excise tax, and affirmed the lower court decision, even though the lower court erred and characterized the fee as a valid business excise tax.
The taxpayer, a telecommunications service provider, was required to pay a sustainability fee for accessing and utilizing dark fiber in a new route for fiber optic cables.
The taxpayer contended that the superior court erred by finding the BSF to be a valid business excise tax rather than a property tax. The court concluded that the legislature properly characterized the BSF as a fee and not a tax, after evaluating the following four factors:
- whether the primary purpose is to raise revenue or to further regulatory goals,
- whether the assessment is paid in exchange for benefits not received by the general public,
- whether the assessment is voluntary, and
- whether the assessment is a fair approximation of the cost to the government and of the benefit to the party.
Further, the court held that although the lower court erred in concluding that the BSF was a tax, the error was harmless because the taxpayer was required to pay the fee regardless of its categorization.
State of Maine v. Biddeford Internet Corporation, Maine Supreme Judicial Court, No. BCD-17-15, October 10, 2017, ¶200-872