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Special session: GOP has unlikely DFL ally in telecom tax tussle

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Republicans have an unlikely ally in their quest to kill a new sales tax on telecommunication equipment purchases during a proposed special session of the Legislature, MPR reports.

Former Speaker of the House Margaret Anderson Kelliher, a Democrat and leader of Gov. Mark Dayton's Broadband Task Force, opposes the tax, and she wrote the governor a letter outlining her concerns last week, MPR reports. Kelliher is also director of the Minnesota High Tech Association, which advocates for tech issues.

The tax, which affects companies big and small in the state, including CenturyLink and Comcast, will likely curb spending on new infrastructure and hurt job growth, Kelliher told Dayton, MPR reported. It's estimated that the state could collect up to $75 million in taxes under the new law in the next two years, and Kelliher says that's money that will not be spent by companies to upgrade Internet and cell phone service in rural areas.

The tax hurts the state's broadband goals, Kelliher says. Dayton named 15 people to the broadband panel in November 2011, directing them to develop policies to promote the expansion of broadband access in Minnesota. Dayton wants “border-to-border” high-speed Internet and cell-phone access across the state by 2015.

Dayton and legislative leaders have been at odds over a special session Dayton would like to happen on Sept. 9. The main purpose of the session would be to approve disaster-relief spending for 18 counties battered by June storms.

Dayton also would like to approve a farm machinery exemption to a new tax on business equipment repairs, MPR notes. Republican leaders would like to broaden the scope of the session even more, to repeal the entire tax on business equipment repairs as well as a new tax on warehousing services.

Dayton and legislative leaders are set to meet Wednesday to finalize the agenda for a special session, MPR reported Tuesday.

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