Charter Communications will drop a proposed ballot initiative after reaching a settlement with the state in its dispute over property taxes, the state’s revenue director said Thursday.
The settlement agreement lets Charter keep $9 million of $34 million in disputed taxes from 2010-2013, while the other $25 million will be distributed to the state and counties, said Montana Department of Revenue Director Mike Kadas.
Charter will pay an additional $8.3 million in taxes for the years 2007-2009. Going forward, the company will be taxed at the 6 percent rate for telecommunications service companies, not the 3 percent cable company rate.
Charter’s proposed ballot initiative would have asked voters to reverse a Montana Supreme Court decision that reclassified the company to pay the 6 percent rate. The organizers faced a Friday deadline to turn in more than 24,000 signatures to qualify for the Nov. 4 ballot.
Under the settlement, Charter agrees not to seek certification of the ballot initiative and to withdraw its request to the U.S. Supreme Court to take up its case.
Kadas said the initiative deadline influenced the timing of the settlement, but added the deal was good for Montana taxpayers.
“I think there’s probably a temptation to say it was the initiative that motivated the settlement,” Kadas said. “I just want to say very clearly this is a very good settlement, and I would have done it whether there was an initiative or not. The fact that there was an initiative, I think, helped create a deadline.”
Lee Newspapers of Montana first reported the settlement agreement.
Charter spokesman Brian Anderson told Lee Newspapers the issues in the initiative have been resolved and the company appreciated Kadas for his leadership in resolving the tax issues.