Summary
The Maine Supreme Judicial Court considered whether the broadband sustainability assessment imposed under 35-A M.R.S. § 9216 was a tax or a regulatory fee. The court held that the assessment was properly characterized as a fee because it furthered broadband infrastructure goals, conferred benefits on assessed users, was voluntary, and fairly approximated governmental costs or user benefits. The court affirmed the award of unpaid assessments, plus interest and costs, against Biddeford Internet Corporation.
Topics
Practice areas
Questions Presented
- Whether the broadband sustainability assessment imposed by 35-A M.R.S. § 9216 was a fee or a tax.
- Whether the assessment, if a tax, was a valid business excise tax rather than an unconstitutional property tax.
Holdings
- The broadband sustainability assessment was properly characterized as a fee rather than a tax.
- Biddeford Internet was required to pay the broadband sustainability fee, and the judgment awarding the State and the Authority unpaid fees was affirmed.
Key quotations
“When determining whether an assessment is a fee or a tax, we consider four factors: (1) whether the primary purpose is to raise revenue or to further regulatory goals, (2) whether the assessment is paid in exchange for benefits not received by the general public, (3) whether the assessment is voluntary, and (4) whether the assessment is a fair approximation of the cost to the government and of the benefit to the party.” (¶ 20)
“We agree with the State and the Authority that the Legislature properly characterized this assessment as a fee, and, with that clarification, we affirm the judgment.” (¶ 25)
Factual background
The Maine Legislature created the ConnectME Authority to expand broadband service in unserved and underserved areas. A federally supported dark-fiber project, the Three Ring Binder, was constructed and made available to telecommunications providers, including Biddeford Internet Corporation. Section 9216 imposed a broadband sustainability fee on entities obtaining federally supported dark fiber, with most collected funds dedicated to broadband infrastructure expansion. Biddeford Internet paid approximately $15,000 in fees before stopping payments, ultimately leaving $406,852 unpaid through the statute's repeal.
Procedural history
The State and the ConnectME Authority sued Biddeford Internet Corporation in the Superior Court to collect unpaid broadband sustainability fees. The case was transferred to the Business and Consumer Docket, which held a nonjury trial and entered judgment for the State and the Authority. The trial court characterized the assessment as a business excise tax, and the parties appealed and cross-appealed that characterization.