McCain Brings Back Improved Tax Certificate Measure

Sen. John McCain, R-Ariz., Ranking Republican of the Commerce Committee and former committee chairman has introduced a bill designed to open up telecom ownership to all size owners. The Telecommunications Ownership Diversification Act of 2002, S-3112, would give sellers of telecommunications businesses a tax deferral when their assets are bought for cash by small business telecom companies.
Both FCC Chairman Michael Powell and NAB President/CEO Eddie Fritts endorsed the measure.
The bill is similar to the former minority tax certificate program, killed by Congress for alleged abuses. This bill differs in that it applies to all telecom companies, not just broadcasters.
“The market-based incentives in this bill are the most effective way of leveling the playing field between small business owners and CEOs of huge corporations trying to purchase a telecommunications business,” said McCain.
The measure would also encourage the entry of new players and the growth of existing small businesses by enabling the seller of a telecom business to claim a tax deferral on capital gains if it invests the proceeds of that sale in purchasing an interest in an eligible small telecom business.
To limit the potential for abuse, the Act would require the eligible purchaser to hold any property acquired for three years.