The Wireless Infrastructure Association opposes a proposed Hawaii state bill it believes, if passed, threatens real estate investment trusts (REITs). The state legislature is considering Senate Bill 2697, which would eliminate a tax deduction for REITs.
Many of the owners of wireless facilities in Hawaii are REITs, points out WIA in a letter to the Hawaii House Finance Committee. WIA members “are working around the clock” to meet critical connectivity needs to meet this demand in Hawaii during the pandemic, writes WIA President/CEO Jonathan Adelstein.
“These networks are also critical to maintain everyday services including public safety, education, and economic development. Hawaii requires robust wireless infrastructure to support the massive growth in the usage and deployment of advanced wireless networks,” according to the WIA executive. Continue Reading
“As enacted, SB2697 would stymie investment in Hawaii’s wireless infrastructure and deter ongoing 5G deployment, stifling broader economic growth in Hawaii for years to come,” says WIA. “The wireless infrastructure supporting today’s providers is financed with private capital. As REITs, these companies, which include wireless tower companies, data centers, and fiber providers, are able to drive the industry forward with increased investments in towers, small cells, and fiber to support wireless carrier demand for more network capacity and rollout of advanced wireless services,” writes Adelstein in the letter that was shared with Inside Towers.
REITs contributed the equivalent of 15,000 jobs in Hawaii and paid an estimated $150 million in property taxes in 2017, according to WIA. He says the enactment of SB2697 would deter wireless infrastructure development in Hawaii by WIA’s REIT members since an investment in Hawaii would be more costly than in the other 49 states which do not have such a tax.
Supporters say the measure closes a loophole that allows REITs to avoid paying Hawaii’s corporate tax as the legislature looks for funding during the pandemic. “Due to the loophole, we are losing out on tax revenue that could be used to pay for programs and projects that benefit everyone. It is especially needed during the coronavirus pandemic,” writes John Kawamoto in an Op Ed for Honolulu Civil Beat. Kawamoto is a member of Faith Action for Community Equity and a former legislative analyst.
REITs own properties in Hawaii that earn an estimated profit of $1 billion a year, according to the analyst. If Hawaii’s corporate tax were applied, $60 million in tax revenue would be generated, estimates Kawamoto.
SB 2697 passed the state Senate before the legislature went into recess, and the measure is now before the House. It passed the Economic Development and Business Committee and will go to the Finance Committee next.