Local TV Station Is Not a High-Tech Company, DC Court Rules

Washington NBC station WRC will have to pay the District government nearly $79,000 in back taxes after a DC judge ruled the television station does not qualify for breaks the city gives to high-tech businesses. WRC was ordered to pay up after it unsuccessfully argued its tax bill in the DC Court of Appeals, Washington Business Journal reports.

The station argued it was eligible for tax incentives the District first offered in 2000 to prevent losing invenstments from technology firms to Northern Virginia, which has a robust high-tech economy.

According to the opinion, WRC, which is owned and operated by NBCUniversal, argued it derived at least 51 percent of its revenue from “information and communication technologies, equipment and systems that involve advanced computer software and hardware, data processing, visualization technologies, or human interface technologies, whether deployed on the internet or other electronic or digital media.”

But according to the three-judge panel that issued the decision, simply using computers and the internet—which many businesses in the early 21st century do—isn’t enough to earn a high-tech tax discount. The law that created the tax breaks, the New E-conomy Transformation Act of 2000, was designed to promote a “new high-technology economy,” as the DC Council members of the age called it.

“This statement of purpose, we observe, contains no hint that the DC Council saw advantage in providing tax exemptions to companies that merely use technology in their business,” the judges write.

At one point, WRC argued it was eligible for the tax break because it uses technology to sell advertisements. But if that qualified the station, then nearly any business could claim to be a high-tech company, the judges write. “If WRC’s sale of advertising via technology-enabled television programming counts as a QHTC activity, [Office of Tax and Revenue] maintains, then so would a similar technology-intensive provision of services for fees (in place of advertising) by, for instance, accounting, brokerage, or even law firms, with the resulting danger of a tax exemption swallowing up the taxation rule,” the opinion states.

If only there were tax breaks for being the employer of DC’s favorite newscaster, then WRC wouldn’t have to pay a dime.

Benjamin Freed

Staff Writer

Benjamin Freed joined Washingtonian in August 2013 and covers politics, business, and media. He was previously the editor of DCist and has also written for Washington City Paper, the New York Times, the New Republic, Slate, and BuzzFeed. He lives in Adams Morgan.