DirecTV, DISH Battle State Taxes

[Steve Mehs]

DirecTV and EchoStar's DISH Network are getting the word out to subscribers concerning proposed tax issues in four states.

State lawmakers in California, Ohio, Nevada and Connecticut are considering legislation that would tax satellite TV services. DirecTV and EchoStar are collaborating for a Web site - which can be found at http://www.stopsatellitetax.com - that offers information on proposed taxes and how customers can contact lawmakers in each state about the issue.

"Urged on by our competitors, some legislators in these four states are considering new unfair and unwarranted taxes on satellite TV," a message on the Web site says. "Satellite TV is beamed to you from federally licensed spacecraft and makes no use of state or local infrastructure."

In addition, DirecTV is delivering information on the state tax issue through dedicated channel 246.

EchoStar CEO Charlie Ergen, addressing the state tax legislation during his monthly "Charlie Chat" with customers Monday night, took issue with the proposed bills. Ergen said proposed taxes in the four states are between 5 percent and 8 percent, "which is bigger than our price increases," he said.

Ergen also pointed out the bills don't ask for a tax on cable. He added that cable interests pushing the bills want "government to do a job for them instead of letting the markets work."

An EchoStar spokesperson said the company is looking at a number of ways to get involvement from its customers, including the possibility of a channel with information on proposed state satellite TV taxes.

From SkyReport (http://www.skyreport.com) (Used with Permission)

[AJ2086]

They put a message on 248 on DirecTV mentioning this. The also abreviated Connecticut wrong.

[raj2001]

Why isn't NY listed? I pay sales tax on my DirecTV DVR service.

[Tomsoundman]

I think it only lists states with pending legislation.

[Karl Foster]

Screw those states. There was no concerted effort to stop DBS tax in Utah during the last legislative session. My May 1st, our DBS tax went into effect costing me $4.36 each month. Where was the outcry from these providers when this tax went into effect?

To be fair, though, Charlie conveniently forgot to mention that cable companies have to pay franchise fees, which is another word for a tax. Often the fees cable companies pay the gov't, both local and state are far higher than the tax we'll be paying for satellite.

[jeffwtux]

Karl_F: BAD COMPARISON !!!!!!!!
Those fees or taxes(whatever you want to call them) are to the local cities or towns NOT TO THE STATES!!! The local cities in turn do NOT pay anything to the states. Thus there is NO STATE TAX PAID BY CABLE. Why do CITIES taxing cable companies for MONOPOLY USE of their city entitled the STATES to collect taxes from DBS??!?!?!?!

These taxes are an outrage and just show the power that greedy corporations have over the government. These are bought and paid for by the cable companies. If I lived in Ohio, I'd be harassing my State Rep every day.

[jeffwtux]

Make sure that any official that supports such legislation is branded with the scarlet letter that they were bought and paid for by the cable lobby. Make sure this comes back to haunt them at election time. Plus, as with all sales taxes, THIS IS A TAX ON THE POOR!!! EVEN DBS TAX. Sales taxes always hurt the poor more. DO NO LET YOUR STATE REP GET AWAY WITH THIS WITHOUT EXPOSING THEM.

[lug1]

hello everyone,
karl, I am with you about other states crying about sales tax. In Louisiana we are lucky that we only have to pay .56 for sales tax.

[jeffwtux]

lug: so you pay .56 sales tax on DBS??? Does cable have to pay sales tax? If so, then at least it's consistent, although I don't like sales tax being a democrat. The states are all in major debt so the money has to come from somewhere, as long as it's fair and consistent. However, sales taxes stifle consumption which is the building block for an economy. Supply side logic has NEVER worked in the real world. Even under Reagan, while GDP was stimulated, jobs were never created like they were under Clinton.

[Scott Greczkowski]

I just sent off a note to my reps about this issue.

Here in Connecticut our total tax each month on our satellite bill will be a total of 11% of the total bill.

I can see paying the 6% sales tax. But an additional 5% for NOTHING does not compute for me.

I understand that cable subscribers must pay franchise fees (this money goes to the towns) because the cable companies use public roadways to bring you their signal, but satellite on the other hand it uses zero local resources, all the upkeep to keep the signal coming in I must do and pay for on my own.

I urge everyone to say no to extra taxes on satellite television.

[BobaBird]

And haven't the DBS operators already paid for the use of public resources when they obtained their transponder licenses? It's not called a franchise fee, and it goes to the FCC instead of Town Hall, but I see it as an equivalent expense/fee/"tax" that DBS has not escaped.

[Nick]

Why shouldn't state and/or local gov'ts tax DBS? It is a legitimate source of revenue, which state and local gov'ts sorely need. Everything else is taxed, why not DBS?

Besides, It's an "Airspace Access Assessment" (AAA), not a tax.

Karl F said "cable companies have to pay franchise fees"

Actually, Karl, the cablecos pass the franchise fee on to their subs.

"Ultimately, all costs are borne by the consumer"

[Scott Greczkowski]

Nick, your missing the point, here in Connecticut we already pay 6% tax for satellite service.

The state wants to add a 2nd 5% tax to subscribers bills.

That's double taxation in my book.

[BobaBird]

Originally posted by Nick
Why shouldn't state and/or local gov'ts tax DBS? It is a legitimate source of revenue, which state and local gov'ts sorely need. Everything else is taxed, why not DBS?The question is, why just DBS?

Cable companies pass along a franchise fee for use of public right-of-way and perhaps public access programming.

Satellite operators paid for the use of DBS spectrum and are required to carry public interest programming.

If they want to add pay television to the list of products, services and transactions that are subject to taxation they can do that. What I see are proposals to tax pay TV if it is delivered by DBS. So if DBS is to be taxed, why not delivery by cable, local wireless, and where available, the phone company?

[rtt2]

I used the www.stopsatellitetax.com website and got a reply from one of my reps today. (Just one day after I sent it.)

Dear Mr. *******,
Thank you for your email regarding taxing satellite users. You are correct. There is an issue with government taxing the very services that are becoming more cost effective due to competition. We have much of the same with the new tax breaks from the federal government being reduced by new taxes by our state governments. I certainly will be taking your position into
consideration as these issues emerge during this session and will continue to fight this and other taxes proposed.

State Representative ***********
Assistant Minority Leader
District ***

[TNGTony]

On a cable access show locally "Columbus Report", state rep Tyrone Yates was asked from one of the viewers via e-mail point blank how the Ohio state legislature could single out just one industry for the tax. I have to give Tyrone credit for his candid answer:

1) Because we can.
2) Cable pays a "franchise fee" that satellite doesn't
3) There are 700,000 Satellite subscribers (read registered voters) versus 3.8 million cable subscribers so that many less people to get mad and vote us out--Rep. Yates claims he is for taxing cable and DBS equally but is in the minority.
4) Cable TV has a strong lobby
5) We NEEEEEEEEEEED the money! Ohio's budget is in as bad a shape as its been in 60 years.
6) Because we can... again.

I don't agree with many of the reasons, but that is what one of the reps said.

See ya
Tony

[rtt2]

Whats next taxing people with satellite radios? This is just plain crazy.
This type of taxing behavior is easy to begin but impossible to repeal.

[Scott Greczkowski]

I just got a note from one of my senators about this. I used parts of Echostars letter and also put in some wisdom of my own. :D

Here is his replyDear Mr. Greczkowski:

Thank you for your email regarding SB 1160: AN ACT CONCERNING REVENUE ADJUSTMENTS. This bill is currently on the Senate Calendar but has not yet been brought before the Chamber. Please know that when and if this bill comes before me in the Senate I will certainly keep your concerns in mind.
Thank you for taking the time to email me. It is imperative to hear from my constituents regarding important issues facing the State. You offered a lot of useful information in your email and I appreciate it. If I can be of further assistance, please do not hesitate to contact me.

Sincerely,

Biagio "Billy" Ciotto, State Senator

[durl]

I live in Tennessee and already have a sales tax applied to my Directv bill. But with a 10% sales tax already in place, you pretty much expect them to tax everything to death. For those of you in the states where the legislation is pending, keep up the fight to stop the tax. Once they start a tax, they can jack it up anytime they want.

Anyway, this whole fiasco is just further proof that a good number of the bureaucrats just take us for idiots. Most try to get elected by telling us how they're going to look out for our interests, then they get up and take more of my money because "they can."

[Dgenx321]

Little messed up in the scanning process, but it's nice to get the letter.:)