Steve Mehs
06-02-03, 03:22 AM
Cable interests in Ohio took issue with claims from the satellite TV business that a proposed state sales tax on dish services may be unconstitutional.
The Ohio Cable Telecommunications Association said white papers on the tax proposal authored by satellite TV interests and sent to the Ohio Senate contain "groundless" claims. Satellite industry charges that a state dish tax would be discriminatory and probably tossed out in court are "satellite’s last-ditch efforts to maintain its current advantage over the cable industry," said Ed Kozelek, executive vice president and legal counsel for the association.
"Their threat to sue the state if the sales tax is imposed shows how crucial they believe their existing competitive advantage to be," he said.
Kozelek also said his group is not advocating that satellite services be subjected to a sales tax. "But to double the cable customer’s existing tax burden - which a state sales tax would do - is just plain wrong."
He added, "The satellite industry’s claim that cable’s franchise fees are not 'taxes' is baseless. Federal law even uses the 'tax' in the definition of franchise fee."
Last week, law firms working for DirecTV and EchoStar submitted white papers to the Ohio Senate Taxation Committee concerning the satellite TV tax. The white papers found that the proposed tax provision likely would not hold up in state or federal court.
Satellite interests also pointed out that equating a franchise fee to a dish sales tax is an apples to oranges comparison. Franchise fees cable pays are for the use of local services and infrastructure, such as streets and highways that have cable. DBS does not use any state or local services, and doesn't burden the state or local infrastructure.
Meanwhile, Andy Wright, president of the Satellite Broadcasting and Communications Association, sent a letter last week to Connecticut Gov. John G. Rowland urging him to not include in his state budget a double taxation on DBS subscribers.
At the moment, Connecticut collects a 6 percent sales tax on DBS service, which generates an estimated $2.8 million annually for the state, in addition to revenue from the taxation of sales of satellite equipment to satellite customers.
From SkyReport (http://www.skyreport.com) (Used with Permission)
The Ohio Cable Telecommunications Association said white papers on the tax proposal authored by satellite TV interests and sent to the Ohio Senate contain "groundless" claims. Satellite industry charges that a state dish tax would be discriminatory and probably tossed out in court are "satellite’s last-ditch efforts to maintain its current advantage over the cable industry," said Ed Kozelek, executive vice president and legal counsel for the association.
"Their threat to sue the state if the sales tax is imposed shows how crucial they believe their existing competitive advantage to be," he said.
Kozelek also said his group is not advocating that satellite services be subjected to a sales tax. "But to double the cable customer’s existing tax burden - which a state sales tax would do - is just plain wrong."
He added, "The satellite industry’s claim that cable’s franchise fees are not 'taxes' is baseless. Federal law even uses the 'tax' in the definition of franchise fee."
Last week, law firms working for DirecTV and EchoStar submitted white papers to the Ohio Senate Taxation Committee concerning the satellite TV tax. The white papers found that the proposed tax provision likely would not hold up in state or federal court.
Satellite interests also pointed out that equating a franchise fee to a dish sales tax is an apples to oranges comparison. Franchise fees cable pays are for the use of local services and infrastructure, such as streets and highways that have cable. DBS does not use any state or local services, and doesn't burden the state or local infrastructure.
Meanwhile, Andy Wright, president of the Satellite Broadcasting and Communications Association, sent a letter last week to Connecticut Gov. John G. Rowland urging him to not include in his state budget a double taxation on DBS subscribers.
At the moment, Connecticut collects a 6 percent sales tax on DBS service, which generates an estimated $2.8 million annually for the state, in addition to revenue from the taxation of sales of satellite equipment to satellite customers.
From SkyReport (http://www.skyreport.com) (Used with Permission)