DIRECTV and DISH Network Request Refund From North Carolina for Discriminatory Taxes

[John Corn]

Satellite TV vs. Cable Debate Heats Up; Satellite Providers Intend to

File Lawsuit if Refund is Not Obtained for Customers in 90 Days

DIRECTV, Inc. and EchoStar Satellite Corporation and its DISH Network, the nation's leading providers of satellite TV services, are challenging the discriminatory taxes imposed on direct broadcast satellite (DBS) customers by North Carolina.

These sales taxes are not imposed on local cable television services, even though satellite television companies compete with incumbent cable operators in the same market.

The satellite TV companies have submitted a request to the North Carolina Department of Revenue to obtain refunds for their customers of approximately $30 million of sales taxes paid by them in North Carolina since Jan. 1, 2002. Under North Carolina law, this is a required first step in challenging this tax in North Carolina, where there are more than 700,000(a) satellite TV customers. If the North Carolina Department of Revenue does not agree to provide the refunds within 90 days, the companies plan to file a lawsuit against the State of North Carolina because the statute that imposes a five percent tax on their customers in the state is unconstitutional and otherwise unlawful. Among other things, the provision violates the Commerce Clause of the United States Constitution, which prohibits state taxes that discriminate against interstate commerce or are not fairly related to the services provided to the taxpayer.

http://www.corporate-ir.net/ireye/ir_site.zhtml?ticker=dish&script=410&layout=-6&item_id=427103

[spanishannouncetable]

About time !!!
:D

[raj2001]

Do cable operators in NC pay/collect a "franchise fee" or something of the sort? I know they do that here in NYC. If so, I see nothing wrong with charging the same franchise fee to satellite providers or removing it for both cable and satellite providers.

[bluevoyager]

Great I am in full support of this lawsuit.

[bills976]

Do cable operators in NC pay/collect a "franchise fee" or something of the sort? I know they do that here in NYC. If so, I see nothing wrong with charging the same franchise fee to satellite providers or removing it for both cable and satellite providers.

There's a difference, though. Franchise fees are paid to local towns for the use of poles and other public right-of-ways in order to deliver the actual cable to each household. In the case of DBS, the only right-of-way is the air... and if they're going to tax that, shame on them.

Also there's interstate commerce. Under the Constitution, only the feds have the right to tax companies that don't have a 'business presence' in the state that they're doing business with. This of course gets us into the Internet Sales Tax debate, which Congress has a lot of fun with every term.

[catman]

California wants to tax satellite I say no . tax cell phones . Everyone has one today . 3% federal tax 3% state tax . So they have to pay . All they do is go off in church and resterants . They go off in movie houses . What did you do BEFORE , cell phones became known .

[Geronimo]

ONE justification for the franchise fees is to pay localiites for the items mentioned above. But another one is to raise revenue pure and simple. YOu can call it a tax or a fee but it is basically a tax. As for not taxing a company with no business presence I am not so sure that this is so. Many states axpect you to pay a tax on mail order purcahses etc. I think the collection rate is low but they do ask you to pay. Basically they are taxing an economic transaction.

[catman]

Spending is down due to high unemployment . NO . Bush don't care . He will when it hits home .