DirecTV, EchoStar protest satellite tax in lawsuits

[Richard King]

http://biz.yahoo.com/cbsmb/050505/19747b13ac474cbc900ea4e72f503195.html?.v=1
SAN FRANCISCO (MarketWatch) -- DirecTV Inc. and EchoStar Communications Corp. and its DISH Network said Thursday that they have filed lawsuits in Florida and Kentucky challenging the constitutionality of provisions in the states' services tax law. The companies believe that the laws impose discriminatory taxes against satellite TV services in favor of competing services sold by cable TV companies.
end of article.

It would be nice if they could save me some money on my bill. :D

[Chris Blount]

Companies Take Sat Taxes to Court

DirecTV and EchoStar filed lawsuits in Florida and Kentucky challenging the constitutionality of taxes levied against satellite TV services delivered to consumers in each state.

The Florida lawsuit was filed in Circuit Court for Leon County. The other piece of litigation was filed in U.S District Court for the Eastern District of Kentucky.

Under Florida's communications services tax law, satellite TV customers shoulder a higher tax burden - 10.8 percent on retail sales - than their cable counterparts, who pay 6.8 percent, the companies said.

As for Kentucky, DirecTV and EchoStar said the state's new tax law superficially imposes the same rate of excise and gross revenue taxes on satellite companies as it does on cable, but in reality satellite TV will be taxed at a substantially higher rate than cable.

On the Kentucky tax, the companies said, "Cable companies are using their local franchise fees - a simple cost of doing business that gives them the right to tear up city streets and use utility poles - to offset the cable companies' overall tax obligation. Satellite companies, in contrast, pay the full amount of the tax, without any offsets. The result is added expense for satellite customers, compared with cable customers."

http://www.skyreport.com (Used with permission)

[Stalky14]

Well, here's to their success in Florida. I don't know where they get 10.8%, though.
The actual tax is like 13.7%(!)

But they make a very valid point:
The tax PLUS franchise fee on my $61/month lifeline cable+internet bill is at most HALF
of what it is on my $72/month Dish bill!

IIRC, Florida has the highest tax of all the states that have Satellite TV taxes, so if they're
going to fight it anywhere, this is the place. Florida was also one of the first states to get
such a tax passed (by burying it in a much larger telecommunications bill that nobody took
notice of until it was too late).

OTOH, the sales tax is reasonable, and there is no state income tax, the car tax is cheap, and there is no mandatory annual vehicle inspection.