# U.S. top court won't hear satellite TV providers' claim on state taxes



## dennispap (Feb 1, 2007)

"The U.S. Supreme Court on Monday rejected a bid by satellite television providers to challenge states taxes they say unlawfully treat them differently from cable TV companies.
The nine justices turned away a joint challenge from DirecTV Inc, a subsidiary of AT&T Inc, and Dish Network Corp over taxes in Massachusetts and Tennessee."

http://news.yahoo.com/u-supreme-court-wont-hear-satellite-tv-providers-143959180--finance.html


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## satcrazy (Mar 16, 2011)

cable is probably a contributor [$]

I give the two Sat Co.'s a round of applause for trying, though.


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## James Long (Apr 17, 2003)

When there are taxes that specifically apply to one service and not the other they should be fought. DISH and DirecTV were not fighting the application of cable taxes on satellite ... they were fighting the application of taxes that only applied to satellite. Such taxes might make sense if there were some special burden to the taxing authority due to the type of service. But some of these taxes are just money grabs to pay for something completely unrelated.


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## AntAltMike (Nov 21, 2004)

Not enough information in the cited article. What is the rationale for Tennessee exempting the first $15 of the cable TV bill from sales tax? Might it have something with the unique obligation that a wired cable company has regarding the provision of a lifeline tier?

The Massachusetts tax is called an Excise tax, which seems to differ from a sales tax in that it is specific to certain items, and may be a fixed amount per product sold, rather than proportionate to the sales price. At least, that is what I figured out from various definitions I read. Does Massachusetts also have sales tax on the television services of both providers? Might they have some state restrictions on the dissemination of cable and for TV boxes that makes them differ from satellite TV boxes? Might they be charging a fixed dollar fee on infrequent, "sold" satellite boxes, for which there is no apparent cable TV counterpart since cable TV companies don't ordinarily make their converter boxes available for sale?


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## James Long (Apr 17, 2003)

Mass Law ...
http://www.mass.gov/dor/businesses/help-and-resources/legal-library/tirs/tirs-by-years/2009-releases/tir-09-14-taxation-of-direct-broadcast.html

_Recently enacted legislation establishes a 5% excise on the gross revenues of a provider from the sale of direct broadcast satellite service to a subscriber or customer in Massachusetts. ... The excise will be passed along to those subscribers or customers as a separately stated item on their bills._

_For purposes of the Chapter 64M excise, "gross revenues" are defined as all consideration of any kind or nature received by a direct broadcast satellite service provider, or an affiliate of such person, in connection with the provision of direct broadcast satellite service to subscribers or customers, including recurring monthly charges for direct broadcast satellite service and pay-per-view, video-on-demand and other event-based charges for direct broadcast satellite service; except as provided below, no deduction shall be taken for the costs incurred in providing direct broadcast satellite service, whether or not they are recovered from the customer, either directly or indirectly, including labor or service costs, interest charges or other expenses incurred by the provider._

Here is an article from earlier this year about the Tennessee Law:
https://www.nashvillepost.com/news/2015/3/4/direct_taxation_appeals_court_reverses_satellite_provider_tax_decision

The appeals court concluded:
_"Cable providers must offer several public service items, including local broadcast stations, educational stations, emergency information, and certain signal quality. Satellite providers are almost entirely free from these obligations. While the services cable providers must offer under federal law may not be widely known to or necessarily coveted by consumers, federal law nonetheless distinguishes the services and cable providers and satellite providers. Therefore, the disparate tax treatment of satellite providers and cable providers does not constitute discrimination," the opinion sums up._

Evidently the appeals court overlooked the similar requirements imposed on satellite operators. "Carry one, carry all" requires ALL broadcasters in a market to be carried where cable only has to fill a quota that can be less than all channels in the market. "Public Interest" channels are required on satellite. Satellite is NOT exempt from public service regulations.


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## slice1900 (Feb 14, 2013)

I think by "public interest" they meant "community interest". Cable companies always carry a half dozen non-broadcast municipal channels that satellite doesn't.


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## James Long (Apr 17, 2003)

slice1900 said:


> I think by "public interest" they meant "community interest". Cable companies always carry a half dozen non-broadcast municipal channels that satellite doesn't.


Cable varies by community. Cable is not one entity that "always" does anything. Cable companies are required to provide community channels (a quota set by law, not out of the goodness of their corporation's heart). Satellite is required to carry the non-commercial PI channels. Two different ways of meeting the same FCC requirement to deliver channels in the public interest.

Saying satellite should be taxed and cable should not while both are simply fulfilling a requirement is unfair to satellite. Giving cable customers a tax break because they get a couple of public access channels instead of national PIs is unfair to satellite subscribers.


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## satcrazy (Mar 16, 2011)

Could it be that, like in the city where I live, TW cable pays the city [ directly] a yearly fee [ not a small figure, either] I cannot remember how they worded it, but it's still a fee, non the less. [ some sort of right of way thing, I think]

I believe Dish or Direct do not, because the service is self contained on private property.

Perhaps this is viewed as a loss of revenue, so they tack on a "sat" tax.

Just a thought.


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## James Long (Apr 17, 2003)

satcrazy said:


> Could it be that, like in the city where I live, TW cable pays the city [ directly] a yearly fee [ not a small figure, either] I cannot remember how they worded it, but it's still a fee, non the less. [ some sort of right of way thing, I think]
> 
> I believe Dish or Direct do not, because the service is self contained on private property.
> 
> ...


Some communities have franchise fees but they are more closely related to services provided by the community (pole space, exclusive market areas) not just an additional tax for doing business in a community.

Sales or use taxes that apply equally to anything bought or sold in a community (or at least anything of a similar type) are more fair than taxing one type of company more than others of the same type.

The satellite taxes DISH complained about were like taxing Joe's Liquor Store but not Sam's Liquor Store, even though they both sold liquor.


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