Wednesday, Oct. 26, 2005
We’d like to bring to your attention news about a favorable ruling for satellite TV customers in a lawsuit brought by DIRECTV, Inc., and EchoStar Satellite LLC against the State of Ohio.
On Friday, Oct. 21, an Ohio judge granted partial summary judgment in favor of DIRECTV and EchoStar’s DISH Network in their suit challenging the constitutionality of an Ohio sales tax law that is imposed on satellite television service but not on cable TV service. Judge Daniel T. Hogan of the Court of Common Pleas in Columbus ruled that the five percent sales tax imposed on television programming distributed from out-of-state satellites, but not imposed on similar programming distributed by local cable companies, effectively discriminates against the satellite TV companies.
Additionally, cable companies originally had lobbied that a tax on satellite would compensate town governments for loss of franchise fees paid by cable companies. However, the judge ruled that the discriminatory sales tax on satellite television services could not be justified as “compensating” for the franchise fees that cable companies pay town governments to use public rights-of-way.
The judge did rule in favor of the state on several alternative theories presented by the satellite TV companies.
While certain issues in the Ohio case remain open and the judgment is not final, DIRECTV and EchoStar are very pleased with the result, which represents an important step forward in DIRECTV and EchoStar’s multi-state challenge to unfair taxes on satellite TV programming.
The law was initiated in 2003 by the Ohio governor and a tax reform commission that had recommended taxing satellite and cable services equally. However, after significant lobbying efforts by the cable industry, the law that was passed imposed the tax only on satellite television providers. DIRECTV and EchoStar brought suit in 2003 challenging the constitutionality of the discriminatory tax. DIRECTV and EchoStar have brought similar constitutional challenges to discriminatory taxes in Florida, Kentucky, North Carolina and Tennessee.
For more information, contact Bob Marsocci at DIRECTV at 310-726-4656 or Marc Lumpkin at EchoStar at 303-723-2010
