Satellite sales tax in Ohio upheld by Supreme Court

[Hall]

WASHINGTON — The U.S. Supreme Court has brought an end to objections by satellite TV companies that a 2003 Ohio sales tax was unfair because it was imposed on them and not cable TV operators.

The justices, without any comment, upheld a 2010 decision by the Ohio Supreme Court that the sales tax did not violate the commerce clause of the U.S. Constitution.

By doing so, the justices rejected an appeal by DirecTV Inc. and Echostar Satellite Corp. who have long contended that the sales tax discriminated against the companies and their customers.

They argued that the sales tax was unconstitutional because satellite companies tend to operate between states. By contrast, cable companies usually operate inside one state. But cable companies pointed out they pay a franchise fee to local governments while satellite companies do not.

Jonathon McGee, executive director of the Ohio Cable Telecommunications Association, said in a statement that his organization was “pleased’’ that the high court “upheld the decision of the Ohio Supreme Court, and numerous other state courts in this matter. The tax generates about $54 million a year to the state.

I have to question why the "Ohio Cable Telecommunications Association" is "pleased" by this ruling. How does it really benefit them or are they pleased because D* and E* are (and will continue to be) penalized ?

http://www.daytondailynews.com/news/news/local/ohios-satellite-tv-sales-tax-upheld/nPhX3/

 

[jayn_j]

I guess it is more along the lines that the cable company is paying a franchise tax, so until now the sat companies had that advantage. I also guess that if the decision had been overturned we would have seen a sales tax replacing franchise fees for cable, so they could then charge the sales tax for satellite. Wait for true IPTV to see the sparks really fly.

 

[Hall]

I think franchise fees are justified and I don't say that as an "anti-cable" thing either. They're using the public right-of-way. On the other hand, they don't use up "more" than what is already being used on the same poles as electricity and telephone, so is that double-dipping on the part of the municipality ? I'm certain the phone and cable companies pay the electrical utility to use their poles.

As you say though - and I read it the same way - the cable group is happy because satellite doesn't have an advantage anymore. That's the ONLY reason they're "pleased".