Ohio Tax Statement from Dish and DirecTV

[Scott Greczkowski]

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​

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[TNGTony]

Ever since this tax was passed I have been hounding my local representatives about the fairness of it. I did not know there was a suit in progress. Last Monday on the local cable call-in show (paid for by the franchise fees the cable cos collect for the city that funds the access center) I asked two state reps about the constitutionality (Ohio, not Federal) of taxing one entity when none of their competitors are taxed the same way. I got the standard "cable has franchise fees satellite doesn't so it evens out. " I responded, "franchise fees get me access to programming like this. What does the satellite tax get me?" After hemming sand hawing, the answer was "all the other great govenment services!"

These reps were very nice and I talked to them at length about many state issues!

See ya
Tony

 

[jim tressler]

good news.. now lets see how or if it lowers the taxes we pay.. gotta love taft

 

[Plywodstatebum]

Be happy you don't live here in Florida we pay 13% on Cable and Sat. TV Tax. I till have the bloody knives they leave in my back each month.

 

[jim tressler]

ouch.. but at least you guys dont have an income tax.. the state of ohio takes 10% or something like that on top of the feds 30+% on top of the 1.5% I pay to the local city...

 

[Digital Dude]

good news.. now lets see how or if it lowers the taxes we pay.. gotta love taft

I believe that would be Governor TAXt! In the new websters dictionary his picture appears under the word RINO.

 

[jim tressler]

lol.. lame duck taft .. man has he really tanked in the last few years