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Friday, October 19, 2007

Bob Taft's Legacy Shrinks: Ohio Judge Shoots Down Sales Tax On Satellite TV

COLUMBUS (TDB) -- Franklin County Common Pleas Judge Dan Hogan declares unconstitutional a 6% sales tax on satellite dish TV subscribers in Ohio. The tax measure was approved by lawmakers and signed by former GOP Gov. Bob Taft in 2003. It brought in about $20 million a year and was seen as penalizing some 700,000 rural Ohioans who use satellite dishes because cable is not always available outside built up areas.

The Daily Bellwether called Hogan's office for confirmation of the decision. A spokesman for the judge said the ruling is some 100 pages long. DirectTV Inc. and EchoStar Communications Corp., filed the lawsuit against the sales tax, contending it discriminated against their customers. A press release issued by the companies says:

"The sales tax, enacted by the Ohio General Assembly at the request of the cable industry, applied only to satellite TV subscribers. The judge ruled the tax was discriminatory and unconstitutional because it undermined free and fair commerce between the states. EchoStar and DirectTV have long said that taxing satellite subscribers more than cable subscribers is illogical and unconstitutional, and this discrimination is unfair because no group of consumers should be singled out for a heavier tax burden based solely on what technology they use, particularly when they are predominantly rural or price-sensitive."

Broadcasting and Cable has an article about the tax being struck down here. There is more about the controversy over the enactment of the satellite TV tax here.

At the time the tax was enacted, the cable TV industry argued it should be exempted because cable companies paid franchise fees to cities and communities where they operated. But the satellite industry argued that the cable companies merely were seeking a competitive advantage by getting a government levy imposed that would raise costs.

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