Satellite : Satellite TV tax bill likely is dead

Satellite : Satellite TV tax bill likely is dead By David Saleh Rauf - Express-News

When it comes to clashes at the Legislature between satellite and cable providers, chalk one up for DirecTV and Dish Network.
Texas’ two satellite providers appear to have derailed a proposal backed by the cable industry that sought to more than double the amount of taxes paid by most of the 2.7 million satellite TV subscribers across the Lone Star State.
Legislation that would impose an additional 7 percent tax on satellite TV service is stalled in a House committee whose members are fearful of supporting a measure that constituents would deem a tax increase in uncertain economic times.
Cable industry officials declined Thursday to concede defeat. But with only days left to report House bills out of committee before deadlines kick in, the proposal’s fate boils down to simple mathematics: not enough votes and not enough time for the bill’s author to wrangle more support.
“If this isn’t fixed this year, we’ll look at it two years from now,” said Christine DeLoma, a spokeswoman for the Texas Cable Association.
For cable providers the issue has been dubbed one of “tax parity.” They say under current laws, cable customers pay more in taxes and fees than their counterparts with satellite TV subscriptions.
It’s true. Cable subscribers not only pay an 8.25 percent sales tax but have to pony up for an additional 5 percent franchise fee, which cable companies pay to municipalities to compensate for digging up public streets and sidewalks to lay its cables.
On the other hand, satellite subscribers pay a 6.25 percent sales tax. The additional 7 percent tax would level the playing field and eliminate the competitive advantage satellite providers currently enjoy, DeLoma said.
But DirecTV and Dish Network say the municipal franchise fees don’t apply to their service because satellite technology does not rely on putting cables into the ground or hanging wires from utility poles. Satellite companies incorporate vastly different infrastructure costs that include launch pads and rockets to send satellites into space.
“Making our customers pay franchise fees or in this case an equal amount in taxes would be like making airline passengers pay a fee for railroad tracks,” satellite lobbyist Gregory Schwegmann told the House Ways and Means Committee last month. “They don’t use them and shouldn’t have to pay for them.”
In the end, the proposal would amount to an increase of about $5 for the paid-TV subscriber who spends a national average of $70 per month for service. Money generated from the proposed tax increase — estimated at about $200 million over two years — would go directly to the state’s general revenue fund.

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