Saturday, May 24, 2003
Ohio consumers are among those being asked to stop a new tax.
LOS ANGELES (AP) -- Satellite television companies are rallying to stop a move to add an 8-percent tax on their services -- even before the proposal makes its way to the state Legislature.
A commission looking into tax policy is considering a handful of recommendations, including the tax on satellite television, as a means to raise revenue for the cash-strapped state. A proposal to add a 5-percent tax on satellite customers failed in the Legislature last year.
The two major satellite TV companies, DirecTV, based in El Segundo, Calif., and Colorado-based Dish Network, have organized to rally customers against the idea.
The companies have launched a joint Web site urging customers to oppose similar tax proposals in Ohio, Connecticut and Nevada. At least 23 states have enacted similar satellite taxes, including Florida and Texas.
Backing a tax
The cable television industry supports taxing satellite providers, which have grown in recent years and offer significant competition. Cable companies argue that while they pay franchise fees, utility fees, property and other state and local taxes, satellite operators do not.
"We pay over $300 million in taxes each year and they pay nothing," said Dennis Mangers of the California Cable and Telecommunications Association, a cable TV trade group.
Satellite operators counter that cable companies pay special fees because they lay their cables along public rights of way and enjoy monopoly rights in their markets. Satellite TV, they say, uses only the satellites the companies launch and faces competition in every market.
"They're trying to utilize government to make us more expensive so we won't be quite as competitive," said Andy Wright, president of the Satellite Broadcasting and Communications Association, the satellite TV trade group.