Ohio Supreme Court to hear satellite TV tax appeal

COLUMBUS (AP) — The Ohio Supreme Court today agreed to hear a satellite TV company’s appeal of a state sales tax imposed on the industry in 2003.

Without comment, the high court took the case filed by DirecTV after the state taxed satellite TV and not cable, its competing industry.

The case has attracted strong national interest, with both the National Taxpayers Union and the Consumer Federation of America lining up behind the satellite companies.

A legal loss could be costly for the state, where Democratic Gov. Ted Strickland and Republican lawmakers are locked in a stalemate over how to balance the revenue-deprived state budget. The satellite tax generates an estimated $44 million a year.

The satellite companies’ basic legal argument is that subjecting them and not their cable competitors to the 5.5 percent sales tax violates their rights to interstate commerce, because their companies operate between states and cable companies operate within them.

State attorneys have said that argument ignores the fact that the U.S. Supreme Court has consistently ruled that the commerce clause doesn’t protect one interstate business from another regardless of the technology involved. Ohio further points to the fact that it imposes a franchise fee on cable providers that satellite companies don’t pay.