BUSINESS NEWS DIGEST: Ohio high court OKs satellite-TV tax

Ohio high court OKs satellite-TV tax

COLUMBUS

The Ohio Supreme Court has upheld a state sales tax for satellite-TV providers that cable competitors don’t have to pay, rejecting arguments from the satellite industry that the tax is unfair while maintaining a source of tens of millions of dollars in revenue for the financially struggling state.

In the 5-2 decision released Monday, the state’s highest court ruled that the 2003 tax does not violate the U.S. Constitution’s Commerce Clause because the tax is based on differences between the nature of the businesses and does not favor in-state interests at the expense of out-of-state interests.

Satellite companies had argued that subjecting them and not their cable rivals to the tax violates their rights to interstate commerce because their companies operate between states while cable companies operate within them.

But writing for the majority, Justice Terrence O’Donnell said the justices concluded that Ohio lawmakers “imposed a sales tax that makes no distinction between local and interstate commerce but rather distinguishes based on the mode of distributing television programming.”

Ally to settle claims

NEW YORK

Ally Financial Inc. said Monday it will pay $462 million to settle buyback claims on $292 billion in home loans that it sold to Fannie Mae before the industry tightened underwriting standards in the wake of the financial meltdown.

GMAC Mortgage, which is part of Ally’s Residential Capital unit, originates and services loans then sells them to government- sponsored mortgage companies Fannie Mae and Freddie Mac. As part of their repurchasing deals, Fannie and Freddie have the option to go back and challenge Ally’s underwriting standards. If successful, they could have forced Ally to buy back the loans in question.

Oil prices hold at $91 per barrel

NEW YORK

Oil prices slid to $91 per barrel in light trading Monday, the first day after the Christmas break, as traders focused on efforts in China to ease inflation.

Benchmark oil for February delivery fell 51 cents to settle at $91 per barrel on the New York Mercantile Exchange. Analysts attributed the drop to China’s decision over the weekend to raise its benchmark lending rate. Higher interest rates not only will cool off China’s economy; they’ll also cut the country’s appetite for energy. Still, prices will head higher in the new year, analysts said.

Associated Press