Cable Tax Fried in Kentucky

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A judge has ruled it unconstitutional for Kentucky to tax cable- and satellite-television companies differently, AP reported.

Franklin County Circuit Judge William L. Graham said he saw "no difference for taxation purposes" between the two services, but the state has taxed cable operators at a higher rate.

State budget director Brad Cowgill told AP Tuesday that the ruling would have "significant budget implications" if it was not overturned.

According to AP, a section of the 1891 Kentucky Constitution required all property of the same class to be taxed uniformly but allowed the General Assembly to define the classes. The legislature added cable TV to a list of public-service corporations subject to property tax, which, the statute said, also covers "every other like company or business performing public service."

In a lawsuit against the Revenue Cabinet, Insight Communications Co. Inc.’s Insight Kentucky Partners said direct-broadcast satellite companies are "like" companies because they offer essentially the same product and compete for the same customers.

But the cabinet pointed out that cable TV is delivered over land lines that cross public rights of way and easements, while satellite TV is beamed directly to households.