DBS Faces Taxing Battles in Two States

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DirecTV Inc. and EchoStar Communications Corp. are jointly battling tax proposals that will add levies on their customers in Maine and Nevada.

A 5% tax for consumers of direct-broadcast satellite service was added as a late-night amendment to the state budget March 20 in Maine. That tax would impact 120,000 DBS customers in that state.

The two operators have sent a letter of opposition to Gov. John Baldacci protesting the levy, according to DirecTV spokesman Bob Marsocci. Maine's legislature is expected to act on a budget by April 1.

The anti-tax fight in Nevada is a little tougher, as the bill is designed to fund a pro-social cause. The tax there will create a trust fund for police and fire agencies. Those departments will apply for grants from the fund to buy equipment that allows intra-agency communications in times of emergencies.

Because of the purpose of the tax, the Nevada State Cable Telecommunications Association supports it, executive director Bob Gastonguay said, adding that emergency workers in only two Nevada counties currently have the intra-agency technologies.

Although the bill's goal is laudable, DBS operators don't want to see their customers pay what the companies see as an unfair tax, Marsocci said. DBS has about 150,000 subscribers in the state, he added.

The Nevada bill would apply a 5% tax on all subscription-television users.