Ohio Consumers Favor Repeal of Satellite Tax

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A majority of 500 Ohio residents polled support the repeal of a five-year-old tax on satellite-delivered television services and believe the excise tax is unfair because it is not paid by cable customers, according to a survey conducted by a Columbus-based research firm and publicized by the Satellite Broadcasting and Communications Association.

The trade association commissioned the survey as a bill is pending in the state to amend a sales tax bill to eliminate the DBS levy. The repeal, sponsored by Rep. Louis Blessing Jr. (R-Cincinnati) would edit out the line taxing DBS services in a bill that applied taxes to a wide range of services, such as landscaping, hotel occupancy and product repair services. 

The repeal was introduced in July but debate in Ohio House committees heated up in mid-November.

When Blessing introduced the bill last July, he said legislators had been “sold a bill of goods” when it was persuaded to tax satellite subscribers. Cable operators argued, as the tax was being considered, that it was unfair that terrestrial providers pay franchise fees of 5% on their gross revenues while DBS suppliers did not pay any taxes.

But Blessing said that franchise fees are "an inherent cost of doing business for cable," adding that government has "no business imposing additional costs" that favor one competitor over another.

The law is also subject to a lawsuit, filed by providers DirecTV Inc. and Dish Network. In that challenge, Judge Daniel Hogan ruled in November 2007 that the state excise tax is unconstitutional. However, the state's Department of Taxation appealed the ruling and asked the court to allow the tax to be collected as the challenge is litigated.

The survey, in support of the repeal, was conducted by the Columbus-based research firm, The Strategy Team Inc. It polled 400 Ohio cable and DBS subscribers, plus another 100 homes that were known to subscribe to DBS, asking their opinion of the 5.5% sales tax on DBS bills.

Eighty-six percent of those polled said they would tell elected representatives to repeal the sales tax; two-thirds of the satellite users in the poll said a repeal is a fair remedy and would save them money.

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