Ohio Poll Respondents Back Repealing Satellite Sales Tax

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A recent poll of 500 Ohio residents found that a majority of respondents support the repeal of that state's five-year-old tax on satellite-delivered TV services and feel it is unfair because the tax is not paid by cable customers, according to results published by the Satellite Broadcasting and Communications Association.

The trade association commissioned the survey in support of a bill pending in the state to amend a sales tax bill to eliminate the direct-broadcast satellite 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.

“It's not surprising that consumers say they don't want to pay taxes,” said Jonathan McGee, executive director of the Ohio Cable Telecommunications Association. Cable operators supported the application of the tax.

McGee said while satellite TV providers criticize the tax, that industry fails to mention the advantages it has over cable. Cable pays higher regulatory fees to the Federal Communications Commission and, in Ohio, has to provide channel space and support for public, educational and government channels, he added.

The satellite industry, which has litigated each time a state applies taxes on users of the technology, argues its services come from the sky and that there is no local entity to tax.

The repeal was filed in July but a hearing was not recorded until mid-November, after the presidential election cycle ended.

Cable operators argued it was unfair that terrestrial providers pay franchise fees of 5% on their gross revenue while satellite-TV suppliers did not pay any local taxes.

Blessing responded that franchise fees are “an inherent cost of doing business for cable” and that government has “no business imposing additional costs” favoring one competitor over another.

DirecTV and Dish Network have sued to overturn the law and Judge Daniel Hogan ruled in November 2007 that the state excise tax was unconstitutional. Ohio's Department of Taxation appealed the ruling and asked the court to allow the tax to be collected as the challenge was litigated.

The survey, in support of the repeal, was conducted by the Columbus, Ohio-based research firm, The Strategy Team Inc. It polled 400 Ohio cable and satellite-TV subscribers, plus another 100 homes that were known to subscribe to satellite TV. They were asked their opinion of the 5.5% sales tax on monthly DBS bills. Eight-six percent of those surveyed said they'd ask their local legislators to support the repeal, according to the SBCA.

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