Ohio Tax Suit Threatened - Multichannel

Ohio Tax Suit Threatened

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EchoStar Corp. and DirecTV intensified the debate over satellite taxes in
Ohio Thursday, sending a letter to Gov. Bob Taft assuring him that the
direct-broadcast satellite companies will take immediate legal action to
overturn a DBS-only levy as soon as it is passed.

The state is considering a 5 percent sales tax on DBS services as part of its
budget reconciliation bill for this year, a strategy supported by the Ohio Cable
Telecommunications Association.

Both the cable and DBS industries have submitted white papers to bolster
their side of the tax case.

The DBS lobby asserts that it is unfair to apply a sales tax to satellite and
not cable.

In the letter from DirecTV's Michael Palkovic, senior vice president and
chief financial officer, and Echostar's Michael McDonnell, senior vice president
and chief financial officer, the companies urged the state to tax both cable and
satellite, or neither.

The companies have retained Steptoe & Johnson LLP and the Ohio firm of
Halter & Griswold LLP 'should a suit become necessary,' the letter
said.

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