Satellite Tax Breaks Get House Hearing


A House subcommittee last week heard arguments about legislation that would grant local tax exemptions to direct-broadcast satellite providers.

The House Subcommittee on Commercial and Administrative Law is considering two bills sponsored by Rep. Tom Davis (R-Va.). One would exempt DBS providers from local taxation; the second measure would apply to satellite-radio providers.

Davis and other proponents of his bill who testified at a committee hearing last Wednesday argued that satellite service providers offer a national service and cannot afford to pay taxes that could be imposed in nearly 15,000 local jurisdictions across the country. They also said the levies were creating an untenable administrative burden.

"It is no way a free pass from paying taxes," said Andrew Wright of the Satellite Broadcasting and Communications Association.

Nicholas Miller, a Washington, D.C., lawyer who represented the National League of Cities, the TeleCommUnity Alliance and the U.S. Conference of Mayors at the hearing, said the groups opposed both bills because they are too vague.

He said he was worried that the legislation would "confuse tax efficiency with tax eradication that favors one form of technology over another," and would deprive local governments of a tax revenue base that they desperately need.

National Cable and Telecommunications Association spokesman Marc O. Smith said the cable industry generally opposes legislation that would grant favorable treatment to satellite providers.

It's "uncertain" if the bills will come to the House floor for a vote before Congress adjourns early next month, a committee spokesman said. "There's not a whole lot of time left" in the congressional session, the spokesman acknowledged.

Miller criticized Davis and the bill's supporters for rushing to introduce the bills at the last minute.

"As a general rule, bills that are hastily introduced in the waning days of the session while members are just trying to survive the appropriations process and get home for elections usually lead to unintended consequences, because members and their staff just did not have the time to hold hearings, vet the issues, and think the language through," Miller said.

Rep. Bob Barr (R-Ga.), chairman of the Judiciary Committee panel that held Wednesday's hearing, said the goal of the hearing was to "seek to achieve parity with respect to state and local taxation for a developing communications technology."

States News Service