Satcasters lose tax battle in Ohio


Attorneys for DISH and DirecTV have been battling over sales taxes imposed on their clients services at the state level – taxes which have not been levied on their direct MVPD rivals in the cable business. The Ohio Supreme Court has dealt them another defeat.

Satellite MVPDs have long maintained that if they are going to be hit with special taxes, then so should cable systems. Conversely, if cable systems are allowed to bill customers with out adding in a state sales tax, satellite services should also be available without an additional levy.

According to a report from the Associated Press, the Court held that the tax, first levied way back in 2003, is legal since it is based on differences in the nature of the businesses and that they do not constitute favoritism for state-based cable companies over the nationally-oriented satellite services.

Ohio is just one of many states where the issue has been tried. The battle was believed to be headed for the US Supreme Court at some point; the satcasters’ loss in Ohio would add fuel to fire that belief. According to AP, it would likely go there regardless of the outcome in Ohio.

RBR-TVBR observation: This is yet another indication that the law cannot keep up with the pace at which technology is developing, not to mention the pace at which business is changing. This battle is about how level the playing field should be between cable and satellite, but since it started telco is already a third player and the entry of the internet and even split-stream multicasts from over-the-air broadcast can only further complicate such matters.