Update: NY State legislature proposing to tax satellite TV

Posted at: 04/10/2013 11:07 AM
Updated at: 04/10/2013 6:22 PM
By: Berkeley Brean

If you get your TV through satellite or you're thinking about it, we want to let you know about a tax that some people in the state want to levy on you. It's a 5% tax on satellite television service. Right now there is no tax on satellite TV.

So we wanted to find out why some members of the state government want to do this.

The bill in the state legislature today talks about "leveling the playing field." While there is no tax for satellite TV service there is a tax for TV that comes through cable.

The rationale in the proposed bill says more and more people are switching to satellite based TV, the big ones being Dish Network and DirectTV. Every satellitte TV customer we talked to said they made the move to save money. But the fewer people on cable, the less money going to the state.

Again -- the bill says levying a tax on satellite TV would "level the playing field" and "generate 50 to 100 million dollars in revenue for the state."

Why does the state want to do this?

Obviously, the money doesn't hurt. But the bill talks about leveling the playing field between cable providers and satellite providers. (When Congress passed a law in 1996, Congress exempted satellite providers from a tax but allowed states to tax them in the future.)

Here's what the bill says: "Indeed, local taxing jurisdictions have seen reductions in revenue streams from levies such as franchise fees and local sales taxes imposed on cable providers as consumers migrated from cable service to DBS (direct satellite service) service. Therefore, it is important to level the playing field and ensure that the State does not artificially pick winners and losers in this competition; that public policy goal can be met through tax parity in the MVPD (multichannel video programming distributor) act."

But this argument doesn't fly with a lot of people facing that tax hike.

"Well it sounds like the government sticking their hands in where maybe they shouldn't again," DirectTV customer Dave Barnes said. "It doesn't make any sense to me. They're taxing me for something that they have no basis to tax on."
"They say it would level the playing field, that's what they say," I said.
"Well what happened to free market?" Barnes asked.

Why is there a "special franchise tax" on your cable bill?

The state taxes your cable provider, and therefore you, because your cable provider (ie: Time Warner Cable) to use the public's right-of-way for its equipment.

Some perspective

Here's some perspective for you. The bills in the legislature are sitting in committees right now and haven't been touched for a month and a half. That's a sign they're not going very far. The governor is on the record as opposing it.

The bill number in the Assembly is A-5118.

Click here for a link to the site that allows you to track State Assembly bills. Just type in A-5118 in the search box.