New York's highest court takes up sales tax dispute involving Dish Network

Posted at: 11/14/2012 4:36 PM
Updated at: 11/14/2012 6:07 PM
By: Bill Lambdin

ALBANY - Less than four weeks after making headlines by its split decision ruling that lap dances weren't art and therefore subject to sales tax, once again the state's highest court is looking at an entertainment issue.

This involves Dish Network which makes deals with TV stations and program providers to distribute TV shows throughout the state and country to individual satellite dishes, charging customers by the month.

"You need hardware to receive it," attorney Paul Frankel explained to Court of Appeals judges.

Dish Network leased the required satellite receiving equipment for a monthly 5 dollar fee and charged customers sales tax.

After four years state tax auditors came in and decided the equipment was a necessary requirement for getting the programming. That meant Dish's parent company, Echostar, should have paid the sales tax when it acquired the equipment.

It did not, instead collecting payments from customers.

"Even if they had any doubt about the applicability of the regulation, they certainly could have requested an advisory opinion and they didn't," argued Assistant Solicitor General Kathleen Arnold for the state.

Judge Robert Smith said "it seems to me these cases are all, a lot of them, very debatable. It's hard to reconcile them. In this case, (it was) resolved... in a way adverse to the taxpayer and favorable to the state. Why are you complaining?"

"Well, because the issue is to do it right," Arnold replied. 

The Court of Appeals is expected to issue a ruling on the sales tax dispute in about six weeks.