Satellite TV Firms Step Up Fight Against State Taxes
EchoStar Communications [Nasdaq: DISH] and Hughes Electronics’ [NYSE: GMH] DirecTV unit have filed a lawsuit against North Carolina for enacting a 5 percent sales tax on satellite TV service. This follows a similar suit against the state of Ohio last week (ST, June 27).
The satellite TV providers argue that these sales taxes are not imposed on local cable television services, even though satellite television companies compete with incumbent cable operators in the same market, so they are discriminatory.
The satellite TV companies have submitted a request to the North Carolina Department of Revenue to obtain refunds for their customers of approximately $30 million of sales taxes paid by them in North Carolina since Jan. 1, 2002. Under North Carolina law, this is a required first step in challenging this tax in North Carolina. If the Department of Revenue does not agree to provide the refunds within 90 days, the companies plan to file a lawsuit against the state of North Carolina.