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Florida Supreme Court Upholds Taxing Satellite TV at Nearly Twice the Rate of Cable

| April 14, 2017

satellite tv cvable taxes

Discrimination channel. (Mark Turnauckas)

The Florida Supreme Court on Thursday upheld a law that set different tax rates for cable and satellite television services — overturning a lower-court ruling that could have had major financial ramifications for the state.

The 16-page unanimous decision rejected arguments by satellite companies DirecTV and Dish Network that the differing tax rates are discriminatory and violate the Commerce Clause of the U.S. Constitution. That reversed a 2015 ruling by the 1st District Court of Appeal that raised the prospect of the state having to pay refunds to the satellite companies.

A key part of the case focused on arguments by the satellite companies that the different tax rates benefited cable companies that are “in-state interests” at the expense of “out-of-state” satellite operators. The satellite industry contended that violated what is known as the “dormant” Commerce Clause of the Constitution.

But the Supreme Court decision, written by Justice Peggy Quince, rejected such a distinction between the two types of television providers. Quince pointed, in part, to the fact that Florida’s largest cable providers are headquartered out of state, as are the satellite companies.

“The cable and satellite companies have employees and property both inside and outside of Florida to facilitate their operations and earn income,” Quince wrote. “They both employ Florida residents to sell, maintain, or repair their service to Florida customers. They also own and lease a significant amount of property in Florida.”

The opinion added, “Cable is not a local, in-state interest any more than satellite. While it may be true that cable employs more Florida residents and uses more local infrastructure to provide its services, the Supreme Court has never found a company to be an in-state interest because it had a greater presence in a state.”

Chief Justice Jorge Labarga and justices Barbara Pariente, R. Fred Lewis, Peggy Quince and Charles Canady joined the opinion. Justice Ricky Polston concurred with the opinion but did not fully sign onto it. Justice Alan Lawson, who joined the court at the end of December, did not take part in the case.

The ruling was in favor of the Florida Department of Revenue and the Florida Cable Telecommunications Association. (Disclosure: The News Service of Florida and the Florida Cable Telecommunications Association have a partnership for the Capital Dateline Online news show.)

The case deals with the state’s communications services tax, which was enacted in 2001. Under state law, cable services are taxed at 4.92 percent, while satellite services are taxed at 9.07 percent, according to the Supreme Court ruling.

In a brief filed at the Supreme Court, the satellite companies described the difference in tax rates as “a 21st Century version of classic economic protectionism.”‘

But Thursday’s majority opinion said justices did not find that the law was “enacted with a discriminatory purpose.”

–Jim Saunders, News Service of Florida

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8 Responses for “Florida Supreme Court Upholds Taxing Satellite TV at Nearly Twice the Rate of Cable”

  1. Howard Duley says:

    sounds like satellite TV just got burned. the satellites are out in space what right does the state have to tax them ?

  2. Wishful Thinking says:

    Florida has one of the highest satellite tax rates in the entire country. I am surprised at the Supreme Court’s cockeyed reasoning and blatant discrimination.

  3. Mark101 says:

    What the court should be doing is telling these cable and satellite TV companies to provide better service or face huge fines along with customer rebates for poor service.

  4. TV..what says:

    I use Netflix, and I get my up-to-date news online (thanks FlaglerLive, et al) I’m totally digital, (which I guess is considered a cable customer in PC). As far as cable TV: naaa, sorry, no thanks – total waste of money no matter which way you try to buy and you’ll never catch me watching it. Besides, MTV doesn’t even play music. I gave up in the mi-80’s when MTV stopped playing music and never went back.. What a sad day that was folks, and end of an era I tell you, and the beginning of TV capitalism – and here we are – we’ve come so far (joke)!!!

  5. can'tfoolme says:

    So the court decided the tax was not discriminatory and that neither was an out-of-state interest. So what justifies the difference in the tax rate?

  6. woodchuck says:

    Sounds like judges are in the cable company’s pockets.

  7. Smarterthanmost says:

    Typical, screw the consumer ruling. Common sense doesn’t exist anymore.

  8. Pogo says:

    !8 years of the Republican party stealing, destroying, and subverting the government of Florida. Trump is doing the same at warp speed to the entire country. If you think this idiotic decision by the SCOF is bad, guess what, Trump’s FCC and Supreme Court will make this seem puny.

    Ajit Pai. Look him up. If you like being screwed – keep voting for Republicans.

    Wake up

    Get busy

    Save your own life – save everyone’s life

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