RALEIGH …Â Two leading providers of satellite television services are challenging the taxes North Carolina levies on direct broadcast satellite (DBS) customers.
DIRECTV and EchoStar Satellite’s DISH Network contend the taxes discriminate against them because similar taxes are levied on local cable TV services. There are about 700,000 DBS subscribers in North Carolina.
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.
If the department doesn’t agree to provide the refunds within 90 days, the companies plan to file a lawsuit against the state, charging that the statute imposing a 5 percent tax on their customers in the state is unconstitutional and otherwise unlawful.
“These taxes discriminate in favor of the DBS companies’ chief competitors, the dominant cable operators,” Michael W. Palkovic, senior vice president and chief financial officer at DIRECTV, said in a statement. “Such discrimination is unfair and unlawful. By tying the DBS companies’ hands in their efforts to compete, these taxes can only help perpetuate the high and ever-increasing cable prices that consumers are experiencing throughout the nation.”
DIRECTV and DISH Network filed a similar suit against Ohio on June 26, challenging that state’s 6 percent sales tax for satellite television service.
EchoStar Satellite: www.dishnetwork.com