Blessing Dishes Up Plan, Wants to End Satellite Sales Tax

By Michelle Bollman
mbollm00@leeu.edu

Columbus, OH - July 3, 2008 - In an attempt to stimulate competition among television providers, state Rep. Louis Blessing introduced legislation Wednesday to lift the 5.5 percent state sales tax on satellite TV companies.

House Bill 599, the "Ohio Video Tax Fairness Act," would drop sales tax on satellite TV services for Ohio's estimated 980,000 satellite TV customers. In a 2003 budget bill, lawmakers approved the tax for both satellite and cable television companies.

DirecTV says its customers pay an average of $65 per month, so the sales tax would be about $3.60 saved each month.

Blessing, a Colerain Township Republican, said his bill recognizes the unique costs involved in running a satellite company, compared to a cable-TV company.

"Satellite doesn't use municipal property for its transmissions," Blessing said. "Satellite companies have their own costs of doing business, namely the costs of building, launching and maintaining satellites in outer space."

Keith Dailey, a spokesman for Gov. Ted Strickland, said the governor has not reviewed the legislation, but added: "Any change to it could threaten not only the tax reforms, but it could have a detrimental impact on the state's ability to support education and health care."

Sales taxes collected from satellite subscribers total about $100 million, Blessing said, and another $40 million is expected to be collected this year. A lawsuit challenging the tax could result in that money having to be returned to subscribers, causing a new state budget gap, according to Blessing.

"We simply can't afford to do nothing while watching this debt grow," he said.

In October, a Franklin County Common Pleas judge ruled the sales tax discriminatory and unconstitutional. That decision is under appeal.

The Ohio Cable Telecommunications Association, in a statement Wednesday, said it was surprised by Blessing's proposal.Executive director Jonathon McGee said the legislature and Strickland "just went through a painful process to pare the state budget to get it balanced again. This bill would irresponsibly reopen that deficit. The responsible thing to do would be to wait on the courts to rule on this issue before blowing a hole in the state budget."

DirecTV and Dish Network issued a statement saying they support Blessing's bill.