Dish Network takes issue of higher satellite taxes to U.S. Supreme Court

gavel

Dish Network is taking the issue of satellite TV operators getting charged higher state taxes than cable companies to the U.S. Supreme Court.

In Florida, cable operators are charged a state communication services tax at a rate of 4.92% of subscription revenue. Satellite providers are assessed at a rate of 9.07%.

In April, the Florida Supreme Court in a 6-0 ruling sided with Florida’s Department of Revenue and the Florida Cable Telecommunications Association, rejecting a Dish appeal that sought tax-rate parity with cable operators. 

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RELATED: DirecTV loses bid to overturn Florida state telecom tax

Writing for the unanimous majority, Justice Peggy Quince rejected Dish’s claim that satellite TV represent “in state” interests, noting that both cable and satellite operators in Florida are mostly headquartered elsewhere. 

The Florida Supreme Court, however, noted that cable operators are charged the burden of local communications services taxes, which can account for 5% of subscription revenue and are not assessed on satellite carriers.

“Cable is not a local, in-state interest any more than satellite,” Quince added. “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.”

But in a 39-page petition to the U.S. Supreme Court, obtained by the Gainesville Sun, Dish argued that the differing communications tax rates are a form of protectionism. The company argues that it violates the “dormant” Commerce Clause of the Constitution, which bars states from discriminating against interstate commerce. 

“In particular, it forbids a state from taxing or regulating differently on the basis of where a good is produced or a service is performed,” Dish said. “That’s exactly what the unequal Florida tax does. It puts a heavier duty on pay TV programming that is assembled and delivered without using massive infrastructure within the state.”

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