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Florida Supreme Court hears debate on TV tax

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Should satellite-television service be taxed at a higher rate than cable? The Florida Supreme Court heard arguments from both sides Wednesday.

Satellite TV companies, including DirecTV, want the court to uphold the 1st District Court of Appeal’s 2-1 decision last year, which said that taxing the two services differently is unconstitutional.

The state’s Revenue Department and Florida’s cable TV industry want it overturned.

At issue is the state’s communications services tax (CST), which charges “direct-to-home satellite service” at a total rate of 11.44 percent. Cable TV, however, is taxed at a total of 7.44 percent. (The state reduced the CST effective last July 1.)

The lower court’s majority ruling held that different tax rates violate the U.S. Constitution’s Commerce Clause because they tend to benefit in-state cable companies over out-of-state satellite companies.

In questions, however, Justice Barbara Pariente noted that “in the end, we’re really talking about the customer that either gets screwed or helped, depending on what goes on here.”

“It all gets passed on,” she said. “Why isn’t the correct thing to equalize a tax that is (ultimately being paid) by the consumer?”

Eric S. Tresh, representing the Florida Cable Telecommunications Association, said states often justify different tax rates because the things being taxed really aren’t the same. 

1st DCA Judge Simone Marstiller, in her dissent, had said there is no discriminatory purpose in the CST because satellite and cable providers are not “similarly situated entities.”

Cable companies do rely “on local rights-of-way and employment of Florida workers as in-state economic interests,” she wrote, but both industries have hired employees and made substantial investments in Florida.

As Jonathan L. Williams, lawyer for Revenue Department, put it Wednesday: “Satellite is not the victim of discrimination in this case.”

Lawyer Eric A. Shumsky, representing the satellite TV interests, referred to a long line of U.S. Supreme Court cases that held states cannot tax businesses differently based on, for instance, where their manufacturing or transactions occur.

As Justice R. Fred Lewis pointed out, though, another long line of state cases just on satellite and cable TV providers has uniformly upheld different tax rates.

The case is Florida Department of Revenue, et al. vs. DirecTV Inc., et al., no. SC15-1249.

Before joining Florida Politics, journalist and attorney James Rosica was state government reporter for The Tampa Tribune. He attended journalism school in Washington, D.C., working at dailies and weekly papers in Philadelphia after graduation. Rosica joined the Tallahassee Democrat in 1997, later moving to the courts beat, where he reported on the 2000 presidential recount. In 2005, Rosica left journalism to attend law school in Philadelphia, afterwards working part time for a public-interest law firm. Returning to writing, he covered three legislative sessions in Tallahassee for The Associated Press, before joining the Tribune’s re-opened Tallahassee bureau in 2013. He can be reached at

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