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Thu December 27, 2012
Lawmakers Considering Cable Tax
Cable and satellite TV's battle for customers has spilled over to the Statehouse, where legislators are considering a new tax. Lawmakers wanting to generate an extra $75 million dollars for the state are looking to satellite TV providers.
A measure that's already made it through the Senate would add a 5 percent tax on satellite services. For Joe Handley, it's a matter of parity. He's President of Illinois' cable television trade association. There's no state tax on cable, but cable companies do have to pay franchise fees to local governments.
"This is simple business equity. I always use the ... If you have McDonald's on one corner and Hardee's across the street would you give one of them a 5 percent break?"
The satellite TV industry sees it differently.
Andrew Reinsdorf, who's with DirectTV, says cities charge cable companies fees because cable has to dig throughout town to bury its service lines.
He says satellite's far less intrusive.
"Satellite on the other hand uses the federal airwaves. And comes from, in DirectTV's case, 13 satellites that are arrayed 22 thousand miles above the earth."
- Andrew Reinsdorf
The Illinois House could vote on the tax during its early January lame duck session. Or lawmakers may push off the debate until spring, as part of a comprehensive overhaul of telecommunications regulations.
Illinois Public Radio's Amanda Vinicky contributed to this report