Tonawanda News

Columns

March 26, 2013

CONFER: Stop the satellite TV tax

Tonawanda News — Last month, our satellite television provider announced a significant price increase that approached 10 percent. The wife and I weighed our options and dropped our subscription package down a notch to the least expensive one available. Versus the plan we were in, the new one will save us $30 a month. That’s $30 that we can spend on our toddling daughter’s ever-growing appetite and wardrobe.

Or so we thought.

Our $30 might be shrinking.

Within two weeks of our decision, we got word that Albany, courtesy of Sen. Kevin Parker (D-Brooklyn), was pondering the addition of an excise tax on direct broadcast satellite services. This would not be limited to television; it would also include Internet and games — in essence, all products provided to customers from the likes of Dish Network and Direct TV.

This new tax isn’t trivial. At 5 percent, it adds up in a hurry. The average monthly pay-TV bill is $86, a number that the NPD Group (a market research firm) figures will reach $200 per household by 2020. So if the tax were to go into effect today, you’d be paying an extra $52 per year to state coffers. Seven years down the road, you’d be paying Albany $120 annually just to watch TV.

The reason behind this proposed fee can cause one to believe that Senator Parker must have some friends in the cable industry. He states this surcharge is needed to level the playing field by forcing satellite companies (in reality, their customers) to pay a government-specific fee commensurate with that levied against cable companies. Since the dawn of pay-TV, cable bills have been saddled with a tax approaching 5 percent. In the case of cable, this actually makes sense. The tax in question is a franchise fee through which the cable companies compensate the host communities for use of public land, rights-of-way and public infrastructure.

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