Capitol Fax.com - Your Illinois News Radar

Question of the day

Posted in:

Illinois

The satellite TV industry in Illinois has started fighting a potential tax it says could add 5 percent to customers’ bills.

A specific proposal isn’t yet being broadcast in Springfield, but it has come up before. And satellite companies said they shouldn’t be taxed just because cable companies have to pay franchise fees with communities that let them use land to run their wires. […]

Cable providers have proposed the tax before saying it would help level the playing field for TV providers. Several years ago, it was approved by the Illinois Senate but didn’t advance further.

“We’re paying 5 percent for the cost of doing business,” Joe Hadley, President of the Cable Television & Communications Association of Illinois, said.

* But the cable TV taxes are much different…

Cable TV companies pay a 5 percent franchise fee to operate in the state. However, McCabe noted that cable uses public rights-of-way for its technology.

“We don’t use the right-of-way,” she said. “It is not a loophole. It is a different technology.”

* And…

Mark Denzler, vice president and chief executive officer of the Illinois Manufacturers’ Association, said Illinois has a number of businesses that manufacture components for the satellite TV industry. He said the AMA is concerned that a tax on satellite TV could cost the industry customers and, consequently, hurt the businesses that produce the components.

Dan Clausner, executive director of the Illinois Licensed Beverage Association, said many bars and restaurants, particularly in rural areas, depend on satellite service to provide television in their establishments.

* Numbers…

In all, the industry said it serves 1.3 million households in Illinois, which represents about one third of the homes that subscribe to television.

The idea is being bandied about by some as a possible revenue source for a new capital construction program. So…

* The Question: Should satellite TV users pay a 5 percent service tax to help fund a capital bill? Take the poll and then explain your answer in comments, please.

feedback surveys

posted by Rich Miller
Tuesday, Apr 7, 15 @ 11:17 am

Comments

No. It’s satellite TV. It doesn’t require public ROW.

Let the cable industry negotiate if it doesn’t believe 5% is appropriate. Don’t let one industry dictate other industries’ profits.

As far as funding the capital bill, why should satellite customers be singled out over other groups? Will they benefit more than others?

There’s no clear connection between satellite TV and capital development.

Comment by Sir Reel Tuesday, Apr 7, 15 @ 11:24 am
I don’t like satellite tv, but what’s the argument to tax them other than 1) more state revenue and 2) cable companies screaming “we’re being taxed, so they should too” ?

This isn’t a he-said, she-said affair; the satellite companies points for why theyre not being taxed are valid. They don’t use public resources for their product unlike cable companies. It’s just a different business model.

Comment by McDouble Tuesday, Apr 7, 15 @ 11:24 am
I would suggest that the sales tax on motor fuel, which is completely diverted from roads and bridges, go to pay for, oh, roads and bridges. Use a satellite tv tax and service tax to offset the loss to the GRF when the gas sales tax is used for its proper purpose.

Comment by phocion Tuesday, Apr 7, 15 @ 11:26 am
I am a dish subscriber and I have no problem with the tax. Just because it uses different technology doesn’t mean it should not be taxed as part of our modern economy.

Comment by independent Tuesday, Apr 7, 15 @ 11:27 am
Raise the tax much more. Anything that causes people to watch less of the idiot box is a good thing!

Comment by Formerpol Tuesday, Apr 7, 15 @ 11:33 am
96 votes and 5 comments.

Methinks we’re seeing some coordinated involvement here.

lol

Comment by Rich Miller Tuesday, Apr 7, 15 @ 11:34 am
I agree that the two situations are different in that one uses the ROW and the other does not. The dish companies already pay taxes like any other business. It seems unfair to add an additional special tax on top of that.

Comment by One of the 35 Tuesday, Apr 7, 15 @ 11:35 am
If satellite TV was taxed as part of a general tax on services (which, incidentally, should also apply to cable TV on top of the franchise tax), that might be reasonable. But there’s no basis to single out, well, a single industry.

Comment by gopower Tuesday, Apr 7, 15 @ 11:36 am
Cable TV companies using the gov’t to bludgeon the satellite TV companies. Kinda like the gov’t requiring folks who braid hair to have a cosmetology license. The course is long and very expensive. Why is that? To braid hair?

Comment by dupage dan Tuesday, Apr 7, 15 @ 11:37 am
The essence of the cable tax is to compensate for the use of the public right of way. The notion of applying a similar tax to satellite providers particularly for capital purposes makes no sense. And if there’s logic to tax satellite TV to support our capital initiatives then there are a whole host of services that should be on the table. By the way I’m a cable subscriber.

Comment by pundent Tuesday, Apr 7, 15 @ 11:38 am
If you’re going to tax it, use the funds to expand broadband infrastructure downstate. It’s nearly impossible to get satisfactory internet speed outside of population centers.

Comment by Served Tuesday, Apr 7, 15 @ 11:39 am
pundent, our current capital program is partially funded by a sales tax on candy. It’s also partially funded by video gaming in bars.

Neither of those things have much to do with infrastructure, except possibly that candy can make you fat and collectively that means more wear on our roads… I suppose.

Comment by Rich Miller Tuesday, Apr 7, 15 @ 11:41 am
This is stupid. If it was coming from someone other than a competitor maybe it would add credibility to the argument. Face it, cable TV is a dying industry. Does anyone think 20 years from now we will still be plowing cable?

Comment by Bob Hicks Tuesday, Apr 7, 15 @ 11:41 am
This is like taxing Amish buggies to fund Interstate highways.
We need more revenue but we need better thinking.

Comment by Last Bull Moose Tuesday, Apr 7, 15 @ 11:42 am
Does the Satellite TV industry own the bandwidth that they broadcast over? Just wondering.

Comment by St. Louis Bob Tuesday, Apr 7, 15 @ 11:47 am
I get the arguments against the tax. They dont use the right of way. Reasonable. The position of the IMA (its a tax and therefore kills jobs!) And the bar industry ( no one will stop by for a beer without the latest and greatest satellite offerings!) are a bit silly.

Comment by The Way I See It Tuesday, Apr 7, 15 @ 11:50 am
I voted no. This is about protecting the profits of Exelon–whoops–cable companies who are losing market share to newer business models. I don’t oppose a tax on all tv service providers to fund capital projects.

Comment by Earnest Tuesday, Apr 7, 15 @ 11:53 am
I voted no because of the disconnect between the 5% paid by cable companies as a franchise tax for their ROW and easements and the complete absence of any use of public way, easements, etc… by satellite companies.

Having said that, if the state needs revenue (and boy do they), impose a five percent tax on all televisions bills, cable and satellite alike.

Comment by Concerned Tuesday, Apr 7, 15 @ 11:55 am
Voted No. Cable companies are wrong on this. As said by others, their business model and subsequent contracts with localities is their problem. Getting government to rig the market is as old as civilization. But it doesn’t make it right.

Comment by Nick Danger Tuesday, Apr 7, 15 @ 11:56 am
I don’t know exactly why I voted no, just seems to be too non related to infrastructure. It would be ironic if taxes from an airborne transmission medium were somehow used to fund their competition (i.e. wiring up rural Illinois).

Comment by Six Degrees of Separation Tuesday, Apr 7, 15 @ 11:59 am
I voted no because I hate Comcast.

Comment by Overpaid State Worker Tuesday, Apr 7, 15 @ 12:05 pm
Rich, homer #1 yesterday! I voted no since I rarely agree with cable companies.

Comment by Jose Abreu's next homer Tuesday, Apr 7, 15 @ 12:06 pm
Think of energy. We tax all of it. Cable or Satellite, the end result is a moving picture in our homes. If one pays, the other should. You want in the market? Compete on a level field. Pay the tax.

Comment by A guy Tuesday, Apr 7, 15 @ 12:07 pm
I live in a rural area. My only option for TV is satellite, especially since they made the switch so it’s very hard to get stations off the air. I will be retiring soon and more cost to the satellite bill will cause me to stop all together. I’m almost there now with the cost for the limited channels I watch.

Comment by ANON Tuesday, Apr 7, 15 @ 12:09 pm
Satellite TV uses, well, satellites. I assume they pay a fee for that service, which is directly or indirectly taxed. The closest analogy seems to be for the broadcast industry. I believe they pay the FCC a licensing fee, and their corporate profits are taxed as are any other business. Seems fair as it is. Don’t forget it won’t be “satellite TV” paying this tax, it’ll be the users. How would this be any different than taxing viewers for watching CBS, NBC, or ABC?

Comment by Rapscallion Tuesday, Apr 7, 15 @ 12:12 pm
Voted ‘no’ for the reasons given. I do have cable and not a satellite and I would benefit with an increase in capital projects. But this does not make sense. Are we going to tax those with digitals antennas as well?

Comment by Bogey Golfer Tuesday, Apr 7, 15 @ 12:18 pm
Rich - I’m not imposed to imposing a tax on the satellite industry. What I do take exception to is the cable industries cry that it needs to be done to “level the field”. If anything the candy and video gaming industry have the more compelling argument there.

Comment by pundent Tuesday, Apr 7, 15 @ 12:19 pm
Why not use the Satellite TV tax to fund capital projects. It’s just one, big pot nowadays.

Comment by Hyperbolic Chamber Tuesday, Apr 7, 15 @ 12:23 pm
Also, cable providers are required to provide free basic cable to all schools and colleges that its underground cable passes. Are satellite services going to have to provide free local service as well? If cable companies don’t like that their taxed, let them over better programming.

Comment by Union Man Tuesday, Apr 7, 15 @ 12:30 pm
I voted no. We have satellite because there is no other option where we will. Our bill includes various fees for the service one of which I presume is our share of the licensing. We paid to have the dish installed on our private property. It makes no sense for us to be taxed for no apparent reason other than to generate money.

Comment by Observation Tuesday, Apr 7, 15 @ 12:38 pm
I voted no. It reminds me of some early attempts
by some towns to tax cell phone bills by zip codes. The big problem was zip codes don’t follow city boundaries, so one town would end up taxing residents of other towns or unincorporated areas. The towns tried to justify their taxes on out of town residents by claiming radio waves from cell phones passed over their town. The practice was soon quashed.

Comment by DuPage Tuesday, Apr 7, 15 @ 12:43 pm
I voted “yes” because the argument that the 5% state franchise fee pays for right of way is not true.
The 5% fee simply provides for non-discrimnatory pricing of public rights of way. Rights of way are actually an additional separate permit fee paid by cable providers that would never apply to satellite providers. (See 220 ILCS 5/21-1001)

Comment by Qui Tam Tuesday, Apr 7, 15 @ 12:52 pm
No. The cable companies’ arguments are self serving BS. If the STATE needs more revenue, tax both satellite AND cable an additional tax.

Comment by PolPal56 Tuesday, Apr 7, 15 @ 12:57 pm
Voted “No” because, it seems odd for taxes collected on satellite to be directed toward infrastructure. It’s not the tax I’m against, if it went to rural broadband, for example, or other something even lossely related, it would make sense.

Comment by AC Tuesday, Apr 7, 15 @ 12:57 pm
1. A satellite TV company recently blocked my alley to install a satellite dish such that it was hanging over the property line and above the public alley.

2. Satellite dishes don’t get taken take down. They just get abandoned. They are a public eyesore.

3. A satellite dish is ugly! Two satellite dishes are twice as ugly. Three….. Twelve….

Comment by Bob Tuesday, Apr 7, 15 @ 1:11 pm
I voted yes I use cable for Internet and TV. Tax the other guy is my motto!

Comment by Annon3 Tuesday, Apr 7, 15 @ 1:15 pm
I voted No. I never have bought the “I’m-taxed-so-you-should-be-too” argument of any industry. Besides, Overpaid State Worker’s comment at 12:05 pm is the best reason for voting No.

Comment by Sarge Tuesday, Apr 7, 15 @ 1:24 pm
I voted no. I’m not against taxing satellite, but would rather see any additional tax dollars go toward balancing the operating budget rather than funding new capital expenditures.

But Overpaid State Worker at 12:05 has a better reason.

Comment by Robert the Bruce Tuesday, Apr 7, 15 @ 1:25 pm
Maybe they’re onto something here. Maybe we should take all electric vehicles, calculate how much gasoline tax they *would* pay if they weren’t electric, and make them pay that annually.

It will, you know, level the playing field.

Comment by QCLib Tuesday, Apr 7, 15 @ 1:26 pm
But… Really… screw Comcast.

Comment by QCLib Tuesday, Apr 7, 15 @ 1:31 pm
I voted no because I agree with Overpaid State Worker.

Comcast is just the worst.

Comment by jerry 101 Tuesday, Apr 7, 15 @ 1:35 pm
No unless the cable companies want to pay an extra 5 percent as well to help with the cost of satellites. If it was 5 percent on both then it would be fair.

Cable pays 5 percent as franchise fees because they use public rights of way.

The interesting dilemma is that they want to tax satellite but not internet based programming like Netflix, Hulu, etc. These are the fastest growing segment and are the wave of the future.

Comment by 1776 Tuesday, Apr 7, 15 @ 1:54 pm
No… Rich, Candy and Video gaming are not a good reason for it. Two wrongs argument. Really, call it what it is… a Tax to tax… The reality is, with Smart TV’s and pay per use sites like netflix…. cable and satellite they are dying on the vine. This will just help speed the process….

Comment by Walter Mitty Tuesday, Apr 7, 15 @ 1:59 pm
Voted no.

For years it was described as a fee for use of ROW. If you want to treat it as a new entertainment tax, then it is a new tax on all pay TV

Comment by Plutocrat03 Tuesday, Apr 7, 15 @ 2:24 pm
Satellite TV picture quality is superior to that of their cable bretheren. Not sure if that is because of the tax situation.

Comment by Montgomery Burns Tuesday, Apr 7, 15 @ 2:34 pm
I voted “no” but for the reason that the State should be taxing all services in a 2015 economy. This would treat all services equally.

Comment by Diogenes in DuPage Tuesday, Apr 7, 15 @ 2:42 pm
Voted “No” because of ROW agreement argument, then realized that Qui Tam @ 12:52 is right. My township has some cable lines, but does not get any income from them: Wasn’t smart enough back then to have a permit fee in place-something I should look at.

Comment by downstate commissioner Tuesday, Apr 7, 15 @ 3:00 pm
Luxury non essential service where the revenue gleaned benefits the state and consumers as a whole without hurting jobs. Slam dunk yes.

Comment by Shore Tuesday, Apr 7, 15 @ 3:11 pm
Voted no. Call it an entertainment or tv tax and it could make sense but in its posited state it comes off as cable companies just sticking it to satellite companies in order to get price parity.

Comment by SadBadgerFan Tuesday, Apr 7, 15 @ 3:18 pm
=== - Rich Miller - Tuesday, Apr 7, 15 @ 11:41 am:

pundent, our current capital program is partially funded by a sales tax on candy. It’s also partially funded by video gaming in bars ===

The legislation was proposed by the Cable TV industry - isn’t it wonderful they are so keen on helping the poor GA out in determining new revenue streams that they point out a competitor who may be missing out on the opportunity to support the capital fund.

Comment by dupage dan Tuesday, Apr 7, 15 @ 3:25 pm
Last year, Big Cable wanted the “satellite tax” to go to local governments. This year, a capital bill. They so desperately want to tax their competition that it’s becoming laughable. This tax is a tax on every farmer, and small town family that can’t get Big Cable to bring their service to their town. It looks like Big Cable wants to punish rural people for not having the good sense to live where the “rest of the folk” live.

Comment by Nick Naylor Tuesday, Apr 7, 15 @ 3:50 pm
Raising the cost to the consumer to level he playing field is counterproductive. I’m sure gas xompaning would like a tax on efficient cars so consumers would be more likely to buy gas guzzlers but to propose it would be insane.

Comment by relocated Tuesday, Apr 7, 15 @ 4:36 pm
This is terribly shallow, but I too voted No because I too hate Comcast. Sorry.

Comment by Arthur Andersen Tuesday, Apr 7, 15 @ 5:10 pm
I vote “No” for much the same reasons as others, and that is that satellite systems do not use any public rights of way. As a general principle, I hold that all special purpose taxes should be directly related to that special purpose. Otherwise, we should simply rely on the general fund and provide adequate revenue for that by either income tax or sales tax, applied to as broad a base as possible with few or no exemptions. Tax services? Heck, yes.

Comment by Skirmisher Tuesday, Apr 7, 15 @ 5:48 pm
No to the tax. Living inj a rural are satellite tv is the only game in town for decent reception, even for OTA programming. Of course I could erect a 40-50 foot tower, a rotor and a super winegard antenna and still get only OTA programs….reminiscent of the pre cable/ satellite days. Satellite tv uses none of the local government resources/infrastructure, public ROW, or need to pay franchise fees to local entities.
Sat TV provides a product to consumers just like OTA networks but I pay for that service, I would have to pay for cable too, but they are miles away. So cable providers want to off set their competitive disadvantage by having the government ” fix” it for them be suggesting tax increase on their competition.

Comment by One day at a time Tuesday, Apr 7, 15 @ 6:19 pm
If this passes, look for a special Shoe Tax. After all, when you walk on public sidewalks and streets, shouldn’t you have to pay extra for that?

I voted No. This is not a satellite tax. It’s a retaliation tax promoted by the cable companies.

Comment by Streator Curmudgeon Wednesday, Apr 8, 15 @ 9:49 am
Chuy didn’t get beat by Rahm’s $ or his groundgame. He got beat because his campaign manager didn’t bring in the right people to develop the policies, the themes, the talking points and the communication strategies that were needed to present Chuy as a viable alternative to Rahm. Case in point: Rahm has made a holy hash of the City’s finances and the finances of CPS — yet Chuy’s campaign never tagged Rahm with his gross malfeasance. Why? Because they didn’t bring on board the people who had the skills to do this (and who were knocking on the campaign doors saying over and over again, ‘We can help.’) So, no strong positions on finance; no strong positions on jobs creation; no regular and coherent themes to package Chuy’s campaign, his speeches, and his positions; no clear and concise talking points; and no regular outreach via “new media” to all those people who get weekly (sometimes daily) emails from other candidates and organizations. It’s a sad and common occurence in campaigns: the people who get you through the primary can’t always get you through the general without bringing new and more precise talent on board (especially in a city-wide race). It takes maturity and experience to say, “We need help,” and a lot of campaign managers and top-staff don’t have that maturity.

Comment by ChiTownSeven Wednesday, Apr 8, 15 @ 10:10 am