Local News

Sales Tax Increase Could Mean Higher Rates For Cable Customers

Posted July 5, 2005

— Cable television customers could see a higher increase in their bills if the cable industry does not get a tax credit it wants from state lawmakers.

Cable companies are concerned about a proposal to raise the state sales tax on cable and satellite TV to 7 percent. They already pay a 5 percent tax to local governments to use existing infrastructure to offer cable services.

A cable television advertisement that has been airing across the state warns customers that their bill could soon increase.

"The legislature is considering an increase in your cable taxes up to 12 percent," the ad says. "Cable customers would be the only people in the state required to pay a 12 percent tax to watch television."

"Cable companies are looking out for their subscribers," said Wade Hargrove of the N.C. Cable Telecommunications Association. "They do not want them to pay a larger tax or bear a disproportionate share of the tax burden."

They say to make it fair, they want state lawmakers to give them a 5 percent tax credit, but satellite TV companies say that would not be fair.

"That's the cost of doing business," said Satellite TV spokesman David Miner. "So, don't confuse apples with oranges. That's not a state sales tax."

Satellite companies pay no local taxes, but do pay a 5 percent state tax and also pay the federal government to use satellites in space, but do not get a tax credit. They say the cable industry's ad is misleading.

"The state sales tax is 7 percent. No matter if you use cable or satellite TV, you ought to pay the same amount," Miner said. "That's fairness to each group of consumers."


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