State: Rise in dish TV tax draws static

From space, DirecTV satellites beam dozens of channels of television to James Poleski's northern Hillsborough County home, giving him and his wife an array of news networks, lots of sports and movie choices and plenty of game shows.

The advanced technology works simply and well for the fixed-income Bell System retiree. What made him unhappy this month was the old technology of a tax increase, which he learned of through the old technology of mail.

The Florida tax on his DirecTV bill more than doubled -- from $2.28 to $5.

"I was surprised it jumped that high," Poleski said. "I don't remember seeing any notice that they were going to increase that tax."

Poleski was among an estimated 1-million direct broadcast satellite customers across Florida to get a sudden introduction this month to the state's new "Communications Services Tax Simplification Law." The Legislature passed it this year while few noticed. It took effect Oct. 1.

The tax on satellite television leaped from 6 percent to 13.17 percent through the act, while the tax on services such as wired and wireless telephones generally dropped slightly.

Consumers -- many of whom were trying to save a few bucks each month by choosing satellite over cable -- have peppered the Department of Revenue, their satellite companies and their state legislators with calls this month.

Marvin Gottlieb, a retired insurance executive from Spring Hill, said he called state Sen. Ginny Brown-Waite's office "trying to get an explanation for this or a justification." The senator's staff promised to send him a copy of the new law.

Department of Revenue spokesman Dave Bruns said he has been explaining the new law a lot.

"One of the intentions was to provide a more level playing field," he said, noting that he has received no calls about the other types of bills that decreased slightly under the new law.

Before, a cable customer paid between 13 and 15 percent of the cable fee in various state and local taxes, while a satellite customer next door paid just 6 percent.

The idea behind the change, Bruns said, was to tax similar services at a similar rate regardless of the technology they use for delivery. And legislators wanted to consolidate a slew of state and local taxes (previously listed separately on bills and called things like "gross receipts tax," "sales tax," "franchise fee" and "municipal public service tax").

The state collects the new communications services tax in the place of all the old ones, then gives some of the money to city and county governments to replace revenue from the old taxes.

Bruns said that statewide, the new tax is supposed to bring in the same amount of money as all the old taxes it replaced. The state will check after a year of the new tax to make sure.

"It's not going to bring any more money in to the local governments and state government," he said. But "it is not going to be revenue neutral on individual consumers with individual services."

That means that if you have cable, a wireless phone and home telephone service, you save a buck or two per month. If you have direct satellite instead of cable, you probably come out a few dollars behind.

The telecommunications companies definitely benefit from the new law. It saves them an accounting nightmare.

Before, a company like Time Warner Communications had to keep up with all the different taxes it had to collect in all the cities and counties in Florida where it does business. Periodically it had to file tax returns with each one of them and then send out dozens of checks.

Now the company can file just one return with the Department of Revenue and write one check for all the tax it collects in the state.

The "much more streamlined" law is also intended to keep taxation flexible to apply to new communication technologies that may emerge, Bruns said.

Dish Network spokesman Marc Lumpkin was sympathetic with the company's customers: "Obviously we frown upon taxes because that just means more cost for our customers."

And legislators are trying to calm their constituents. When Port Richey resident William Burke, 58, e-mailed state Sen. Jack Latvala, R-Palm Harbor, he received a polite explanation of the new law similar to the one Bruns gave.

But Burke isn't satisfied with that explanation or with his 119 percent tax increase. Cable customers ought to pay more tax because cable companies run their lines along public roads, he said, while satellite television services do not intrude on public space.

"There are going to be thousands of people calling their politicians complaining," he said. "Elections are coming up next year. I don't forget."

On the Web

Read about the new communications services tax at the Florida Department of Revenue: http://sun6.dms.state.fl.us/dor/taxes/cst.html

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Lucy Morgan

From the Times state desk