DirecTV believes satellite companies are being unfavorably treated compared to cable companies. DirecTV may not be that far off.
Florida taxes cable companies at a rate of 6.8% for the services they provide (e.g., television). Satellite service companies are hit with tax at a rate of 10.8% for the exact same service. DirecTV believed this treatment to be fundamentally unfair, as DirecTV is taxed differently from the major cable companies. The cable companies saw no issue with the difference in treatment.
To try to get on an even playing field with the cable companies, DirecTV had to bring the Florida Department of Revenue to court over the issue. Back in April 2017, the Florida Supreme Court found that satellite television companies engage in the same business as cable television providers. Additionally, the Court found both the satellite companies and cable companies are “out-of-state” companies. Thus, there was no Commerce Clause discriminatory effect by favoring in-state companies over out-of-state companies, as there were no “in-state” companies to be favored. All of the companies at issue, according to the Court, were out-of-state companies.
DirecTV has asked the Supreme Court of the United States to review the case and reverse. DirecTV argues that cable companies, based on the vast infrastructure within Florida, are considered “in-state.” Because in-state companies cannot receive more favorable treatment than out-of-state companies, such as DirecTV, the disparate tax rates are discriminatory and violate the dormant Commerce Clause. Therefore, DirecTV believes it is entitled to a refund of the difference between the rate of tax it paid and the rate of tax the cable companies pay, as the tax imposed on DirecTV is unconstitutional.
At the Law Office of Moffa, Sutton, & Donnini, PA, our primary practice area is Florida taxes, with a very heavy emphasis in Florida sales and use tax. We have defended clients against Florida sales and use taxes for more than 25 years with over 100 years of cumulative experience working for our firm. Our partners are both CPAs/Accountants and Attorneys, so we understand both the accounting side of the situation as well as the legal side. We represent taxpayers and business owners from the entire state of Florida. Call our offices today for a FREE INITIAL CONSULTATION to confidentially discuss how we can help put this nightmare behind you.
ADDITIONAL ARTICLES TO READ
FL SALES TAX ON DROP SHIPMENTS, published March 24, 2016, by Amanda Levine, Esq.
FL SALES TAX CLASS ACTION ON PIZZA HUT DELIVERY FEE, published December 9, 2015, by Jerry Donnini, Esq.
FLORIDA USE TAX AUDIT LETTER?, published June 14, 2015, by James Sutton, CPA, Esq. and Jerry Donnini, Esq.
AMAZON STARTS CHARGING SALES TAX IN FLORIDA - MAY 1 2014, published May 2, 2014, by James Sutton, CPA, Esq.
Amazon - Overstock Sales Tax Denied by US Supreme Court, published December 2, 2013, by Jerry Donnini, Esq.
GOING TO JAIL FOR NOT PAYING FLORIDA SALES TAX?, published November 3, 2013, by James Sutton, CPA, Esq.
FL TAX – VOLUNTARY DISCLOSURE CAN BE THE PERFECT SOLUTION, published October, 5, 2012, by Jerry Donnini, Esq.