House votes to repeal cable, satellite tax

The Utah House Thursday voted overwhelmingly to repeal the 6-month-old state sales tax on cable and satellite TV bills.

But the issue is far from decided.

HB38 will now sit on the Senate calendar until the final days of the 2004 Legislature to see if lawmakers need the $14 million in state sales tax the measure now brings in to balance out next year's budget.

The tax is about $3 on a $50 monthly cable TV bill. It is higher in resort communities like Park City that have additional local option sales tax rates.

"We passed this tax (last year) because we needed the revenue in tough budget times," said House Majority Leader Greg Curtis, R-Sandy.

In May, Utah received $100 million via Congress' tax relief plan, removing the need for the added tax dollars from the tax, Curtis said.

Then, last summer the Utah Tax Commission agreed with satellite TV operators that a federal law doesn't allow local entities, like cities and towns or transit districts, to impose a tax on satellite TV broadcasts going over their geographic areas.

The state can tax satellite TV bills and has continued to do that, as well as on cable bills. And local governments could, and have, collected the 1 percent local option sales tax on only cable TV bills because cable uses the local governments' rights of way.

But, with cable and satellite TV sharp competitors, Curtis said, now there is the question of fairness. And since the state doesn't need the tax money any more, the best thing to do is just repeal the whole thing, he said.

While voting for the bill, House budget chairman Ron Bigelow, R-West Valley, noted that all so-called "money" bills that raise or cost tax revenue are not usually finally passed until the first Friday in late February when the budget is put together and balanced.

While $14 million isn't much in an $8 billion budget, it's an election year, and the battle will be between legislators who may want to give a small tax break on a cable or satellite TV bills and those who want to fund some much-desired education or Human Service programs.

Rep. Mike Styler, R-Delta, carried the cable/satellite bill in the House last year. He was one of three House members Thursday to vote against repeal.

"We have sales tax on many different things — on cars, clothing, even on food," he said. "I believe a sales tax on cable TV is a sales tax on a luxury item. If we want to remove a sales tax, take it off of a necessity, off food, not a luxury. This tax should be left in place."

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