Bill to ease inequity between satellite, cable gets new life

SALT LAKE CITY — A revived bill to fix an inequity in the taxes and fees that Utahns pay to subscribe to cable TV versus satellite service passed the state Senate 20-8 Wednesday.

The new version of SB112, which is sponsored by Sen. Wayne Niederhauser, R-Sandy, would lower the proposal's estimated reduction to state revenue in 2013 from about $6.7 million to $1.9 million.

Senators voted down the original measure 16-12 on Feb. 7.

Niederhauser said the bill's supporters wanted to fix the inequity between the two TV service providers without raising any taxes.

Satellite subscribers pay a 6.25 percent excise tax to the state — but no local franchise fee. Cable subscribers pay a 3.75 percent excise tax to the state plus a franchise fee to their local government. Some local franchise fees are as high as 6 percent; meaning cable customers' total tax would be 9.75 percent.

Federal provisions exempt satellite providers from local franchise fees.

Under the substitute bill passed by the Senate, cable providers would receive a state tax credit equal to 65 percent of the total franchise fees they pay to local governments. Cable providers currently receive a 50 percent tax credit.

Sen. Aaron Osmond, R-South Jordan, who opposed the original bill, said he now supports it.

"Because we've reduced the fiscal impact, I feel it's appropriate now to support," he said.

But other senators opposed the bill saying it should fall to local governments to level the  field for television service providers.

"We're proposing to fix a problem created by the federal government, the local government by having the state pay for it," said Sen. Daniel Thatcher, R-West Valley City, in opposing the bill.

Sen. Stephen Urquhart, R-St. George, expressed the opposite philosophy: "If there is an inequity caused by the federal government that the state can fix — bring it to me. I'd be happy to correct it."

SB112 now goes to the House for its consideration.

— Ladd Brubaker