SALT LAKE CITY -- A Utah senator is looking to make the taxes charged to satellite and cable TV customers equal.
Sen. Wayne Niederhauser, R-Sandy, is pushing a bill that looks to level the playing field between the two forms of TV distribution services. Currently, some cable users could be paying a higher tax rate than a satellite user in the same neighborhood, depending on the taxes charged by the cities on the services. Niederhauser is aiming to equalize those rates.
"We are trying to create the equality here on the state level," Niederhauser said. "This bill is actually a tax cut if you want to look at it this way."
Those subscribing to satellite are only charged a 6.25 percent excise tax, but no franchise tax. Those subscribing to cable TV pay a 3.75 percent tax to the state, and many also end up paying a franchise tax to their city government. That franchise tax could end up making cable TV customers pay a higher rate of taxes on their TV bill than satellite customers pay.
Niederhauser argued that the rate charged the two should be the same since they provide essentially the same service and that the current practice is government forcing winners and losers in the private sector since the tax rate is higher for one portion of the industry over the other.
The change in policy would cost the state $6.6 million. That money would come out of the state's general fund. Sen. Pat Jones, D-Holladay, appreciated the intention of the bill but worried that the decrease in revenue could mean fewer services provided to Utahns.
The Senate approved the bill 24-5 on the initial vote. The Senate will vote again on the bill later this week.