Plug Pulled on DirecTV Bid to Overturn Florida Telecom Tax

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By Chris Marr

Satellite TV providers including DirecTV LLC lost another challenge to state taxes when the Florida Supreme Court upheld the state’s communications services tax.

The court ruled against the satellite providers in an April 13 opinion, disagreeing with their argument that the tax illegally discriminates against the industry by charging satellite companies a higher tax rate than cable companies. The 6-0 decision overturned a lower state appeals court’s June 2015 ruling ( Fla. Dep’t of Revenue v. DirecTV LLC , Fla., No. SC15-1249, 4/13/17 ).

The justices agreed with the industry that satellite and cable companies are similarly situated companies—one requirement for a discrimination claim under the dormant commerce clause. But they rejected the satellite companies’ argument that cable companies are in-state businesses because of their physical infrastructure and that satellite providers are out-of-state businesses.

“Here, the difference between cable and satellite is not that one is located or primarily operates ‘in-state’ and the other ‘out-of-state,’” Justice Peggy Quince wrote in the opinion. “Instead, it is that their different business models have a different impact on local communities.”

The difference in business models can justify different tax rates, Quince wrote.

The Florida Department of Revenue and an attorney for the plaintiffs didn’t immediately respond to requests for comment. The court docket lists Katherine E. Giddings of Akerman LLP in Tallahassee, Fla., as representing DirecTV.

Similar Cases, Similar Outcomes

The Florida case originates in a 2005 lawsuit by the satellite providers in the Circuit Court for Leon County, Fla. After losing at that court, DirecTV and other plaintiffs appealed to the state’s First District Court of Appeal, where a panel of judges ruled 2-1 in favor of the satellite companies.

Satellite providers have consistently lost in challenging their tax treatment in a number of states on similar constitutional grounds.

State and federal courts considering the industry’s challenges have generally found states’ tax policies don’t violate the commerce clause.

“They have found either that cable and satellite are not similarly situated or that cable is not an in-state interest,” Quince wrote. “We agree with those decisions that find cable is not an in-state interest.”

The U.S. Supreme Court in November 2015 decided not to take on a pair of similar cases in which DirecTV and DISH Network LLC challenged taxes in Massachusetts and Tennessee.

To contact the reporter on this story: Chris Marr in Atlanta at

To contact the editor responsible for this story: Ryan C. Tuck at

For More Information

Text of the opinion is at

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