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Court: Direct TV and Dish Network should have quit while they were ahead

The Supreme Judicial Court ruled today Dish Network and Direct TV have to continue paying an excise tax on their Massachusetts accounts.

The state's highest court ruled that even though cable providers and Verizon don't have to pay the excise tax, that's not discriminatory under the US Constitution's commerce clause because the satellite companies still come out ahead, because of the way the land-based providers are taxed:

The cable companies' local obligations and the excise tax imposed on the satellite companies are different in two ways. First, the cable companies' obligations are collected piecemeal by an assortment of local authorities, whereas the satellite companies pay the entirety of the excise tax to the department. Second, the cable companies' local obligations are made up of several components determined via negotiations with each locality, including franchise fees, additional payments to support public-oriented programming, and services in kind. The excise tax, on the other hand, is set at a uniform, flat rate.

These differences in the manners in which the cable and satellite companies are treated do not amount to actionable discrimination if they do not impose a greater burden on the satellite companies. ... These differences also are not discriminatory if they are rooted in meaningful differences between the two types of company. ... [T]he excise tax is collected in its entirety by the department, whereas the cable companies owe varying obligations to each of the localities in which they operate. This instance of differential treatment, rather than burdening the satellite companies, is advantageous to them. The excise tax provides a streamlined method of collection, far less cumbersome than the cable companies' assortment of local obligations.

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