Stop Satellite Tax Virginia

During the 2005 Session of the General Assembly, Virginia Legislature is attempting to asses a unified 5\% tax across all telecommunication services (House Bill 2880 and Senate Bill 1335). This indeed will provide an initial savings to some Virginians, however this will only effectively make the tax structure easier to figure out, not provide cost savings for all Virginians and put the remaining burden on the satellite subscribers who do not utilize any state infrastructure. These bills will assess an unjust 5\% tax to satellite consumers, mainly lobbied by the cable and telephone companies. Satellite TV providers pay fees to the federal government (for the utilization of their licensed spacecraft) and the satellite TV retailers pay their required Virginia taxes like all other businesses.

Virginia is classifying this as a communications sales and use tax. Virginia classifies use tax as the following definition: refers to the tax imposed upon the use, consumption, distribution, and storage as herein defined. A little grey, but use tax is assessed on the tangible property. Virginia further goes on to define tangible services as the following, personal property which may be seen, weighed, measured, felt, or touched, or is in any other manner perceptible to the senses. The term "tangible personal property" shall not include stocks, bonds, notes, insurance or other obligations or securities. The term "tangible personal property" shall include telephone calling cards upon their initial sale, which shall be exempt from all other state and local utility taxes.

With that in mind, satellite is not fully tangible. Satellite subscribers do pay sales and use tax when they purchase their equipment (the tangible part), thus fulfilling the obligation of paying a sales and use tax. Taxing the satellite stream however, is unjust because it does not utilize any local or state resources (unlike the cable and telephone lines, which is why, cable companies, pass the franchise fee they pay along to their customers.) Taxing the satellite beam is equivalent of taxing the air we breathe, because that too is intangible; when was the last time you saw the satellite stream coming from the sky?

In addition, this bill would create a brand new tax for over 700,000 Virginia families whose only alternative is to receive satellite for video services, which is unfair to them. I am all for this unification bill, and I would hope all of Virginia is. However, the satellite tax portion is unjust and should be deleted from the bill. This tax would not do anything for competition, and make the satellite subscribers bear a burden of the cost for the telephone and cable companies. The citizens listed here support removing the satellite services from the proposed communication tax reform. Thank you.