Oliveira's satellite tax gets no reception

A bill to increase taxes on the sale of direct broadcast satellite service in incorporated areas appears to have stalled, pending further review in the Ways & Means House Committee.

The bill calls for increasing taxes on satellite from 6.25 percent to 13.25 percent. The measure is intended to create parity between satellite companies and their cable competitors and to generate an estimated $200 million in state revenue every two years, according to Rep. Rene Oliveira, D-Brownsville, who filed the bill in March.

After hearing testimony from those for and against the bill the committee appears divided.

"There were some issues raised that we need to think about," Oliveira said. "We're still looking at it, but it's just one of many bills we're looking at."

Oliveira filed a series of last minute bills earlier this month intended to generate a cumulative $1 billion in state revenue amid rising unemployment and a projected budget deficit of more than $9 billion in the 2010-2011 biennium.

Other bills filed shortly before the March 12 filing deadline with the purpose of generating tax revenue included new taxes on cigars, on smokeless tobacco and ad valorem tax on cigarettes.

Oliveira has cited Governor Rick Perry's rejection of $550 million in federal unemployment fund stimulus money as key in his decision to file the satellite legislation.

"House Bill 3893 will level the playing field for all video service providers when it comes to paying taxes," said Christine DeLoma, director of communications for the Texas Cable Association. "If video providers in Texas are to compete fairly, they should be treated equally when it comes to taxes and fees. Not only would eliminating the tax disparity be fair, it also will provide consumers a tax-neutral choice when selecting a video provider."

Oliveira has stated he isn't committed to passing the tax generating bills this legislative session, but if the need for revenue should arise the vehicle to get the money will be in place.

"The cable industry is losing to satellite TV in the marketplace so instead of competing based on what customers want, such as better service, better programming, and lower prices, they are taking the easy way out," said Andrew Reinsdorf, vice president, government relations for DirecTV. "Big cable has unleashed its army of lobbyists in Austin to double the sales tax on 2.6 million Texas families who have fled cable."