Enacts the Multichannel Video Programming Distributor Competition Act.
TITLE OF BILL: An act to amend the tax law, in relation to enacting the multichannel video programming distributor competition act
PURPOSE: This bill promotes competition in the multichannel video programming distributor (MVPD) industry and levels the video playing field through parity.
SUMMARY OF PROVISIONS: Section one of the bill creates a new section 186-G of the tax law, entitled excise tax on direct broadcast satellite (DBS) services.
§ 1. subdivision 1 defines terms, including the commissioner of taxation and finance, direct broadcast satellite service and provider, and revenues included in gross receipts. "Person", "subscriber or customer", and "video programming" are also defined.
Subsection 2 imposes a 5% excise on the gross receipts defined in § 1, subdivision 1.
Subsection 3 allows DBS providers to recover the 5% excise on gross receipts.
Subsection 4 requires DBS providers subject to the excise, to register with the Commissioner.
Subsection 5 requires DBS providers to file annual returns with the Commissioner.
Subsection 6 defines the applicability of Article 9 of the tax law and the intersection of section 186G with other provisions of Article 9.
Subsection 7 makes DBS providers liable in case of failure to pay amounts required by the excise.
§ 2. carries an immediate effective date, and applicability for tax years beginning on and after January 1st immediately following the year of enactment.
JUSTIFICATION: The MVPD industry is robust and highly competitive, with the vast majority of NYS consumers having a choice of providers for video entertainment services. This was not the case in 1996, when Congress granted the then-fledgling DBS industry special protection and preempted all local taxes and fees (and certain zoning requirements) on DBS service. Congress did not intend to confer a tax advantage to DBS providers, but rather to save DBS. providers the administrative burden from filing tax returns in thousands of local jurisdictions. Accordingly, Congress specifically preserved the authority of States to levy taxes and fees on DBS service and/or providers to ensure parity with their competitors. Through Section 602 of the Telecommunications Act of 1996, Congress granted incentives to a young industry to help spur its growth and enhance MVPD competition to benefit consumers.
This congressional tax policy experiment still exists today, but has placed significant pressures on local government's tax and fee revenues. DBS companies have grown in just more than a decade to be the second and third largest providers of MVPD services in the nation. Moreover, while the MVPD market has evolved since 1996, NYS' tax regime has not kept pace. Indeed, local taxing jurisdictions have seen reductions in revenue streams from levies such as franchise fees and local sales taxes imposed on cable providers as consumers migrated from cable service to DBS service. Therefore, it is important to level the playing field and ensure that the State does not artificially pick winners and losers in this competition; that public policy goal can be met through tax parity in the MVPD industry.
NYS cable companies pay up to 5% of their video revenues to local governments under franchise agreements with municipalities, and also provide capital support to Public, Education and Government (PEG) channels and other items. DBS providers do not pay similarly, and applying a 5% excise levels the playing field between these two MVPD industry members by making sure there is payment parity in the NYS MVPD industry.
12 states have rightly sought to close this payment parity gap with MVPD tax parity laws, including Ohio, Kentucky, Connecticut, Delaware, Florida, Massachusetts (whose video tax parity regime forms the basis of this act), North Carolina, Rhode Island, Tennessee, Utah, Virginia, and Washington. All these laws, when challenged, have been 'upheld when the collection and control of these funds is maintained by the state, as in this bill. No federal or state court has found video tax parity provisions to violate either the Constitution of the United States or of the respective State constitutions.
LEGISLATIVE HISTORY: This is a new bill.
FISCAL IMPLICATIONS: None to the State. The excise is anticipated to generate S50 to 5100 million in revenue for NYS.
EFFECTIVE DATE: Immediately, and to be applied to tax years beginning on and after January 1st immediately following enactment.
STATE OF NEW YORK ________________________________________________________________________ 3827 2013-2014 Regular Sessions IN SENATE February 21, 2013 ___________Introduced by Sen. PARKER -- read twice and ordered printed, and when printed to be committed to the Committee on Investigations and Govern- ment Operations AN ACT to amend the tax law, in relation to enacting the multichannel video programming distributor competition act THE PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM- BLY, DO ENACT AS FOLLOWS: Section 1. The tax law is amended by adding a new section 186-g to read as follows: S 186-G. EXCISE TAX ON DIRECT BROADCAST SATELLITE SERVICES. 1. DEFI- NITIONS. AS USED IN THIS SECTION, WHERE NOT OTHERWISE SPECIFICALLY DEFINED AND UNLESS A DIFFERENT MEANING IS CLEARLY REQUIRED: (A) "COMMISSIONER", MEANS THE COMMISSIONER OF TAXATION AND FINANCE. (B) "DIRECT BROADCAST SATELLITE SERVICE", MEANS THE DISTRIBUTION OR BROADCASTING BY SATELLITE OF VIDEO PROGRAMMING OR SERVICES DIRECTLY TO RECEIVING EQUIPMENT LOCATED AT AN END USER SUBSCRIBER'S OR AN END USER CUSTOMER'S PREMISES, INCLUDING, BUT NOT LIMITED TO, THE PROVISION OF PREMIUM CHANNELS, THE PROVISION OF MUSIC OR OTHER AUDIO SERVICES OR CHANNELS, AND ANY OTHER SERVICE RECEIVED IN CONNECTION WITH THE PROVISION OF DIRECT BROADCAST SATELLITE SERVICE. (C) "DIRECT BROADCAST SATELLITE SERVICE PROVIDER", MEANS A PERSON WHO TRANSMITS, BROADCASTS OR OTHERWISE PROVIDES DIRECT BROADCAST SATELLITE SERVICE TO SUBSCRIBERS OR CUSTOMERS IN THE STATE. (D) "GROSS RECEIPTS", MEANS ALL CONSIDERATION OF ANY KIND OR NATURE RECEIVED BY A DIRECT BROADCAST SATELLITE SERVICE PROVIDER, OR AN AFFIL- IATE OF SUCH PERSON, IN CONNECTION WITH THE PROVISION OF DIRECT BROAD- CAST SATELLITE SERVICE TO SUBSCRIBERS OR CUSTOMERS, INCLUDING RECURRING MONTHLY CHARGES FOR DIRECT BROADCAST SATELLITE SERVICE AND PAY-PER-VIEW, VIDEO-ON-DEMAND AND OTHER EVENT-BASED CHARGES FOR DIRECT BROADCAST SATELLITE SERVICE; PROVIDED, HOWEVER, THAT GROSS RECEIPTS SHALL NOT INCLUDE: (1) CHARGES FOR THE RENTAL OF EQUIPMENT RELATED TO THE PROVISION OF DIRECT BROADCAST SATELLITE SERVICE;EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets [ ] is old law to be omitted. LBD08588-01-3 S. 3827 2
(2) ACTIVATION, INSTALLATION, REPAIR AND MAINTENANCE CHARGES OR SIMI- LAR SERVICE CHARGES RELATED TO THE PROVISION OF DIRECT BROADCAST SATEL- LITE SERVICE; (3) SERVICE ORDER CHARGES, SERVICE TERMINATION CHARGES OR ANY OTHER ADMINISTRATIVE CHARGES RELATED TO THE PROVISION OF DIRECT BROADCAST SATELLITE SERVICE; (4) REVENUE NOT ACTUALLY RECEIVED, REGARDLESS OF WHETHER IT IS BILLED, INCLUDING, BUT NOT LIMITED TO, BAD DEBTS; (5) REVENUE RECEIVED BY AN AFFILIATE OR OTHER PERSON IN EXCHANGE FOR SUPPLYING GOODS AND SERVICES USED BY A DIRECT BROADCAST SATELLITE SERVICE PROVIDER; (6) REFUNDS, REBATES OR DISCOUNTS MADE TO SUBSCRIBERS OR CUSTOMERS, TO ADVERTISERS OR TO OTHER PERSONS; (7) REVENUE FROM TELECOMMUNICATIONS SERVICE AS DEFINED IN 47 U.S.C. SECTION 153(46); (8) REVENUE FROM INFORMATION SERVICES AS DEFINED IN 47 U.S.C. SECTION 153(20); (9) REVENUE FROM ANY SERVICE THAT IS SUBJECT TO TAX UNDER ARTICLE TWENTY-EIGHT OF THIS CHAPTER; (10) REVENUE FROM THE SALE OF CAPITAL ASSETS OR SURPLUS EQUIPMENT NOT USED BY THE PURCHASER TO RECEIVE DIRECT BROADCAST SATELLITE SERVICE FROM THE DIRECT BROADCAST SATELLITE SERVICE PROVIDER; (11) REIMBURSEMENTS MADE BY PROGRAMMERS TO THE DIRECT BROADCAST SATEL- LITE SERVICE PROVIDER FOR MARKETING COSTS INCURRED BY THE DIRECT BROAD- CAST SATELLITE SERVICE PROVIDER FOR THE INTRODUCTION OF NEW PROGRAMMING THAT EXCEED THE ACTUAL COSTS INCURRED BY THE DIRECT BROADCAST SATELLITE SERVICE PROVIDER; (12) LATE PAYMENT FEES COLLECTED FROM SUBSCRIBERS OR CUSTOMERS; OR (13) CHARGES, OTHER THAN THOSE CHARGES SPECIFICALLY DESCRIBED HEREIN, THAT ARE AGGREGATED OR BUNDLED WITH SUCH SPECIFICALLY-DESCRIBED CHARGES ON A SUBSCRIBER OR CUSTOMER'S BILL, IF THE DIRECT BROADCAST SATELLITE SERVICE PROVIDER CAN REASONABLY IDENTIFY THE CHARGES IN ITS BOOKS AND RECORDS KEPT IN THE REGULAR COURSE OF BUSINESS. (E) "PERSON", MEANS AN INDIVIDUAL, PARTNERSHIP, LIMITED LIABILITY COMPANY, TRUST OR ASSOCIATION, WITH OR WITHOUT TRANSFERABLE SHARES, JOINT-STOCK COMPANY, CORPORATION, SOCIETY, CLUB, ORGANIZATION, INSTITU- TION, ESTATE, RECEIVER, TRUSTEE, ASSIGNEE OR REFEREE AND ANY OTHER PERSON ACTING IN A FIDUCIARY OR REPRESENTATIVE CAPACITY, WHETHER APPOINTED BY A COURT OR OTHERWISE, AND ANY COMBINATION OF INDIVIDUALS ACTING AS A UNIT. (F) "SUBSCRIBER OR CUSTOMER", MEANS ANY PERSON OR MEMBER OF THE GENER- AL PUBLIC WHO RECEIVES DIRECT BROADCAST SATELLITE SERVICE FROM A DIRECT BROADCAST SATELLITE SERVICE PROVIDER AND DOES NOT FURTHER DISTRIBUTE SUCH SERVICE IN THE ORDINARY COURSE OF BUSINESS. (G) "VIDEO PROGRAMMING", MEANS PROGRAMMING PROVIDED BY, OR COMPARABLE TO PROGRAMMING PROVIDED BY, A TELEVISION BROADCAST STATION INCLUDING, BUT NOT LIMITED TO, VIDEO PROGRAMMING PROVIDED BY LOCAL NETWORKS, NATIONAL BROADCAST NETWORKS, CABLE NETWORKS AND ALL FORMS OF PAY-PER-VIEW VIDEO ENTERTAINMENT. 2. EXCISE IMPOSED. AN EXCISE IS HEREBY IMPOSED UPON THE PROVISION OF DIRECT BROADCAST SATELLITE SERVICE TO A SUBSCRIBER OR CUSTOMER BY ANY DIRECT BROADCAST SATELLITE SERVICE PROVIDER IN AN AMOUNT EQUAL TO 5 PER CENT OF THE DIRECT BROADCAST SATELLITE SERVICE PROVIDER'S GROSS REVENUES DERIVED FROM OR ATTRIBUTABLE TO SUCH CUSTOMER OR SUBSCRIBER. 3. REIMBURSEMENT. REIMBURSEMENT FOR THE EXCISE IMPOSED IN THIS SECTION SHALL BE PAID BY THE SUBSCRIBER OR CUSTOMER TO THE DIRECT BROADCASTS. 3827 3
SATELLITE SERVICE PROVIDER AND EACH DIRECT BROADCAST SATELLITE SERVICE PROVIDER PROVIDING DIRECT BROADCAST SATELLITE SERVICE TO SUBSCRIBERS OR CUSTOMERS SHALL COLLECT FROM SUCH SUBSCRIBER OR CUSTOMER THE FULL AMOUNT OF THE EXCISE IMPOSED WITH RESPECT TO GROSS REVENUES DERIVED FROM OR ATTRIBUTABLE TO SUCH CUSTOMER OR SUBSCRIBER AND SUCH EXCISE SHALL BE A DEBT FROM THE SUBSCRIBER OR CUSTOMER TO THE DIRECT BROADCAST SATELLITE SERVICE PROVIDER WHEN ADDED TO THE SUBSCRIBER OR CUSTOMER'S INVOICE FOR VIDEO PROGRAMMING SERVICE AND SHALL BE RECOVERABLE AT LAW IN THE SAME MANNER AS OTHER DEBTS. 4. CERTIFICATE OF REGISTRATION. EVERY DIRECT BROADCAST SATELLITE SERVICE PROVIDER SUBJECT TO THE TAX IMPOSED BY THIS SECTION SHALL FILE WITH THE COMMISSIONER A CERTIFICATE OF REGISTRATION, IN A FORM PRESCRIBED BY THE COMMISSIONER, AT LEAST TWENTY DAYS PRIOR TO COMMENCING BUSINESS OR OPENING A NEW PLACE OF BUSINESS, SUCH SELLING OR TAKING OF POSSESSION OR PAYMENT DERIVED FROM DIRECT BROADCAST SATELLITE SERVICE, OR THE EFFECTIVE DATE OF THIS SECTION, WHICHEVER COMES FIRST. THE COMMISSIONER SHALL FURNISH TO EACH DIRECT BROADCAST SATELLITE SERVICE PROVIDER GENERAL INFORMATION ABOUT THE TAX IMPOSED UNDER THIS SECTION INCLUDING INFORMATION ON RECORDS TO BE KEPT, RETURNS AND PAYMENTS, NOTIFICATION REQUIREMENTS AND FORMS. SUCH CERTIFICATE OF REGISTRATION MAY BE AMENDED IN ACCORDANCE WITH RULES PROMULGATED BY THE COMMISSIONER. 5. RETURNS. EVERY PROVIDER OF DIRECT BROADCAST SATELLITE SERVICES SUBJECT TO TAX UNDER THIS SECTION SHALL FILE, ON OR BEFORE MARCH FIFTEENTH OF EACH YEAR, A RETURN FOR THE YEAR ENDED ON THE PRECEDING DECEMBER THIRTY-FIRST, AND PAY THE TAX DUE, WHICH RETURN SHALL STATE THE GROSS RECEIPTS FOR THE PERIOD COVERED BY EACH SUCH RETURN AND THE RESALE EXCLUSIONS DURING SUCH PERIOD. RETURNS SHALL BE FILED WITH THE COMMIS- SIONER ON A FORM TO BE FURNISHED BY THE COMMISSIONER FOR SUCH PURPOSE AND SHALL CONTAIN SUCH OTHER DATA, INFORMATION OR MATTER AS THE COMMIS- SIONER MAY REQUIRE TO BE INCLUDED THEREIN. NOTWITHSTANDING THE FOREGOING PROVISIONS OF THIS SUBDIVISION, THE COMMISSIONER MAY REQUIRE ANY PROVID- ER OF DIRECT BROADCAST SATELLITE SERVICES TO FILE AN ANNUAL RETURN, WHICH SHALL CONTAIN ANY DATA SPECIFIED BY THE COMMISSIONER, REGARDLESS OF WHETHER SUCH PROVIDER IS SUBJECT TO TAX UNDER THIS SECTION. EVERY RETURN SHALL HAVE ANNEXED THERETO A CERTIFICATION BY THE HEAD OF THE PROVIDER OF TELECOMMUNICATION SERVICES MAKING THE SAME, OR OF THE OWNER OR OF A PARTNER OR MEMBER THEREOF, OR OF A PRINCIPAL OFFICER OF THE CORPORATION, IF SUCH BUSINESS BE CONDUCTED BY A CORPORATION, TO THE EFFECT THAT THE STATEMENTS CONTAINED THEREIN ARE TRUE. 6. APPLICABILITY. IF ANY PROVISION OF THIS SECTION CONFLICTS WITH ANY OTHER PROVISION CONTAINED IN THIS ARTICLE, THE PROVISION OF THIS SECTION SHALL CONTROL, BUT THE PROVISIONS OF THIS ARTICLE WHICH DO NOT CONFLICT WITH THE PROVISIONS OF THIS SECTION SHALL APPLY WITH RESPECT TO THE TAXES UNDER THIS SECTION, SO FAR AS THEY ARE, OR MAY BE MADE APPLICABLE. 7. LIABILITY. A DIRECT BROADCAST SATELLITE SERVICE PROVIDER WHO FAILS TO PAY THE COMMISSIONER ANY SUMS REQUIRED TO BE PAID BY THIS SECTION SHALL BE PERSONALLY AND INDIVIDUALLY LIABLE THEREFOR TO THE STATE. THE TERM "DIRECT BROADCAST SATELLITE SERVICE PROVIDER", AS USED IN THIS SECTION, INCLUDES AN OFFICER OR EMPLOYEE OF A CORPORATION OR OTHER BUSI- NESS ENTITY OR A MEMBER OR EMPLOYEE OF A PARTNERSHIP WHO, AS SUCH OFFI- CER, EMPLOYEE OR MEMBER, IS UNDER A DUTY TO PAY OVER THE TAXES IMPOSED BY THIS SECTION. S 2. This act shall take effect immediately and shall apply to all tax years commencing on or after the first of January next succeeding the date on which it shall have become a law.