senate Bill S3827

Enacts the Multichannel Video Programming Distributor Competition Act

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Bill Status


  • Introduced
  • In Committee
  • On Floor Calendar
    • Passed Senate
    • Passed Assembly
  • Delivered to Governor
  • Signed/Vetoed by Governor
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actions

  • 21 / Feb / 2013
    • REFERRED TO INVESTIGATIONS AND GOVERNMENT OPERATIONS
  • 08 / Jan / 2014
    • REFERRED TO INVESTIGATIONS AND GOVERNMENT OPERATIONS

Summary

Enacts the Multichannel Video Programming Distributor Competition Act.

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Bill Details

See Assembly Version of this Bill:
A5118
Versions:
S3827
Legislative Cycle:
2013-2014
Current Committee:
Senate Investigations And Government Operations
Law Section:
Tax Law
Laws Affected:
Add §186-g, Tax L

Sponsor Memo

BILL NUMBER:S3827

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.

view bill text
                    S T A T E   O F   N E W   Y O R K
________________________________________________________________________

                                  3827

                       2013-2014 Regular Sessions

                            I N  S E N A T E

                            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 BROADCAST

S. 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.

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