Satellite TV users overtaxed

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Thousands of Mainers are being overcharged state tax on satellite TV service.

The state and satellite companies have known about the problem for months. But so far, according to state officials and customers, nothing has changed.

“Hopefully soon,” said Peter Beaulieu, director of Maine Revenue Service’s sales tax division.

The state began taxing satellite service last October to mirror a similar tax imposed on cable TV a couple of years ago. The tax – 5 percent – was supposed to be charged only on “extended services.”

For example, a $30-a-month basic satellite plan would be tax free. If a customer upgraded to a $60-a-month plan, the $30 difference would be taxed at 5 percent.

But instead, customers are being taxed on the entire amount.

The overcharge may only be a dollar or two each month, but with 126,000 satellite customers in Maine those dollars add up.

Maine’s sales tax division has received numerous complaints from customers of both Dish Network and DirecTV, the two satellite companies that operate in Maine. State officials have been talking to Dish Network and DirecTV about the problem for a few months, according to Beaulieu.

“We’re in contact with them almost every week,” he said.

But customers are still overcharged.

Susan Gadberry, who lives in Manchester, said she and her mother have both been complaining about their Dish Network charges since December. State officials told Gadberry the problem would be fixed in January, she said, but her bill for this month shows the satellite company is still taxing 5 percent of everything. She said her mother’s bill shows the same.

Gadberry has also complained to Dish Network, she said, but “when you get through to them you can’t get anyone who will do anything. They just want to sign you up for more services.”

Despite repeated attempts over several days, the Sun Journal could not reach anyone from Dish Network for comment.

Beaulieu, the state official, believes the tax miscalculations may possibly stem from the tax software the satellite companies use.

But a DirecTV spokesman says the only problem is the tax itself.

“I lobbied against this. I said this is going to be a nightmare,” said Brian D. Smith, director of sales and use tax for DirecTV.

Satellite companies do not have “basic” and “extended” plans anymore, he said. Instead, they offer a range of plans tailored to viewers’ needs – a sports fan might get a plan with a lot of sports channels, for example, while a movie fan gets a movie package.

While about half the states tax satellite service, Smith said, Maine is the only one to tax “extended service” only.

So what is “extended” when there is no basic?

“This is a squirrely issue,” Smith said.

DirecTV’s cheapest plan costs just under $42 a month. To comply with Maine’s new mandate, the company taxes the difference between that cheap plan and whatever more expensive plan a customer gets, according to Smith.

He said DirecTV is figuring the tax correctly and has not gotten any complaints from customers or state officials about it.

Beaulieu, however, maintains that customers have complained to his office. He said the state has talked to DirecTV, as well as Dish Network, about ongoing mistakes.

Until the issue is resolved, he advises customers to call their satellite company if they feel they’ve been overcharged. If they have been, they can ask for a refund from the company.

If all else fails, he said, they can get their money through the state by calling 624-9693.

The new satellite service tax started in October and is expected to bring in more than $485,600 this fiscal year. It is projected to raise more than $721,500 next year.

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