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Budget Summary FY2010

Outside Section 61
Data Current as of:  1/26/2010




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Direct Broadcast Satellite Service Tax I

SECTION 61.   The General Laws are hereby amended by inserting after chapter 64L the following chapter:-

CHAPTER 64M

TAXATION OF DIRECT BROADCAST SATELLITE SERVICE

Section 1. As used in this chapter, the following words shall have the following meanings unless the context otherwise requires:

"Commissioner", the commissioner of revenue.

"Direct broadcast satellite service", 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.

"Direct broadcast satellite service provider", a person who transmits, broadcasts or otherwise provides direct broadcast satellite service to subscribers or customers in the commonwealth.

"Gross revenues", all consideration of any kind or nature received by a direct broadcast satellite service provider, or an affiliate of such person, in connection with the provision of direct broadcast 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 revenues shall not include:

(1) charges for the rental of equipment related to the provision of direct broadcast satellite service;

(2) activation, installation, repair and maintenance charges or similar service charges related to the provision of direct broadcast satellite 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 service other than direct broadcast satellite service, including:

(A) telecommunications service as defined in 47 U.S.C. section 153(46);

(B) information service as defined in 47 U.S.C. section 153(20); or

(C) any other service that is not a direct broadcast satellite service;

(8) revenue from any service that is subject to tax under chapter 64H or 64I;

(9) the tax imposed by this chapter or any other tax of general applicability imposed on a direct broadcast satellite service provider or a purchaser of direct broadcast satellite service, by a federal, state or local governmental entity and required to be collected by a person and remitted to the taxing entity;

(10) any foregone revenue from providing free or reduced-cost direct broadcast satellite service to any person, including employees of the direct broadcast satellite service provider or any governmental entity as required or authorized by federal, state or local law, except revenue foregone in exchange for the goods or services through a trade or barter arrangement;

(11) 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;

(12) reimbursements made by programmers to the direct broadcast satellite service provider for marketing costs incurred by the direct broadcast satellite service provider for the introduction of new programming that exceed the actual costs incurred by the direct broadcast satellite service provider;

(13) late payment fees collected from subscribers or customers; or

(14) 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.

"Person", an individual, partnership, trust or association, with or without transferable shares, joint-stock company, corporation, society, club, organization, institution, 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.

"Subscriber or customer", a member of the general 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.

"Video programming", 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 and all forms of pay-per-view video entertainment.

Section 2. 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. A direct broadcast satellite service provider shall pay the excise to the commissioner at the time provided for filing the return required by section 16 of chapter 62C.

Section 3. Reimbursement for the excise imposed in this chapter shall be paid by the subscriber or customer to the direct broadcast 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.

Section 4. No person shall do business in this commonwealth as a direct broadcast satellite service provider unless a registration shall have been issued to him in accordance with section 67 of chapter 62C.

Section 5. A direct broadcast satellite service provider who fails to pay the commissioner any sums required to be paid by this chapter shall be personally and individually liable therefor to the commonwealth. The term "direct broadcast satellite service provider", as used inthis section, includes an officer or employee of a corporation or other business entity or a member or employee of a partnership who, as such officer, employee or member, is under a duty to pay over the taxes imposed by this chapter.

Section 6. A person not a resident of the commonwealth who engages in the business of providing direct broadcast satellite service to subscribers or customers in the commonwealth shall, as a condition precedent to engaging in such business and by so engaging in such business, be deemed thereby to appoint the state secretary as his agent for the service of process in any judicial proceeding under this chapter. Such process shall be served by delivering a copy of the process in the hands of the state secretary or a deputy or in the office of the state secretary. Such service shall be sufficient service upon the person; provided, however, that such notice of such service and a copy of the process shall, at least 15 days before the return day of such process, be sent by registered mail to such person's last known address, and that the sender's registered mail receipt and the commissioner's affidavit of compliance with this section shall be appended to the process and filed in the action or proceeding on or before the return day of the process or within such further time as the court may allow. The court in which the action or proceeding is pending may order such continuances as may be necessary to afford the defendant reasonable opportunity to defend the action. Service of process in the foregoing manner shall have the same force and validity as if served upon the taxpayer personally within the commonwealth.