Supreme Court Hears Case On Ark. Cable Tax

Arguments were held last week before the U.S. Supreme Court on whether an Arkansas cable tv tax amounts to unfair discrimination since broadcasters and other forms of media do not face the same tax.

The case, brought to the high court by the Arkansas Cable Television Assn., has First Amendment implications for the cable tv industry. Case stems from a 1987 Arkansas law extending the state, county and city sales tax to cable tv operators. The tax varied from 4% to 6% in regions throughout the state and has raised more than $8.5 million from cable firms.

Cable operators challenged the law after enactment, claiming that satellite dish owners and other forms of media are not subject to the same tax. A lower court upheld the law, but the Arkansas Supreme Court found a portion of it to be unconstitutional.

Cable operators have lined up an unusual ally in their battle to overturn the Arkansas law. The National Assn. of Broadcasters, normally an ardent foe of the cable industry, has filed a brief with the high court asking that the law be overturned.

A Supreme Court decision is expected by July.

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