OLR Research Report

December 28, 2011




By: Judith Lohman, Assistant Director

You asked for (1) an explanation of the “double tax” that applies to cable and satellite TV service and (2) information on recent legislative proposals concerning the issue.


The state imposes two taxes that affect cable television service. One is a 5% tax on the gross amounts companies earn from providing cable television programming in Connecticut. The other is a 6.35% sales tax on the monthly amount each company charges for cable or satellite TV service. The gross earnings tax was applied to cable TV companies in 1965 and satellite TV companies in 2003. The sales tax was extended to both cable and satellite TV service in 1989.

Some argue that, because the sales tax is applied to the full monthly cable or satellite TV service charge, including the amount attributable to the gross receipts tax, cable and satellite TV service is subject to a “double tax.” But, though a customer pays both taxes at the same time, the two apply to different things. The sales tax, although collected by the seller, is actually a transaction tax on the buyer, who is liable for it even if the seller fails to collect it. Because of this, sales tax must, by law, be stated separately on a customer's bill.

The liability for gross earnings tax, on the other hand, is on the cable or satellite TV company itself. The company must pay the tax quarterly based on its gross earning from lines, facilities, apparatus, and auxiliary equipment in this state used to operate its system. There is no legal requirement for a company to collect the tax from customers or list each customer's share of the tax separately on monthly bills, even though most of them do.



There are two possible ways to address the “double tax” issue: (1) eliminate one of the taxes or (2) exclude each customer's pro rata share of the company's gross earnings tax when figuring the sales tax on the service. Either change would require legislation and affect state revenue. Since 2000, there have been seven legislative proposals to eliminate the “double tax,” all of them through the second of the two methods.

None of these proposals was enacted. The only one to reach the floor of either house was sSB 21 (File 593) in the 2000 session. It would have exempted from the sales tax that part of a customer's bill attributable to state's gross earnings tax, effective with sales on or after July 1, 2000. Although the bill received favorable reports from the Energy and Technology and the Finance, Revenue and Bonding committees, it died on the Senate floor without a vote.

The last proposal on this topic to have a public hearing was SB 89, raised by the Energy and Technology Committee in 2002. The committee had two public hearings on the bill on February 21 and 26, 2002. The Energy Committee reported the bill favorably to the Finance Committee, which took no action on it. 

The most recent proposal (HB 5084) was introduced in the 2008 session as a proposed bill. The bill was referred to the Energy and Technology Committee, which took no action on it.