Justia Communications Law Opinion Summaries

A provision in the Multichannel Video Programming and Communications Services Tax (the Telecom Tax) prohibiting “every political subdivision of the state” from collecting franchise fees or taxes on franchises subject to the Telecom Tax is unconstitutionally void as applied to protesting cities.Four Kentucky cities and the Kentucky League of Cities, Inc. (collectively, Cities) filed a petition for declaratory relief alleging that the Telecom Tax’s Prohibition Provision violated their right to grant franchises and to collect franchise fees as provided in sections 163 and 164 of the Kentucky Constitution. The circuit court dismissed the petition. The court of appeals vacated the judgment of the circuit court and remanded, concluding that the Telecom Tax’s Prohibition Provision violated sections 163 and 164. The Supreme Court affirmed, holding that the Telecom Tax’s Prohibition Provision was unconstitutionally void as applied to the Cities. View "Kentucky CATV Ass’n v. City of Florence" on Justia Law

Plaintiff segTEL, Inc. was a telecommunications company that owned and/or operated a fiber optic cable network throughout New Hampshire, including within the City of Nashua. It did not own any poles or conduits within the City, and did not have its own license from the City authorizing its occupation of the City’s rights of way. Instead, pursuant to pole attachment agreements with the utility providers, the plaintiff remitted a fee to the utility providers in exchange for the right to place its fiber optic cables on their poles and conduits. These pole attachment agreements did not require the plaintiff to pay property taxes assessed by the City. Having become aware of plaintiff’s use of the utility providers’ poles and conduits, the City in 2014 assessed plaintiff property taxes of $1,507.94 for its use of the City’s rights of way. Plaintiff applied for an abatement, which the City denied. Thereafter, plaintiff brought this action in superior court, seeking: (1) a declaratory judgment that the City was not entitled to impose the tax; and (2) to strike the City’s 2014 tax assessment. The trial court granted summary judgment to plaintiff, ruling that “[b]ecause [the plaintiff] has not entered into an agreement in which it consented to be taxed,” the City could not lawfully tax the plaintiff for its use and occupation of the City’s rights of way. The City appealed, and finding no reversible error in the trial court’s judgment, the New Hampshire Supreme Court affirmed. View "Segtel, Inc. v. City of Nashua" on Justia Law

Plaintiff DirecTV, Inc. appealed a superior court decision denying a petition for property tax abatement for the tax years 2007, 2008, and 2009. The property at issue was located in New Hampton and used by DirecTV as a satellite uplink facility. On appeal, DirecTV argued that the trial court erred when it: (1) ruled that satellite antennas and batteries used to provide backup power constituted fixtures; and (2) determined the value of the property. The New Hampshire Supreme Court concluded after review that the antennas and batteries were not fixtures, and therefore, taxable as real estate. The Court reversed the superior court on that issue, vacated its decision on the valuation of the property, and remanded for further proceedings. View "DirecTV, Inc. v. Town of New Hampton" on Justia Law

8x8 provides telephone services via Voice over Internet Protocol (VoIP). Customers use a digital terminal adapter, containing 8x8’s proprietary firmware and software. Customers’ calls are switched to traditional lines and circuits when necessary; 8x8 did not pay Federal Communications Excise Tax (FCET) to the traditional carriers, based on an “exemption certificate,” (I.R.C. 4253). Consistent with its subscription plan, 8x8 collected FCET from its customers and remitted FCET to the IRS. In 2005, courts held that section 4251 did not permit the IRS to tax telephone services that billed at a fixed per-minute, non-distance-sensitive rate. The IRS ceased collecting FCET on “amounts paid for time-only service,” stated that VoIP services were non-taxable, and established a process seeking a refund of FCET that had been exacted on nontaxable services, stating stated that a “collector” can request a refund if the collector either “establishes that it repaid the amount of the tax to the person from whom the tax was collected”; or “obtains the written consent of such person to the allowance of such credit or refund.” The IRS denied 8x8’s refund claim. The Claims Court concluded that 8x8 lacked standing and granted the government summary judgment. The Federal Circuit affirmed; 8x8 did not bear the economic burden of FCET, but sought to recover costs borne by its customers, contrary to the Code. The court rejected an argument that FCET was “treated as paid” during the transfer of services to traditional carriers. View "8x8, Inc. v. United States" on Justia Law

The Oregon Tax Court set aside a determination by the Department of Revenue (the department) that taxpayer DIRECTV’s property in Oregon was subject to central assessment under ORS 308.505 to 308.665. The department argued that, contrary to the Tax Court’s opinion, DIRECTV was a “communications” business whose property is subject to central assessment under ORS 308.515(1). The Supreme Court agreed and, therefore, reversed and remanded. View "DIRECTV, Inc. v. Dept. of Rev." on Justia Law

The City of Eugene sued to collect from Comcast of Oregon II, Inc. (Comcast) a license fee that the city, acting under a municipal ordinance, imposes on companies providing “telecommunications services” over the city’s rights of way. Comcast did not dispute that it used the city’s rights of way to operate a cable system. However it objected to the city’s collection effort and argued that the license fee was either a tax barred by the Internet Tax Freedom Act (ITFA), or a franchise fee barred by the Cable Communications and Policy Act of 1984 (Cable Act). The city read those federal laws more narrowly and disputed Comcast’s interpretation. The trial court rejected Comcast’s arguments and granted summary judgment in favor of the city. The Court of Appeals affirmed. Finding no reversible error, the Supreme Court affirmed. View "City of Eugene v. Comcast of Oregon II, Inc." on Justia Law

New Cingular Wireless PCS LLC, an affiliate of AT&T Mobility LLC, provides both wireless voice telephone services and data services to customers in the city of Clyde Hill. Clyde Hill imposes a local utility tax on wireless telephone services, which applies to both voice and data services. New Cingular had for years collected utility taxes from Clyde Hill's residents on all charges for wireless and telephone voice and data services, and paid the tax to the city. In this case, the issue presented for the Supreme Court's review was whether the cellular service provider could challenge a city fine through an action for declaratory judgment in superior court. The trial court dismissed, holding that a declaratory judgment action was improper and judicial review should have been sought by way of a statutory writ of review under RCW 7 .16.040. The Court of Appeals reversed, reinstating the declaratory action and remanding for a decision on the merits. Finding no reversible error in the Court of Appeals' judgment, the Supreme Court affirmed. View "New Cingular Wireless PCS, LLC v. City of Clyde Hill" on Justia Law

In 2012, the Attorney General (AG) filed a complaint resulting in a civil enforcement action by the AG, alleging that Sprint knowingly violated the New York Tax Law, engaged in fraudulent or illegal acts, and submitted false documents to the State pursuant to the New York False Claims Act (FCA). Sprint moved to dismiss the complaint for failure to state a cause of action. Supreme Court denied the motion, and the Appellate Division affirmed. The Court of Appeals affirmed, holding (1) the New York Tax Law imposes sales tax on interstate voice service sold by a mobile provider along with other services for a fixed monthly charge; (2) the statute is unambiguous; (3) the statute is not preempted by federal law; (4) the AG’s complaint sufficiently pleads a cause of action under the FCA; and (5) the damages recoverable under the FCA are not barred by the ex post facto clause of the United States Constitution. View "People v. Sprint Nextel Corp." on Justia Law

In 2006, Cable One, Inc., which offers cable television and internet access, began offering Voice over Internet Protocol (VoIP) service to its residential customers in Sioux City. In 2008 and 2009, the Iowa Department of Revenue determined that Cable One should be assessed based on the value of its telephone operating property in the state. Cable One appealed, arguing that it was not a telephone company subject to taxation under Iowa Code chapter 433 because VoIP is not the equivalent of telephone service. An administrative law judge (ALJ) in the Iowa Department of Inspections and Appeals entered summary judgment in favor of Cable One, concluding that the company did not fit the “historical context of a ‘telephone company.’” The Iowa State Board of Tax Review agreed with the ALJ that Cable One was not subject to assessment under chapter 433. The district court affirmed. The Supreme Court reversed, holding (1) wiring that was originally installed for cable television purposes but is now also used to provide VoIP service is a “telephone line”; and (2) therefore, Cable One, which operates these lines, is subject to central assessment for property tax purposes as a telephone company. View "Kay-Decker v. Iowa State Bd. of Tax Review" on Justia Law

The issue before the Supreme Court in this case was whether the Alltel Entities (collectively Petitioners Alltel Communications, Inc. and its regional subsidiaries), were included in the definition of "telephone company" for the purpose of increased license fees in S.C. Code Ann. section 1220-100 (2000). Pursuant to cross motions for summary judgment, the Administrative Law Court (ALC) granted summary judgment in favor of Petitioners, finding that they were not telephone companies for purposes of section 12-20-100. Alternatively, the ALC found that if the statute were ambiguous, Petitioners would prevail under the rule that an ambiguity in a taxing statute must be construed in favor of the taxpayer. Though the court of appeals recognized that the application of section 12-20-100 to Petitioners was not "absolutely clear," it reversed the grant of summary judgment and remanded the matter to the ALC for additional fact finding. Upon review, the Supreme Court reversed the court of appeals and reinstated the ALC's grant of summary judgment in favor of Petitioners. The term "telephone company" was not a defined term and its application to Petitioners was "doubtful." The presence of an ambiguity in a tax assessment statute requires that a court resolve that doubt in favor of the taxpayer.View "Alltel v. SCDOR" on Justia Law