Florida Department of Revenue v. DirecTV, Inc.Annotate this Case
The Communications Services Tax (CST) imposed a 6.8 percent tax rate on cable service and a 10.8 percent tax rate on satellite service. DIRECTV, Inc. and Echostar, LLC filed suit seeking a declaratory judgment holding the sales tax provision in the CST unconstitutional, a permanent injunction against enforcement of the provision, and a refund of taxes paid pursuant to the provision. The trial court found that the CST does not violate the Commerce Clause. The First District Court of Appeal reversed, concluding that the CST is invalid because it favors communications that use local infrastructure and therefore has a discriminatory effect on interstate commerce. The Supreme Court reversed, holding that the CST is not discriminatory in either its purpose or its effect and therefore does not violate the dormant Commerce Clause.