Many of the cable boxes that Bay Staters pay a monthly fee to rent or lease from their cable provider could soon be newly subjected to the state’s 6.25% sales tax, under a proposal the Department of Revenue put out for comment Tuesday.
A few months ahead of the early 2009 discontinuation of analog television that pushed viewers to get cable packages or digital converter boxes to accommodate the new digital signal, DOR issued a directive that declared that “sales and rentals of cable television converter boxes to Massachusetts cable television customers are exempt from sales and use taxes” because they fit into a statutory exemption for things “consumed or used directly and exclusively … in the operation of commercial … television transmission.”
But technology has changed and DOR said the cable converter boxes, set-top boxes and cable system terminal devices it considered in 2008 were “only for the purpose of receiving programming or information from the cable provider, or for implementing parental controls.”
A working draft directive put out for comments from tax practitioners Tuesday would apply the state’s 6.25% sales tax to any such devices that “can do more than connect a cable system to a TV broadcast receiver, and allow for parental controls.” That means cable boxes that have DVR abilities or other common features could soon be subject to the tax.
“Specifically, a Device with additional features including, but not limited to, the ability to (i) schedule, record, locally store and play back recorded content for later viewing, (ii) access or run software applications such as web-based content streaming services, games, productivity tools, or other non-television applications, or (iii) transmit recorded content to a smartphone or tablet or access recorded content from another digital video recorder, is not exclusively used in the operation of commercial television transmission, and therefore is not exempt,” DOR’s draft directive says.
DOR will take comments on the draft until the close of business on March 21 and the agency is specifically targeting “Massachusetts customers of cable television providers” as well as the providers themselves. Comments can be emailed to rulesandregs@dor.state.ma.us.
(Copyright (c) 2024 State House News Service.