Can a Texas local taxing jurisdiction impose local sales tax on direct-to-home satellite television programming?

Plain-English summary

A taxpayer asked about the sales tax treatment of direct-to-home satellite television service. The Comptroller confirmed that the federal Telecommunications Act of 1996 preempts local taxing jurisdictions from imposing sales tax on direct satellite-to-home programming — so no local sales tax is due on satellite programming purchased for home use, regardless of whether the customer is located inside or outside a local taxing jurisdiction.

The preemption is narrow: it does not extend to sales of the satellite equipment itself — only to the programming service. The letter also notes that complaints about violations of federal telecommunications law go to the Federal Communications Commission, not the Comptroller.

What this means for you

Satellite TV providers and subscribers

Local sales tax should not be charged on direct-to-home satellite programming charges anywhere in Texas — this is a federal law preemption, not a state exemption, so it applies uniformly regardless of local taxing jurisdiction. But local tax can still apply to the sale of satellite dishes, receivers, and other equipment.

Accountants and tax professionals

A concise confirmation that federal law (not Texas Tax Code) is the source of this exemption for satellite programming, distinguishing it sharply from equipment sales, which remain subject to ordinary state and local sales tax rules.

Common questions

Q: Is local sales tax due on satellite TV programming in Texas?
A: No — the federal Telecommunications Act of 1996 preempts local taxing jurisdictions from taxing direct-to-home satellite programming.

Q: Does this exemption cover the satellite dish and equipment too?
A: No, the preemption is limited to the programming service and does not extend to equipment sales.

Q: Where do I complain about a violation of federal telecommunications law?
A: The Federal Communications Commission, not the Texas Comptroller.

Q: Can I rely on this letter for my own situation?
A: No. This opinion is based on the facts presented, and additional or different facts may yield different results; it can be relied on only by the taxpayer it was issued to.

Citations and references

Federal law:

• Telecommunications Act of 1996 (preempts local taxation of direct-to-home satellite programming)

Source

• STAR search: https://star.comptroller.texas.gov/search?doc_type_code=L&tax_type_code=SST
• Opinion: https://star.comptroller.texas.gov/view/200002051L

Original ruling text

February 11, 2000

Dear **:

Thank you for your recent letter regarding satellite television service and
Texas sales tax.

The Telecommunications Act of 1996 preempts local taxing jurisdictions from
imposing sales tax on direct satellite to home programming. The preemption
does not extend to sales of equipment.

If you are purchasing satellite programming for your home, no local sales tax
is due, whether you are inside or outside a local taxing jurisdiction.

The Federal Communications Commission handles complaints regarding violations
of federal telecommunications law. The Dallas FCC office's phone number is
(214) 235-3369, and their web site is .

This opinion is based on the facts presented. Additional or different facts
may yield different results.

You may call me toll free 1-800-531-5441, extension 5-9787, of you have any
questions or need more information. The direct line is 512/305/9787. You may
also write to Tax Policy Division, Comptroller of Public Accounts.

Sincerely,

Philip Knisely
Tax Policy Division