ST 1995-03 - Cable TV Companies - UPDATED November,
2004
Supersedes Information Release Dated November, 1995
For sales and use tax purposes, the Department of Taxation
considers companies that provide cable TV service to be
rendering a public utility service, as defined in Section
5739.01(P) of the Ohio Revised Code. As such, they may claim
exemption from payment of sales or use tax, under Section
5739.02(43)(a) of the Revised Code, on the purchase of items
“used directly in the rendition of a public utility service.”
Tangible personal property qualifies for this exemption if it
is or is to be incorporated into and will become a part of
the utility’s production, transmission, or distribution
system. Items exempted include, but are not limited to:
1. Coaxial cable
2. Fiber optic cable
3. Satellite dish receivers
4. Transmitting equipment
5. Signal boosting equipment
6. Repair and installation tools and equipment
7. Specially designed and equipped motor vehicles used in the
repair and maintenance of the production, transmission, or
distribution system.
By law, tangible personal property that is or is to be
incorporated into real property is not entitled to the
exemption.
“Pole rental” or “attachment charge” is an amount cable TV
companies pay to telephone or electric companies for the
right to attach cable to existing utility poles. The
Department of Taxation previously determined that the pole
rental charges are not sales since the cable TV companies do
not exercise sufficient control over the utility poles.
Therefore, no sales or use tax would be due on the amounts
charged for pole rental or “attachment charges.”
Currently, cable TV companies provide a service (one-way
audit and video programming) that is not subject to Ohio
sales tax. However, the sale or rental of tangible personal
property (such as converter boxes and remote channel
selectors) is subject to sales tax. Cable TV companies must
separate the service charges from the sale or rental
(including any labor charges related to the installation of
the items being sold or rented) of tangible personal property
and charge tax accordingly.
Cable TV companies that provide telecommunication services
[as defined in Section 5739.01 (AA) of the Ohio Revised Code]
would be required to collect Ohio sales tax on these
telecommunication service charges.
*** SPECIAL NOTES ***
Companies that provide wireless TV transmission (i.e., direct
to home satellite transmissions or other broadcast signals
that are received by the customer through an antenna or dish
apparatus) are NOT considered to be public utilities. They
are NOT entitled to an exception on purchased equipment and
supplies described in paragraph one above.
If you have any questions regarding this matter, contact one
of our Taxpayer Services Centers at 1-888-405-4039, or e-mail
us through our website at tax.ohio.gov.
OHIO RELAY SERVICE FOR THE
HEARING AND SPEECH IMPAIRED
Telephone: 1-800-750-0750