Ezel / Tax Rulings / CT
CT Ruling 91-25 Sales and Use Taxes 1991-08-29

Is delivering video programming to consumers by microwave or satellite a 'community antenna television service' subject to Connecticut sales tax?

Short answer: Yes -- it is a 'community antenna television' (CATV) service. A company delivered video programming directly to consumers by microwave or satellite, with customers using descrambling equipment. DRS ruled this fits the definition of 'community antenna television service' in Conn. Gen. Stat. § 12-407(27), because it is a 'noncable communications service' / 'telecommunications service' (Conn. Gen. Stat. §§ 16-1 and 16-247a) that is NOT federal-law 'cable service' -- which requires a 'cable operator' delivering over a 'cable system' of closed transmission paths, whereas microwave and satellite are not a closed transmission medium. Community antenna television service is a taxable enumerated service in Connecticut, so this microwave/satellite video service is taxed the same as cable.

Apply this to your situation

This page answers the general question as of 1991. Ezel answers yours, under current Connecticut tax law, with citations.

Currency note: this ruling is from 1991
Subsequent statutory amendments, regulation changes, court decisions, or later rulings may have changed the analysis. Treat this page as historical context, not current tax advice. Verify current law before relying on any specific rule, rate, or position mentioned here.
Disclaimer: This is an official Ruling of the Connecticut Department of Revenue Services (DRS), typically issued to a specific taxpayer in response to that taxpayer's request and based on the specific facts presented and the Connecticut tax law in effect when it was issued. DRS may later declare a Ruling obsolete or supersede it by a subsequent Ruling, Policy Statement, or Announcement, so a taxpayer with different facts should not assume it still applies; the taxation of television, satellite, and telecommunications services has changed over time, so confirm the current law. Taxpayer-identifying details are redacted. Connecticut imposes its sales and use tax solely at the state level: there are no local or municipal sales taxes. This summary is informational only and is not legal or tax advice. Consult a licensed Connecticut tax professional about your specific situation.
About this page: The plain-English summary, reader guidance, and Q&A below were written by Ezel based on the official state tax ruling. The original ruling (linked on this page as a PDF) is the authoritative source for any reliance.
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Plain-English summary

A company transmitted video programming directly to consumers by microwave or satellite, and customers received the signal through descrambling equipment. It asked whether this is a "community antenna television service" (CATV service) under Conn. Gen. Stat. § 12-407(27) — a category Connecticut taxes.

DRS said yes. The statute's definition of CATV service includes a "noncable communications service" (Conn. Gen. Stat. § 16-1), which in turn means a "telecommunications service" (Conn. Gen. Stat. § 16-247a) that is not "cable service" under the federal Cable Communications Policy Act of 1984. A microwave/satellite transmission of video is a telecommunications service (transmission by electromagnetic means, including microwave and satellite), so the only question was whether it counts as federal-law "cable service."

It's not "cable service" — because there's no cable system. Read in isolation, the federal definition of "cable service" (one-way transmission of video programming to subscribers) could seem to fit. But — applying noscitur a sociis (a term's meaning is shaped by its neighbors) — "cable service" is tied to a "cable operator" providing service over a "cable system": "a set of closed transmission paths." Microwave and satellite delivery is not a closed transmission medium, so it is not federal "cable service." (Congress knew about satellite and other non-cable competitors when it drew that line.)

Result: because the service is a noncable communications service that is not cable service, it is a "community antenna television service" under § 12-407(27). CATV service is a taxable enumerated service in Connecticut, so this microwave/satellite video service is taxed the same as cable.

What this means for you

Delivery technology doesn't get you out of the CATV-service tax

Connecticut's CATV-service category is written to sweep in non-cable ways of delivering video (microwave, satellite) precisely because they fall outside the federal "cable service" definition. Choosing a wireless delivery method doesn't avoid the tax — it's what puts the service in the "noncable communications service" branch of § 12-407(27).

"Cable service" is defined by the closed cable system, not just the content

The federal line between cable and non-cable turns on whether there is a cable system of closed transmission paths and a cable operator, not merely on transmitting video to subscribers. That structural test is why satellite/microwave delivery lands on the non-cable side.

Verify the current rules for video and telecom services

Television, satellite, streaming, and telecommunications taxation has evolved substantially since 1991. Use this ruling for its reasoning, but confirm how a given video-delivery service is treated under today's statutes.

Common questions

Q: Is satellite or microwave delivery of TV programming taxable in Connecticut under this ruling?
A: Yes. DRS classified it as a "community antenna television service" under Conn. Gen. Stat. § 12-407(27), a taxable enumerated service.

Q: Why isn't it "cable service"?
A: Because "cable service" is provided by a cable operator over a cable system of closed transmission paths. Microwave and satellite are not a closed transmission medium, so the service is a "noncable communications service" instead.

Q: What is a "noncable communications service"?
A: Under Conn. Gen. Stat. § 16-1, it is a telecommunications service (as defined in § 16-247a) that is not "cable service" under the federal Cable Communications Policy Act of 1984.

Q: Does the customer's descrambling equipment change the analysis?
A: No. The classification turns on how the programming is transmitted (microwave/satellite, not a closed cable system), not on the customer's receiving equipment.

Citations and references

Statutes:

  • Conn. Gen. Stat. § 12-407(27) (community antenna television service; includes noncable communications service)
  • Conn. Gen. Stat. § 16-1 (noncable communications service); § 16-247a(5) (telecommunications service)
  • Cable Communications Policy Act of 1984, Pub. L. No. 98-549; 47 U.S.C. § 522(4)-(6) (cable service, cable operator, cable system)

Case law (as cited by the ruling):

  • State v. Roque, 190 Conn. 143, 460 A.2d 26 (1983) (noscitur a sociis)

Source

Original ruling text

Ruling 91-25, Sales and Use Taxes / Community Antenna Television Service

Ruling 91-25

Sales and Use Taxes

Community Antenna Television Service

This Ruling has been cited by   Ruling 95-6

FACTS:

A company is engaged in the business of transmitting video programming by means of microwave or satellite to customers. The company's customers receive its video programming signal through the use of descrambling equipment.

ISSUE:

Whether the service of providing video programming directly to consumers by means of microwave or satellite is a community antenna television service, as defined in Conn. Gen. Stat. §12-407(27).

DISCUSSION:

Conn. Gen. Stat. §12-407(27) provides in part that "'community antenna television service' means ... (2) noncable communications service, as defined in section 16-1."

Conn. Gen. Stat. §16-1 provides in part that "'noncable communications service' means any telecommunications service, as defined in section 16-247a, and which is not included in the definition of 'cable service' in the Cable Communications Policy Act of 1984, P.L. 98-549."

Conn. Gen. Stat. §16-247a(5) provides in part that "'telecommunications service' means any transmission (A) between or among points specified by the user, (B) of information of the user's choosing, © without change in the form or content of the information as sent and received, (D) by means of electromagnetic transmission, including but not limited to, fiber optics, microwave and satellite, (E) with or without benefit of any closed transmission medium and (F) including all instrumentalities, facilities, apparatus and services ...."

"Cable service", as defined in the Cable Communications Policy Act of 1984, Pub. L. No. 98-549, 98 Stat. 2779, 2780, §2 [adding §602 to the Communications Act of 1934 and codified and hereinafter referred to as 47 U.S.C. §522(5)], "means (A) the one-way transmission to subscribers of (i) video programming, or (ii) other programming service, and (B) subscriber interaction, if any, which is required for the selection of such video programming or other programming service.

While "cable service", as so defined, could appear to encompass the service of providing video programming directly to consumers by means of microwave or satellite, its meaning may best be determined by reference to its relationship with other associated definitions. "'Assistance in ascertaining the legislative intent is afforded by resort to the familiar maxim of noscitur a sociis. Through use of this aid the meaning of a word or a particular set of words in a statute may be indicated, controlled or made clear by the words with which it is associated, in a manner somewhat similar in application to the more familiar doctrine of in pari materia. 2A Sutherland, Statutory Construction, (4th ed. 1973) §47.16 at 101.' Falcone v. Branker, 135 N.J. Super. 137, 146-47, 342 A.2d 875 (1975)." State v. Roque , 190 Conn. 143, 152, 460 A.2d 26 (1983).

The associated definitions of "cable operator", "cable system" and "other programming service" make it clear that "cable service" is provided by a "cable operator" by means of a "cable system". Significantly, "the term 'cable operator' means any person ... who provides cable service over a cable system ..."; 47 U.S.C. §522(4); and "the term 'cable system' means a facility, consisting of a set of closed transmission paths and associated signal generation, reception, and control equipment that is designed to provide cable service ..."; 47 U.S.C. §522(6). (The legislative history of Pub. L. No. 98-549 indicates that Congress, while establishing "a national policy that clarifies the current system of local, state and Federal regulation of cable television"; H.R. Rep. No. 934, 98th Cong., 2nd Sess. 19, reprinted in 1984 U.S. Code Cong. & Ad. News 4655, 4656; was well aware of "new forms of competition to cable ... [including] the SMATV industry, multi-channel MDS, Direct Broadcast Satellite ...;" H.R. Rep. No. 934, 98th Cong., 2nd Sess. 22, reprinted in 1984 U.S. Code Cong. & Ad. News 4655, 4659.)

RULING:

The service of providing video programming directly to consumers by means of microwave or satellite is a community antenna television service, as defined in Conn. Gen. Stat. §12-407(27).

LEGAL DIVISION

August 29, 1991

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