Circuit Court Upholds State Tax on Satellite TV. Counties are breathing a sigh of relief from the threat of Direct TV’s legal challenge to the Communications Services Tax (“CST”) on satellite television services sold to consumers in Florida. Yesterday, the circuit court for Leon County rejected Direct TV’s challenge to the State-imposed CST on satellite TV that is higher than the State CST on other communications services. Passed by the legislature in 2001, the CST consolidated 7 separate state and local taxes into a single, broad-based tax on all communications services. It consists of a state tax and a local option tax, which can be levied by cities and counties. Federal law prohibits local taxes on satellite TV. The 2001 CST imposed an additional State-wide tax on satellite TV, roughly equal to the average local option taxes, and allocated the additional revenues to cities and counties to make-up for the revenues not legally available to local governments from satellite TV due to the federal prohibition. Direct TV’s legal challenge questioned the constitutionality of the State tax on equal protection and commerce clause grounds. For cities and counties, which were not a party to the litigation, the stakes were high: Over $50 million in revenues annually, and over a half a billion dollars collected since the 2001 initiation of the CST. If the judge had ruled in favor of Direct TV, the delicate industry and stakeholder balance that is the aim of the CST would have been thrown off-kilter. The circuit court order granting summary judgment to the State is consistent with opinions in many other states that have rejected the Constitutional arguments raised by the satellite TV companies.