Editorial: Taxing cable boxes a short-sighted state money grab

It seems the governor isn’t the only one trying to squeeze additional consumption tax dollars out of its beleaguered residents.

And of all places, cable TV subscriptions, already a sore subject with most Massachusetts consumers.

On the heels of Comcast’s recent roughly $30 increase in its already pricey monthly bill, the Department of Revenue wants to piggy-back on that by exacting a sales tax on rentals of cable converted boxes.

Indeed, many of those cable boxes could soon be subjected to the state’s 6.25% sales tax, under a proposal the DOR put out for comment last week.

Some background explains the status quo, and why the state wants to upend it.

A few months before the discontinuation of analog television in 2009, which forced viewers to acquire cable TV packages or digital converter boxes to accommodate the new digital signal, the DOR 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 items “consumed or used directly and exclusively … in the operation of commercial … television transmission.”

However, cable’s technology has evolved since then. The DOR has since clarified that the tax exemption for cable converter boxes, set-top boxes and cable system terminal devices was “only for the purpose of receiving programming or information from the cable provider, or for implementing parental controls.”

And now a working draft directive put out by the DOR for comments 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 with 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 instructs.

The DOR will take comments on the draft until the close of business on March 21. 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.

The cable companies themselves might be even more outraged than their customers over this turn of events.

Consumers have cut the cable cord in record numbers, opting for Internet-powered streaming services instead.

This tax will only push more people to follow suit, leaving the elderly and those less tech savvy to pay the price of a prying state bureaucracy.

Between now and March 21, consumers should flood that comments website and let the DOR know in no uncertain terms that they already pay more than enough for cable TV without tacking on a state tariff.

If you can afford insurance, you can’t afford to be without it

Though few in numbers, some Massachusetts taxpayers without health insurance will pay more for that decision in increased state penalties.

Individuals and married couples who can afford but opt not to buy health insurance coverage in 2025 will pay a tax penalty ranging from $300 to $2,244, depending on their individual or household income, state Department of Revenue Commissioner Geoffrey Snyder stated in a memo.

That’s a slight increase from the previous tax cycle, when the penalty ranged from $388 to $2,100 a year.

An individual tax filer with income between $22,590 and $30,120 could be subject to a penalty of $25 a month, or $300 a year, DOR said.

Individuals with incomes below $22,590 are exempt from the requirement.

In 2006, Gov. Mitt Romney signed a law mandating health insurance coverage in Massachusetts, and established an insurance exchange to expedite the process. The law became the template for the federal Affordable Care Act, known as Obamacare.

Massachusetts law, like Obamacare, set a penalty for refusing to buy insurance. However, the Tax Cuts and Jobs Act of 2017 eliminated the federal tax penalty, leaving only Massachusetts and a handful of other states with that sanction.

More than 98.3% of working-age adults in Massachusetts are insured, according to the latest data from the state Center for Health Policy and Analysis.

Individuals without the financial ability to buy health insurance enjoy both federal and state protections.

The federal Emergency Medical Treatment and Active Labor Act requires anyone using a hospital emergency department to be stabilized and treated, regardless of their insurance status or ability to pay.

The state Health Safety Net pays for certain medically necessary services provided to qualified low-income patients at Massachusetts community health centers (CHCs) and acute care hospitals.

However, those wealthy enough to purchase insurance may pay a higher price than the state penalty for not doing so.

Massachusetts hospitals can directly bill patients without insurance, since they’re responsible for the full cost of their care.

That can run into the tens and hundreds of thousands of dollars.

By contrast, that health-insurance premium represents a small price to pay for the peace of mind it buys.