Direct TV and Dish Network, the companies that filed the lawsuit in early 2010, said Massachusetts violated the US Constitution by discriminating against them for being out-of-state companies. They said the state Legislature passed the tax to hurt them and support the cable industry, which has more employees and pays more taxes to the state.

The Supreme Judicial Court ruled Wednesday that the 5 percent tax attached to customers’ monthly bills didn’t unfairly disadvantage satellite companies compared to cable TV providers.

The court rejected that argument, however, because it said cable and satellite TV providers were regulated so differently as to be incomparable.


It wasn’t immediately clear how the tax affected the business of satellite companies, who called it “a heavy thumb on the scale” in their submission to the top court. Both cable and satellite providers have struggled with dropping subscriber numbers in recent years as so-called “cable cutters” have ended their subscriptions in favor of online video services such as Netflix and Hulu. Over a 16-month period, the Massachusetts tax cost satellite TV customers $17 million, the companies said.

By comparison, franchise fees paid by cable television providers amounted to $60 million in 2010, according to court documents. Those fees are distributed to Massachusetts cities and towns.

The plantiffs did not immediately respond to requests for comment.

Paul Cianelli, the president of the New England Cable and Telecommunications Association, called the decision “fair and just.” Cianelli, whose group filed a brief in support of the tax, said it equalized the burden between cable companies and satellite companies.

Jack Newsham can be reached at jack.newsham@globe.com. Follow him on Twitter @TheNewsHam.