The Supreme Court yesterday agreed to resolve a dispute over the power of states to tax cable television companies and subscribers.

The court will review a ruling allowing Arkansas to tax cable TV only if it also imposes the levy on similar communication services, such as the unscrambling of satellite signals.

A 1987 Arkansas law imposed a sales tax on cable TV service but did not apply it to newspaper and magazine subscriptions, nor to those who own satellite dishes and subscribe to services that unscramble satellite signals.

The Arkansas Supreme Court ruled the tax unlawfully discriminated against cable TV service and ordered officials to refund to cable operators and subscribers more than $8 million in taxes paid. State officials, seeking to avoid the refunds, asked the U.S. Supreme Court to overrule the state court decision.

Separately, the court rejected an appeal by insurance industry lawyers who said the Federal Reserve Board policy of allowing federally regulated banks to sell insurance could lead banks into the same "morass that has befallen the savings and loan industry."

In other matters, the court:

Agreed to use a dispute over the settlement of a strike by Continental Air Lines pilots to set new guidelines on the duties of unions to represent their members.

The court said it will consider a request to dismiss a lawsuit against the Air Line Pilots Association by striking pilots who said the union denied them fair representation. The Bush administration joined the pilots association in urging the justices to hear arguments in the case.

Agreed to decide whether savings and loan associations and other financial institutions may claim tax deductions for "reciprocal sales" of mortgage loans.

The thrifts in the case were taking advantage of a federal rule allowing reciprocal sales of depreciated mortgage loans without having to record a loss for accounting purposes. The rule allowed savings institutions to engage in transactions to generate losses for federal tax purposes without worrying about failing to meet federal reserve and cash-on-hand requirements.

With a reported $419 million plus interest at stake, the court said it will hear Internal Revenue Service arguments against allowing such deductions. Two federal appeals courts have ruled against the IRS and one has ruled for the tax agency. The justices' decision, expected by July, will resolve the conflicting rulings. An IRS victory would mean more bad news for some struggling S&Ls.

Refused to hear an appeal by 77 major national corporations challenging the validity of a Washington state tax on manufacturing and sales. Their lawsuit charged that the tax discriminated in favor of businesses that manufactured and sold goods within the state and against those engaged in interstate commerce.

Let stand the federal conviction for perjury and obstruction of justice of Lisa Jones, a former trader's assistant at Drexel Burnham Lambert Inc. She was convicted for lying to a grand jury looking into allegedly illegal trading involving Drexel.

Let stand a ruling that threw out former baseball major leaguer Jim Bouton's $1 million damage award over a Wrigley subsidiary's bubble gum product that resembles chewing tobacco.