The First Amendment generally inhibits taxes or financial restrictions that target or disfavor the media, as such restrictions are subject to heightened constitutional scrutiny.1

, >https://constitution.congress.gov/browse/essay/amdt1-7-3-1/ALDE_00013695/;

Laws Making Speaker-Based Distinctions in Regulating Speech

, >https://constitution.congress.gov/browse/essay/amdt1-7-3-5/ALDE_00013699/. Similarly, government may not impose a tax as a prior restraint upon the exercise of a constitutional right itself, such as a license tax on the distribution of religious literature.2 However, the Court’s jurisprudence seems to permit general taxes upon receipts of publishers and other businesses engaged in communicating protected expression.3

The Supreme Court has invalidated taxes that single out media organizations for payment. In Grosjean v. American Press Co., the Court voided a state two-percent tax on the gross receipts of advertising in periodicals with a circulation exceeding 20,000 copies a week.4 The tax at issue was not a general tax but instead focused exclusively upon newspapers, and the Court determined that the tax seemed “to be a deliberate and calculated device . . . to limit the circulation of information to which the public is entitled.” 5 The Court concluded that the tax had the “plain purpose of penalizing the publishers and curtailing the circulation of a selected group of newspapers.” 6

In Minneapolis Star and Tribune Co. v. Minnesota Commissioner of Revenue, the Court invalidated a Minnesota use tax on the cost of paper and ink products used to produce publications.7 The court first distinguished the tax in Minneapolis Star from the tax in Grosjean, interpreting Grosjean as suggesting that the state legislature’s intention to censor publishers may have been significant in the Court’s decision to strike down the tax.8 By contrast, the Court found “no indication, apart from the structure of the tax itself, of any impermissible or censorial motive on the part of the [Minnesota] legislature.” 9

Despite the lack of improper motive, the Court struck down Minnesota’s tax because of its facial discrimination, holding that the state had not met the “heavy burden” of justifying its different treatment of the press.10 In analyzing the tax’s First Amendment impact, the Court explained that a targeted tax creates greater concern than a generally applicable tax because there are fewer political constraints to singling out a specific group, as opposed to the broader coalition that might oppose taxes of general applicability.11 Accordingly, the power to tax differentially provided the government with a “powerful weapon” against the press.12 The Court further concluded that such differential treatment, unless justified by some special characteristic of the press, suggests that the goal of the regulation is not unrelated to suppression of expression.13 The state’s asserted interest in raising revenue could not justify the tax’s special treatment of the press, because the government could achieve this interest with a general tax that avoided “the censorial threat” of this differential tax.14

Also subject to heightened scrutiny is taxation that targets specific subgroups within a segment of the press for differential treatment. In Minneapolis Star, the Court said the tax also violated the First Amendment because it targeted “a small group of newspapers.” 15 To look at another example, an Arkansas sales tax exemption for “religious, professional, trade, and sports journals” published within the state was struck down as an invalid content-based regulation of the press.16 The Court held that the measure was not narrowly tailored to allegedly “compelling” state interests in raising revenue, encouraging fledgling publishers, and fostering communications.17 However, the Court left open whether a distinction in state sales tax between different types of media—specifically, an exception for newspapers—would likewise be unconstitutional.18

The Court confronted this question only a few years later. In Leathers v. Medlock, the Court upheld a state tax that discriminated among different types of media on a content-neutral basis, proclaiming that “differential taxation of speakers, even members of the press, does not implicate the First Amendment unless the tax is directed at, or presents the danger of suppressing, particular ideas.” 19 The tax at issue, a sales tax of general applicability, exempted newspaper and magazine sales, but not sales for other forms of media.20 The Court held that although the tax only applied to some types of media, unlike the Minnesota and Arkansas taxes ruled unconstitutional in earlier cases, the state had “not selected a narrow group to bear fully the burden of the tax.” 21 Thus, a generally applicable tax may face a lower constitutional barrier than a tax levied specifically on media, even if the generally applicable tax does not apply to all types of media. The Court reiterated that differential taxation will raise constitutional concerns when such taxes “threaten[] to suppress the expression of particular ideas or viewpoints,” “single[] out the press,” “target[] a small group of speakers,” or “discriminate[] on the basis of the content of taxpayer speech,” as elucidated in the cases discussed above.22

As discussed elsewhere, laws that target speech based on the content of the speech may violate the First Amendment whether they target the media or not.23

, >https://constitution.congress.gov/browse/essay/amdt1-7-3-3/ALDE_00013697. The Arkansas exemption from Arkansas Writers’ Project violated this principle by taxing magazines based on their content.24 This general principle also motivated the Court’s invalidation of a New York state law requiring that an accused or convicted criminal’s income from publications describing their crime be placed in an escrow account and then distributed to the crime’s victims.25 The Court observed that this law placed a financial burden on income derived from specific expressive activity and therefore disincentivized the publication of certain books based on their content.26 The Court therefore applied heightened scrutiny to the New York law, under which it found that the law was not narrowly tailored.27

Footnotes

1

See Leathers v. Medlock, 499 U.S. 439, 447 (1991) (explaining that the government must have a “compelling justification . . . to single out the press,” and laws will be constitutionally suspect if they target small groups of speakers or discriminate on the basis of speech’s content). See generally

Overview of Content-Based and Content-Neutral Regulation of Speech

, >https://constitution.congress.gov/browse/essay/amdt1-7-3-1/ALDE_00013695/;

Laws Making Speaker-Based Distinctions in Regulating Speech

, >https://constitution.congress.gov/browse/essay/amdt1-7-3-5/ALDE_00013699/.

2

Murdock v. Pennsylvania, 319 U.S. 105 (1943) (ruling license tax operating as a prior restraint on distribution of religious material unconstitutional); Follett v. McCormick, 321 U.S. 573 (1944) (same). For further discussion of these cases, see

Laws Neutral to Religious Practice during the 1940s and 1950s

, >https://constitution.congress.gov/browse/essay/amdt1-4-3-1/ALDE_00013223/.

3

See Cammarano v. United States, 358 U.S. 498, 512–13 (1959) (holding that disallowing business tax deductions for lobbying expenses did not violate First Amendment); Medlock, 499 U.S. at 447 (holding that sales tax of general applicability that exempted print media did not violate First Amendment).

4

297 U.S. 233, 250 (1936).

5

Id.

6

Id. at 251. The Court emphasized that “the form” of the tax was “itself suspicious” : it was not tied to the volume of advertisements, for example, but to the extent of the newspapers’ circulation. Id.

7

460 U.S. 575, 592–93 (1983).

8

Id. at 580 (citing Grosjean, 297 U.S. at 250).

9

Id.

10

Id. at 592–93.

11

Id. at 585.

12

Id.

13

Id.

14

Id. at 586.

15

Id. at 591.

16

Ark. Writers’ Project, Inc. v. Ragland, 481 U.S. 221 (1987).

17

Id. at 231–32.

18

Id. at 233.

19

499 U.S. 439, 453 (1991).

20

Id. at 442.

21

Id. at 448 (emphasis added). As opposed to the scheme in Arkansas Writers’ Project, under which “only ‘a few’ Arkansas magazines paid . . . sales tax,” the law in Medlock “extended Arkansas’ sales tax uniformly to the approximately 100 cable systems then operating in the State.” Id. (quoting Arkansas Writers’ Project, 481 U.S. at 229). The Court similarly distinguished the tax at issue in Minneapolis Star, which fell on only a few publishers. Id. at 445. Accordingly, because the law in Medlock taxed “a large number of cable operators offering a wide variety of programming throughout the State,” it did not “resemble[] a penalty for particular speakers or particular ideas.” Id. at 449.

22

Id. at 447 (collecting cases).

23

See

Laws Making Facial Content-Based Distinctions Regarding Speech

, >https://constitution.congress.gov/browse/essay/amdt1-7-3-3/ALDE_00013697.

24

Arkansas Writers’ Project, 481 U.S. at 229.

25

Simon & Schuster, Inc. v. Members of N.Y. State Crime Victims Bd., 502 U.S. 105 (1991).

26

Id. at 116.

27

Id. at 121–22.