Taxation.—Disclaiming any intimation “that the owners of newspapers are immune from any of the ordinary forms of taxation for support of the government,” the Court voided a state two-percent tax on the gross receipts of advertising in newspapers with a circulation exceeding 20,000 copies a week.892 In the Court’s view, the tax was analogous to the Eighteenth Century English practice of imposing advertising and stamp taxes on newspapers for the express purpose of pricing the opposition penny press beyond the means of the mass of the population.893 The tax at issue focused exclusively upon newspapers, it imposed a serious burden on the distribution of news to the public, and it appeared to be a discriminatorily selective tax aimed almost solely at the opposition to the state administration.894 Combined with the standard that government may not impose a tax directly upon the exercise of a constitutional right itself,895 these tests seem to permit general business taxes upon receipts of businesses engaged in communicating protected expression without raising any First Amendment issues.896

Ordinarily, a tax singling out the press for differential treatment is highly suspect, and creates a heavy burden of justification on the state. This is so, the Court explained in 1983, because such “a powerful weapon” to single out a small group carries with it a lessened political constraint than do those measures affecting a broader based constituency, and because “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.”897 The state’s interest in raising revenue is not sufficient justification for differential treatment of the press. Moreover, the Court refused to adopt a rule permitting analysis of the “effective burden” imposed by a differential tax; even if the current effective tax burden could be measured and upheld, the threat of increasing the burden on the press might have “censorial effects,” and “courts as institutions are poorly equipped to evaluate with precision the relative burdens of various methods of taxation.”898

892 Grosjean v. American Press Co., 297 U.S. 233, 250 (1936).

893 297 U.S. at 245-48.

894 297 U.S. at 250-51. Grosjean was distinguished on this latter basis in Minneapolis Star & Tribune Co. v. Minnesota Comm'r of Revenue, 460 U.S. 575 (1983).

895 Murdock v. Pennsylvania, 319 U.S. 105 (1943); Follett v. McCormick, 321 U.S. 573 (1944) (license taxes upon Jehovah’s Witnesses selling religious literature invalid).

896 Cf. City of Corona v. Corona Daily Independent, 115 Cal. App. 2d 382, 252 P.2d 56 (1953), cert. denied, 346 U.S. 833 (1953) (Justices Black and Douglas dissenting). And see Cammarano v. United States, 358 U.S. 498 (1959) (no First Amendment violation to deny business expense tax deduction for expenses incurred in lobbying about measure affecting one’s business); Leathers v. Medlock, 499 U.S. 439 (1991) (no First Amendment violation in applying general gross receipts tax to cable television services while exempting other communications media).

897 Minneapolis Star & Tribune Co. v. Minnesota Comm'r of Revenue, 460 U.S. 575, 585 (1983) (invalidating a Minnesota use tax on the cost of paper and ink products used in a publication, and exempting the first $100,000 of such costs each calendar year; Star & Tribune paid roughly two-thirds of all revenues the state raised by the tax). The Court seemed less concerned, however, when the affected group within the press was not so small, upholding application of a gross receipts tax to cable television services even though other segments of the communications media were exempted. Leathers v. Medlock, 499 U.S. 439 (1991).

Also difficult to justify is taxation that targets specific subgroups within a segment of the press for differential treatment. An Arkansas sales tax exemption for newspapers and for “religious, professional, trade, and sports journals” published within the state was struck down as an invalid content-based regulation of the press.899 Entirely as a result of content, some magazines were treated less favorably than others. The general interest in raising revenue was again rejected as a “compelling” justification for such treatment, and the measure was viewed as not narrowly tailored to achieve other asserted state interests in encouraging “fledgling” publishers and in fostering communications.

The Court seemed to change course somewhat in 1991, upholding a state tax that discriminated among different components of the communications media, and 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.”900

The general principle that government may not impose a financial burden based on the content of speech underlay the Court’s invalidation of New York’s “Son of Sam” law, which provided that a criminal’s income from publications describing his crime was to be placed in escrow and made available to victims of the crime.901 While the Court recognized a compelling state interest in ensuring that criminals do not profit from their crimes, and in compensating crime victims, the law was not narrowly tailored to those ends. It applied only to income derived from speech, not to income from other sources, and it was significantly overinclusive because it reached a wide range of literature (e.g., the Confessions of Saint Augustine and Thoreau’s Civil Disobedience) “that did not enable a criminal to profit from his crime while a victim remains uncompen-sated.”902

898 460 U.S. at 588, 589.

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

900 Leathers v. Medlock, 499 U.S. 439, 453 (1991) (tax applied to all cable television systems within the state, but not to other segments of the communications media).

901 Simon & Schuster v. New York Crime Victims Bd., 502 U.S. 105 (1991).

902 502 U.S. at 122.

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