Document: 499 U.S. 439 111 S.Ct. 1438 113 L.Ed.2d 494 Timothy J. LEATHERS, Commissioner of Revenues Arkansas, Petitioner,v.Daniel L. MEDLOCK et al. Daniel MEDLOCK, al., Petitioners, v. Revenues, Nos. 90-29, 90-38. Argued Jan. 9, 1991. Decided April 16, Syllabus Arkansas' Gross Receipts Act imposes a tax on receipts from the sale all tangible personal property and specified services, but expressly exempts, inter alia, certain newspaper magazine sales. In 1987, 188 amended to impose cable television. Petitioners in No. 90-38, television subscriber, operator, trade organization (cable petitioners), brought this class action State Chancery Court, contending that their expressive rights under First Amendment Equal Protection Clause Fourteenth were violated by extension exemption newspapers magazines, exclusion list services subject scrambled satellite broadcast home dish-antennae owners. 1989, shortly after Court upheld constitutionality 188, Arkansas adopted 769, which extended to, among other things, paying customers. On appeal, Supreme held was not invalid passage 769 because Constitution does prohibit differential taxation different media. However, believing discriminatory members same medium, "substantially same," unconstitutional for period during it applied services. Held: 1. its generally applicable sales alone, or while exempting print media, violate Amendment. Pp. 444-453. (a) Although television, provides news, information, entertainment subscribers, is engaged "speech" part "press" much operation, fact taxed differently media itself raise concerns. The presents none difficulties have led strike down speakers. See, e.g., Grosjean American Press Co., 297 233, 56 444, 80 L.Ed. 660; Minneapolis Star & Tribune Co. Minnesota Comm'r Revenue, 460 575, 103 1365, 75 295; Writers' Project, Inc. Ragland, 481 221, 107 1722, 95 209. It general applicability covering broad range and, thus, single out press thereby threaten hinder as watchdog government activity. Furthermore, there no indication has targeted purposeful attempt interfere with activities, nor structured so suspicion intended do so. selected small group speakers bear fully burden tax, since, even if Court's finding are medium accepted, uniformly approximately 100 systems then operating State. Finally, content based, since nothing statute's language refers mass communications, record contains evidence variety programming offers subscribers differs systematically message communicated programming, newspapers, magazines. 444-449. (b) Thus, petitioners can prevail only scheme "an additional basis" concluding rights. See Writers', supra, at S.Ct., 1729. This decisions support argument such basis exists here discriminates discriminated time within medium. Taken together, cases Regan Taxation Representation Wash., 461 540, 1997, 76 129, Mabee White Plains Publishing 327 178, 66 511, 90 607, Oklahoma Walling, 186, 494, 614, establish speakers, press, implicate unless directed at, danger suppressing, particular ideas. Nothing about choice exclude exempt ever suggested an interest censoring activities Nor anything indicate broad-based, content-neutral likely stifle free exchange 449-453. 2. question whether temporary distinction between must be addressed remand. P. 453. 301 Ark. 483, 785 S.W.2d 202 (1990), affirmed part, reversed remanded. O'CONNOR, J., delivered opinion REHNQUIST, C.J., WHITE, STEVENS, SCALIA, KENNEDY, SOUTER, JJ., joined. MARSHALL, filed dissenting opinion, BLACKMUN, joined, post, p. ----. William E. Keadle, Little Rock, Ark., James C. Pledger, Arkansas. Eugene G. Sayre, Medlock, Justice O'CONNOR Court. 1 These consolidated require us consider state excludes exempts segments others. 2 * 4% Ark.Code Ann. §§ 26-52-301, 26-52-302 (1987 Supp.1989). goods § 26-52-401 (Supp.1989). Counties 1% Act, 26-74-307, 26-74-222 Supp.1989), cities may further 1/2 these items, 26-75-307 (1987). 3 subscription over-the-counter 26-52-401(4), (14) (Supp.1989); Revenue Policy Statement 1988-1 (Mar. 10, 1988), reprinted CCH Ark.Tax Rep. ¶ 69-415. Before did those either television1 owners.2 26-52-301 1987 Ark.Gen.Acts, 4 Community Communications Cable Television Association, Inc., composed operators throughout challenge contended protected comparable They argued salestax ation constitutional 5 granted petitioners' motion preliminary injunction, requiring place escrow challenged taxes keep records identifying collections taxes. Both sides introduced extensive testimony documentary hearing subsequent trial. Following trial, concluded television's necessary use public rights-of-way distinguishes purposes therefore dissolved ordered funds collected released. 6 issued decision, "all distribution video radio without wires provided customers users." 1989 appeal again State's ground that, notwithstanding continued unconstitutionally discriminate against rejected claim holding Medlock 487, 202, 204 (1990). court believed, however, prohibits before it, found owners same." Ibid. conclusion justified treatment, explaining already paid franchise fees right. Id., 485, S.W.2d, 203. tax. 487; 204. 7 petitioned certiorari. We petitions certiorari, Pledger 498 809, 41, 42, 112 18 order resolve question, left open 1729, 209 (1987), prevents imposing II 8 entertainment. Amendment, is, "press." Los Angeles Preferred Communications, 476 488, 106 2034, 2037, 480 (1986). That itself, Our constitutionally suspect circumstances. 9 660 (1936), considered Louisiana law singled publications weekly circulations above 20,000 2% gross advertising. fell exclusively 13 newspapers. Four daily 120 less than taxed. discussed length pre-First English tradition imposed press. invidious form censorship curtail circulation prevent people acquiring knowledge activities. 246-251, 447-451. issue type unconstitutional. 250, 449. 10 295 (1983), we noted unclear result depended our perception case had intent penalize structure sufficient invalidate it. U.S., 580, 1369 (citing commentary). resolved any doubts direct improper censorial motive required grounds: "Illicit legislative sine qua non violation Amendment." 592, 1376. 11 At special cost paper ink consumed production publications. exempted first $100,000 worth annually. Eleven publishers, producing 14 388 incurred liability year operation. (Star Tribune) responsible roughly two-thirds total revenue raised following year, 16 374 papers, Again, bore tax's burden. impermissible apart itself. 12 nevertheless two reasons. First, treatment. burdensome helps ensure will met widespread opposition. When applies constituency, insulated political constraint. id., 585, 1371. Given "the basic assumption system often serve important restraint government," feared threat exclusive could operate "as effectively censor check critical comment." "Differential then, places interests Amendment," presumptively Beyond singling newspapers—those large they remained despite thus resembled penalty Once again, appeared potential abuse Amendment: "[W]hen selects narrowly defined full begins resemble more few largest favor struggling smaller enterprises." 1375. reaffirmed rule selective through narrow targeting individual offends case, Project sought refund Times, magazine, 1941. Exempt religious, professional, sports 224-226, 1725-1726. exemption, meant "a magazines pay tax," operated way suffered discrimination identified case. 229, 1727. Moreover, differentiated entirely content. demonstrate when threatens suppress expression ideas viewpoints. Absent compelling justification, exercise taxing power Grosjean, 244-249, 446-449; Star, plays unique role abuse, limited raises concerns information opinion. A also targets 1365; fear reasons obvious, trigger heightened scrutiny taxpayer speech. 229-231, 1727-1729. 15 types discrimination. applicability. specific exemptions. Among natural gas, electricity, water, ice, steam utility services; telephone, telecommunications, telegraph service; furnishing rooms hotels, apartment lodging houses, tourist camps; alteration, addition, cleaning, refinishing, replacement, repair printing kinds; tickets admission amusement athletic, entertainment, recreational events; privilege having access of, amusement, facilities. Cf. said repeatedly Jimmy Swaggart Min- istries Board Equalization Cal., 493 378, 387-388, 110 688, ---, 796 (1990); 1727; 586, n. 1372-1373, 9. one Unlike involved 17 structurally dissimilar Writers'. few" 4, 1727, 4. maintained Times publication periodicals responded "[w]hether three one, clearly falls publishers." contrast, App. Pet. Cert. 12a. While seven available Tr. (Aug. 19, 1987), until became effective, hardly resembles "penalty few." 1375; number censorship; runs risk affecting views. similar content-based regulation: distort market "The right . remove governmental restraints arena discussion, putting decision what views shall voiced largely into hands each belief approach would comport premise dignity upon rests." Cohen California, 403 15, 24, 91 1780, 1787-1788, 29 284 (1971). There offering wide change conclusion. Even accept finding, remains affected suppliers 19 based. statute communications. establishes mixture evidence, contended, material 20 Because past, argue here: regarding intermedia intramedia discrimination, absence speech effect ideas, violates rule. 21 129 stands proposition provisions Internal Code contributions lobbying organizations. One section conferred tax-exempt status nonprofit organizations engage Contributions deductible. Another lobby, them Taxpayers contributing veterans' were, permitted deduct regardless organizations' 22 546-551, 2001-2004. explained legislature subsidize deduction.3 546, 2001. For proposition, relied Cammarano United States, 358 498, 79 524, 462 (1959). Cammarano, regulation denied deduction money spent businesses publicity programs pending legislation. who spending person business advocating. "plainly ' "aimed suppression dangerous ideas." " 513, 533, quoting Speiser Randall, 357 519, 78 1332, 1338, 1460 (1958). 23 Regan, presented Congress chosen organizations, contributions. analysis. Inherent taxation. "Legislatures especially latitude creating classifications distinctions statutes." 547, 2002. Madden Kentucky, 309 83, 87-88, 60 406, 407-408, 84 590 (1940); New York Rapid Transit Corp. City York, 303 573, 578, 58 721, 724, 82 1024 (1938); Magoun Illinois Trust Savings Bank, 170 283, 294, 594, 598, 42 1037 (1898). 24 established need become simply some reiterated context strong presumption duly enacted schemes. doing, quoted announced 40 years earlier Madden, equal protection case: 25 'The discretion classification possessed field long been recognized. [T]he served underscore wisdom recognition area needed formulating sound policies. Traditionally device fitting local needs usages achieve equitable has, this, pointed taxation, fields, legislatures possess greatest freedom classification. Since necessarily enjoy familiarity conditions cannot have, overcome most explicit demonstration hostile oppressive persons classes.' 408 (footnotes omitted), 547-548, 26 "hostile discrimination." "[t]he invidiously subsidies aim 548, 2002 (internal quotation marks omitted). But reference involved; ideas; effect. Under circumstances, selection preference "obviously matter policy discretion." 549, 27 insufficient evident well 607 (1946), 614 (1946). Those involve burdens Fair Labor Standards 1938, 52 Stat. 1060, amended, U.S.C. 201 seq., businesses, requirements papers. 213(a)(8). Publishers larger placed 194, 'deliberate calculated device' Mabee, 184, 514, 28 here. Legislature conclude 21a. both claims, holdings reach disallowed grounds. leave address 30 foregoing reasons, judgment remanded proceedings inconsistent 31 ordered. whom BLACKMUN joins, dissenting. 32 recognized using whole. (1936); (1983); Framers explained, specifically disparate impair untrammeled dissemination information. certiorari obligation medium—cable television—more heavily majority's answer question—that otherwise like-situated too "small" number—is all, fails explain actors entitled Indeed, majority adamantly proclaims irrelevance problem analysis calls treat even-handedly survives today's decision. I believe unwisely cut back principles inform selective-taxation precedents, heavier borne dissent. 33 A. 34 nondiscrimination principle principle, "differential characteristic unconstitutional," struck "unless asserts counterbalancing importance taxation." 1372. 35 instance government's institution. As purpose Free "was preserve vital source information." Reviewing historical abuses associated England's infamous 'taxes knowledge' debates surrounding ratification Constitution, see 246-250, 447-449; 583-586, nn. 6-7, 1370-1372, viewed distinctively potent "means abridging press," 7, 1372, 7. 36 previously contexts. nonmedia enterprises. used item component good sold retail. 581-582, 1368, 1369-1370. Second, non-discrimination unequally. alternative publishers disproportionate 591-592, 1375-1376. Similarly, exemptions rendered application remaining "because [the tax] [was] evenly magazines." 1727 (emphasis added); supra (tax meet threshold widely circulated newspapers). 37 today, invalidated schemes namely, "treat[ed] favorably others," 1728, leaving favorable treatment furnished invalidating scheme, 1729-30. squarely distinct companies broadcasters advertising revenues.1 my view, animate condemn B 38 transmits distinctive means, service differ significantly broadcasters, stations. core function "communication traditional enterprises book pamphleteers," 2038, (1986), "[c]able now share significant amount editorial include," FCC Midwest Video Corp., 440 689, 707, 99 1435, 1445, 59 692 (1979). ante, 444 (acknowledging "part 'press' "). cable-service providers put unrebutted proof trial designed show consumers regard sports, features interchangeable electronic 81-85, 100-101, 108, 115, 133-137, 165-170. Competition, Rate Deregulation Commission's Policies Relating Provision Service, Record 4962, 4967 (1990) (discussing competition forms television). 39 competes market, triggers central concern underlying principle: covert censorship. protects prophylactically, condemning "potential abuse" State, 1375-76 added), independent actual "evidence motive," 228, 1376 ("Illicit Amendment"). risk. By disadvantage relative another, likes punish dislikes. Inflicting competitive disfavored "command impede flow Associated 326 1, 20, 65 1416, 1424-25, 89 2013 (1945). distorts marketplace costs competitors. 241, 244-245, 445, 446-47 (noting arising based circulation). Differential across likewise "limit[s] entitled," 449, where, here, relevant compete market. social radio, consumer preferences formats, impairs widest possible diverse antagonistic sources." 1424-1425. 41 selectively underlie bears demonstrating treatment" "special characteristic" "counterbalancing State] 1372 (footnote failed make showing found, pursuant correspond peculiar cable-television service, 203 indeed, fee defray cable's exploitation way. ibid. justification stations raising revenue. Brief Respondents sufficiently unconstitutionality principle. 231-232, 1728-1729; 1372-73.2 undisturbed regime. According majority, realistic abuse. dismisses notion evenhandedly. Neither conclusions supportable. 43 exposed "large." Ante, where enterprises, speakers," 448, circumstances "resembles ideas," points out, 448. "[i]n contrast," "uniformly systems" operation added). overly simplistic unresponsive precedents. 44 To start, meaningful guidance scope From infer problems hundred "large" pinpoint magic accomplished impunity. Would 50 providers? Or 25? suggestion penalty" helpful. test turns "penalizes" presupposes baseline establishing medium's entitlement equality never develops theory equally, except say avoid discriminating actors. 45 focus absolute numbers reflect "small versus large" State," poses "risk views," unfounded. furnishes ample (testimony operator he "certain religious programming" "people demand it"); 138 Spanish-language network); 150 city council meetings). reason like duplicated extent makes harder 500 stations, Gale Directory Publications Broadcast Media 67-68 (123d ed. 1991), "distort ideas" manner akin "content-based regulation." 448.3 46 mistakenly assesses impact comprised statewide fact, communities serviced operator. Directory, 69-91. given locale, actor, calculus. 47 important, ignores inherent identity. So disproportionately "large," higher taxes, character wishes confer advantage 48 facts highlight identities. litigation began, generated media—including sales, fees, revenues, scrambled-satellite fees—were from, included in, 84-1903, 84-1904(f), (j), (1947 Supp.1985); 224-225, Effective July expanded base include fees. 16a. suit, protesting television—cable's closest rival—in particular. extending 484, Of course, know, legislature's initial prompted plea emerging industry. If indeed respond importunings, surely disapproved new 49 noted, precedents find Clause; enough abuse," 1375 present may, will, various sectors flinch prospect Purporting draw With Washington, (1983)—a dealing tax-deductibility expenditures—the embraces 450 "[T]he taxation," insists, "[i]nherent tax." 451. 51 Read worth, propositions essentially annihilate least differentials stand anything, "power tax" discriminate" involved. regime singles implicates "directed 453 content-neutral, might power. 1375-76. minimum, incorrectly conflates (or subsidization) generally. holds invariably Speech subsidizes according criteria. power, exercised appropriate restraint, inheres legitimate authority tap energy activity promote welfare. Buckley Valeo, 424 90-97, 96 612, 668-672, 659 (1976). 53 posture. guarantee preferred position over "protec[t] [members press] Tribe, Constitutional Law 12-20, 963 (2d 1988). Selective precisely that. light Framers' "to information," 449; recognize disrupting integrity Stewart explained: 54 essence, structural provision Constitution. Most Bill Rights protect liberties individuals: speech, worship, counsel, compulsory self-incrimination, name few. extends institution." Stewart, "Or Press," Hastings L.J. 631, 633 (1975) original). 55 forces institution, fail desire revenue, evenhandedness. Clearly, true interfering process citizens' formats evolve.4 Today's discards teachings. receive signals antennae located so-called "headends." Information gathered way, transmit, conducted cables strung poles underground conduits subscribers. D. Brenner, M. Price, Meyerson, Other Nonbroadcast Video: 1.03 (1989). Satellite transmit over-the-air "scrambled" directly dishes view signals. Easton S. Easton, Complete Sourcebook Home TV 57-66 (1988). Certain amici distinguishable complaining should deductible, complain exempt. difference. "[b]oth deductibility subsidy administered system." 544, 2000. Subject exemptions, 26-52-302, 26-52-301(3)(D)(i) Proceeds 26-52-401(4) (Supp.1989), subscription, 26-52-401(14) Tax 69-415, exempted, proceeds publications, 26-52-401(13) Insofar 204-205 involves straightforward resolving operators' prior affirm pre-1989 version what, any, justify advanced enhancement. dispute characteristics regulatory 496, 2038-39, (1986) (BLACKMUN, concurring); cf. Red Lion Broadcasting FCC, 395 367, 386-401, 1794, 1804-1812, 371 (1969). absent clear nexus importance." happen apply neutrally viewpoints expressed still problems. "It answers person's objection restriction his another person, outside control, speak him." 553, 2005, (1983) concurring). reliance misplaced. primarily 1938 (FLSA). upholding provision, promoted placing papers "on parity town enterprises" FLSA. 514; Press, 498. distinguished unlike FLSA Minnesota's derive benefit businesses. 1375, 16. derives general, unrelated rather simple officials supported survive scrutiny. States O'Brien, 391 377, 88 1673, 1679, 672 (1968).

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