Source: https://casetext.com/case/arkansas-writers-project-inc-v-ragland
Timestamp: 2020-01-22 03:48:22
Document Index: 220080277

Matched Legal Cases: ['§ 1983', '§ 4', '§ 84', '§ 84', '§ 84', '§ 84', '§ 84', '§ 4', '§ 2', '§ 1983', '§ 84', '§ 1983', '§ 1983', '§ 1988', '§ 1983', '§ 1983', '§ 1341', '§ 623', '§ 76', '§ 76', '§ 396']

Arkansas Writers' Project, Inc. v. Ragland, 481 U.S. 221 | Casetext
Arkansas Writers' Project, Inc.v.Ragland
U.S.Apr 22, 1987
Emmis Pub. v. Dept. of State Revenue
The Supreme Court has not placed precise parameters on the number of taxpayers required to constitute a…
Dept. of Revenue v. Magazine Publishers
However, "a discriminatory tax on the press burdens rights protected by the First Amendment." Arkansas…
holding that regulations fail narrow-tailoring analysis when they are both overinclusive and underinclusive
holding a state sales tax scheme unconstitutional that taxed general-interest magazines, but exempted newspapers and religious, professional, trade, and sports magazines
Argued January 20, 1987 Decided April 22, 1987
Arkansas imposes a tax on receipts from sales of tangible personal property, but exempts numerous items, including newspapers and "religious, professional, trade, and sports journals and/or publications printed and published within this State" (magazine exemption). Appellant publishes in Arkansas a general interest magazine that includes articles on a variety of subjects, including religion and sports. In 1984, relying on Minneapolis Star Tribune Co. v. Minnesota Comm'r of Revenue, 460 U.S. 575, appellant sought a refund of sales tax it had paid since 1982, asserting that the magazine exemption must be construed to include its magazine, and that subjecting its magazine to the sales tax, while sales of newspapers and other magazines were exempt, violated the First and Fourteenth Amendments. After appellee denied the refund claim, appellant sought review in State Chancery Court, stating an additional claim under 42 U.S.C. § 1983 and 1988 for injunctive relief and attorney's fees. That court granted appellant summary judgment, construing the magazine exemption to include appellant because its magazine was published and printed in Arkansas. The Arkansas Supreme Court reversed, holding that the magazine exemption applies only to religious, professional, trade, or sports periodicals. The court rejected the claim that the exemption granted to other publications discriminated against appellant, ruling that success on this claim would avail appellant nothing since it would still be subject to tax even if the exemption fell. The court also refused to find that appellant's First and Fourteenth Amendment rights had been violated, ruling that the sales tax was a permissible "ordinary form of taxation" to which publishers are not immune. Accordingly, the court did not consider appellant's attorney's fees claim.
Briefs of amici curiae urging reversal were filed for the American Civil Liberties Union Foundation et al. by Jack Novik and Philip E. Kaplan; for the City Regional Magazine Association by Donald M. Middlebrooks; for the Magazine Publishers Association by David Minton; for the Miami Herald Publishing Co. et al. by Edward Soto, Gerald B. Cope, Jr., W. Terry Maguire, and Parker Thomson; for Time Inc., by E. Barrett Prettyman, Jr., David J. Saylor, and John G. Roberts, Jr.; and for the Times Mirror Co. et al. by Rex S. Heinke, William A. Niese, and Jeffrey S. Klein.
Since 1935, Arkansas has imposed a tax on receipts from sales of tangible personal property. 1935 Ark. Gen. Acts 233, § 4, pp. 593, 594, now codified at Ark. Stat. Ann. § 84-1903(a) (1980 and Supp. 1985). The rate of tax is currently four percent of gross receipts. § 84-1903 (three percent); Ark. Stat. Ann. § 84-1903.1 (Supp. 1985) (additional one percent). Numerous items are exempt from the state sales tax, however. These include "[g]ross receipts or gross proceeds derived from the sale of newspapers," § 84-1904(f) (newspaper exemption), and "religious, professional, trade and sports journals and/or publications printed and published within this State . . . when sold through regular subscriptions." § 84-1904(j) (magazine exemption).
The newspaper exemption was added in 1941. 1941 Ark. Gen. Acts 386, § 4, p. 1060. Gross Receipts Tax Regulations of 1981, adopted by the Arkansas Commissioner of Revenue define a newspaper as "a publication in sheet form containing reports of current events and articles of general interest to the public, published regularly in short intervals such as daily, weekly, or bi-weekly, and intended for general circulation." GR-48(A)(1), reproduced at Record 50.
The magazine exemption was added in 1949. 1949 Ark. Gen. Acts 152, § 2, p. 491. The regulations define a publication as "any pamphlet, magazine, journal, or periodical, other than a newspaper, designed for the information or entertainment of the general public or any segment thereof." GR-48(A)(5), reproduced at Record 50. The term "regular subscription" is defined as "the purchase by advance payment of a specified number of issues of a publication over a certain period of time, and delivered to the subscriber by mail or otherwise." GR-48(A)(6), reproduced at Record 50.
Subsequently, in Minneapolis Star Tribune Co. v. Minnesota Comm'r of Revenue, 460 U.S. 575 (1983), this Court held unconstitutional a Minnesota tax on paper and ink used in the production of newspapers. In January 1984, relying on this authority, appellant sought a refund of sales tax paid since October 1982, asserting that the magazine exemption must be construed to include Arkansas Times. It maintained that subjecting Arkansas Times to the sales tax, while sales of newspapers and other magazines were exempt, violated the First and Fourteenth Amendments. The Commissioner denied appellant's claim for refund. App. to Juris. Statement 12-14.
Having exhausted available administrative remedies, appellant filed a complaint in the Chancery Court for Pulaski County, Arkansas, seeking review of the Commissioner's decision. The compliant also stated a claim under 42 U.S.C. § 1983 and 1988 for injunctive relief and attorney's fees. The parties stipulated that Arkansas Times is not a "newspaper" or a "religious, professional, trade or sports journal" and that, during the relevant time period, appellant had paid $15,838.22 in sales tax. The Chancery Court granted appellant summary judgment, construing § 84-1904(j) to create two categories of tax-exempt magazines sold through subscriptions, one for religious, professional, trade, and sports journals, and one for publications published and printed within the State of Arkansas. No. 84-1268 (Pulaski Cty. Chancery Ct., Mar. 29, 1985). Because Arkansas Times came within the second category, the court held that the magazine was exempt from sales tax and appellant was entitled to a refund. The court determined that resolution of the dispute on statutory grounds made it unnecessary to address the constitutional issues raised in appellant's § 1983 claim.
As a threshold matter, the Commissioner argues that appellant does not have standing to challenge the Arkansas sales tax scheme. Extending the reasoning of the court below, he contends that, since appellant has conceded that Arkansas Times is neither a newspaper nor a religious, professional, trade, or sports journal, it has not asserted an injury that can be redressed by a favorable decision of this Court and therefore does not meet the requirements for standing set forth in Valley Forge Christian College v. Americans United for Separation of Church State, Inc., 454 U.S. 464, 472 (1982).
Our cases clearly establish that a discriminatory tax on the press burdens rights protected by the First Amendment. See Minneapolis Star, 460 U.S., at 591-592; Grosjean v. American Press Co., supra, at 244-245. In Minneapolis Star, the discrimination took two distinct forms. First, in contrast to generally applicable economic regulations to which the press can legitimately be subject, the Minnesota use tax treated the press differently from other enterprises. 460 U.S., at 581 (the tax "singl[es] out publications for treatment that is . . . unique in Minnesota tax law"). Second, the tax targeted a small group of newspapers. This was due to the fact that the first $100,000 of paper and ink were exempt from the tax; thus "only a handful of publishers pay any tax at all, and even fewer pay any significant amount of tax." Id., at 591.
Appellant's First Amendment claims are obviously intertwined with interests arising under the Equal Protection Clause. See Police Dept. of Chicago v. Mosley, 408 U.S. 92, 94-95 (1972). However, since Arkansas' sales tax system directly implicates freedom of the press, we analyze it primarily in First Amendment terms. See Minneapolis Star Tribune Co. v. Minnesota Comm'r of Revenue, 460 U.S. 575, 585, n. 7 (1983).
On the facts of this case, the fundamental question is not whether the tax singles out the press as a whole, but whether it targets a small group within the press. While we indicated in Minneapolis Star that a genuinely nondiscriminatory tax on the receipts of newspapers would be constitutionally permissible, 460 U.S., at 586, and n. 9, the Arkansas sales tax cannot be characterized as nondiscriminatory, because it is not evenly applied to all magazines. To the contrary, the magazine exemption means that only a few Arkansas magazines pay any sales tax; in that respect, it operates in much the same way as did the $100,000 exemption to the Minnesota use tax. Because the Arkansas sales tax scheme treats some magazines less favorably than others, it suffers from the second type of discrimination identified in Minneapolis Star.
Indeed, this case involves a more disturbing use of selective taxation than Minneapolis Star, because the basis on which Arkansas differentiates between magazines is particularly repugnant to First Amendment principles: a magazine's tax status depends entirely on its content. "[A]bove all else, the First Amendment means that government has no power to restrict expression because of its message, its ideas, its subject matter, or its content." Police Dept. of Chicago v. Mosley, 408 U.S., at 95. See also Carey v. Brown, 447 U.S., at 462-463. "Regulations which permit the Government to discriminate on the basis of the content of the message cannot be tolerated under the First Amendment." Regan v. Time, Inc., 468 U.S. 641, 648-649 (1984).
Arkansas faces a heavy burden in attempting to defend its content-based approach to taxation of magazines. In order to justify such differential taxation, the State must show that its regulation is necessary to serve a compelling state interest and is narrowly drawn to achieve that end. See Minneapolis Star, 460 U.S., at 591-592.
Appellant argues that the Arkansas tax scheme violates the First Amendment because it exempts all newspapers from the tax, but only some magazines. Appellant contends that, under applicable state regulations, see nn. 1 and 2, supra, the critical distinction between newspapers and magazines is not format, but rather content: newspapers are distinguished from magazines because they contain reports of current events and articles of general interest. Just as content-based distinctions between magazines are impermissible under prior decisions of this Court, appellant claims that content-based distinctions between different members of the media are also impermissible, absent a compelling justification.
In the Chancery Court, appellant asserted its First and Fourteenth Amendment claims under 42 U.S.C. § 1983, as well as a corresponding entitlement to attorney's fees under § 1988. Because this Court has found a constitutional violation, appellant urges us to consider its cause of action under § 1983 and order an award of attorney's fees. However, the state courts have not yet indicated whether they will exercise jurisdiction over this claim and we therefore remand to give them an opportunity to do so.
The parties recognize that federal and state courts have concurrent jurisdiction over actions brought under § 1983, see, e. g., Martinez v. California, 444 U.S. 277, 283, n. 7 (1980), although the Tax Injunction Act, 28 U.S.C. § 1341, ordinarily precludes federal courts from entertaining challenges to the assessment of state taxes. The parties disagree, however, on whether the state court must exercise jurisdiction in such cases. We leave it to the courts on remand to consider the necessity of entertaining this claim.
Whether state courts must assume jurisdiction over these cases is not entirely clear. See Note, Section 1983 in State Court: A Remedy for Unconstitutional State Taxation, 95 Yale L. J. 414, 420-421 (1985). See also Spencer v. South Carolina Tax Comm'n, 281 S.C. 492, 316 S.E.2d 386, aff'd by an equally divided Court, 471 U.S. 82 (1984). Of course, an affirmance by an equally divided Court is not entitled to precedential weight. See Neil v. Biggers, 409 U.S. 188, 192 (1972).
We stated in Minneapolis Star that "[a] tax that singles out the press, or that targets individual publications within the press, places a heavy burden on the State to justify its action." 460 U.S., at 592-593. In this case, Arkansas has failed to meet this heavy burden. It has advanced no compelling justification for selective, content-based taxation of certain magazines, and the tax is therefore invalid under the First Amendment. Accordingly, we reverse the judgment of the Arkansas Supreme Court and remand for proceedings not inconsistent with this opinion.
To the extent that the Court's opinion relies on the proposition that "`government has no power to restrict expression because of its message, its ideas, its subject matter, or its content,'" see ante, at 229 (quoting Police Dept. of Chicago v. Mosley, 408 U.S. 92, 95 (1972)), I am unable to join it. I do, however, agree that the State has the burden of justifying its content-based discrimination and has plainly failed to do so. Accordingly, I join Parts I, II, III-B, IV, and V of the Court's opinion and concur in its judgment.
See my separate opinions in Consolidated Edison Co. v. Public Service Comm'n of New York, 447 U.S. 530, 544 (1980); Widmar v. Vincent, 454 U.S. 263, 277 (1981); and Regan v. Time, Inc., 468 U.S. 641, 692 (1984); see also FCC v. League of Women Voters of California, 468 U.S. 364, 408 (1984).
Here, as in the Court's earlier decision in Minneapolis Star Tribune Co. v. Minnesota Comm'r of Revenue, 460 U.S. 575 (1983), application of the "strict scrutiny" test rests upon the premise that for First Amendment purposes denial of exemption from taxation is equivalent to regulation. That premise is demonstrably erroneous and cannot be consistently applied. Our opinions have long recognized — in First Amendment contexts as elsewhere — the reality that tax exemptions, credits, and deductions are "a form of subsidy that is administered through the tax system," and the general rule that "a legislature's decision not to subsidize the exercise of a fundamental right does not infringe the right, and thus is not subject to strict scrutiny." Regan v. Taxation With Representation of Washington, 461 U.S. 540, 544, 549 (1983) (upholding denial of tax exemption for organization engaged in lobbying even though veterans' organizations received exemption regardless of lobbying activities). See also Cammarano v. United States, 358 U.S. 498, 513 (1959) (deduction for lobbying activities); Buckley v. Valeo, 424 U.S. 1, 93-95 (1976) (declining to apply strict scrutiny to campaign finance law that excludes certain candidates); Harris v. McRae, 448 U.S. 297, 324-326 (1980) (declining to apply strict scrutiny to legislative decision not to subsidize abortions even though other medical procedures were subsidized); Maher v. Roe, 432 U.S. 464 (1977) (same).
By seeking to do so, the majority casts doubt upon a wide variety of tax preferences and subsidies that draw distinctions based upon subject matter. The United States Postal Service, for example, grants a special bulk rate to written material disseminated by certain nonprofit organizations — religious, educational, scientific, philanthropic, agricultural, labor, veterans', and fraternal organizations. See Domestic Mail Manual § 623 (1985). Must this preference be justified by a "compelling governmental need" because a nonprofit organization devoted to some other purpose — dissemination of information about boxing, for example — does not receive the special rate? The Kennedy Center, which is subsidized by the Federal Government in the amount of up to $23 million per year, see 20 U.S.C. § 76n(a), is authorized by statute to "present classical and contemporary music, opera, drama, dance, and poetry." § 76j. Is this subsidy subject to strict scrutiny because other kinds of expressive activity, such as learned lectures and political speeches, are excluded? Are government research grant programs or the funding activities of the Corporation for Public Broadcasting, see 47 U.S.C. § 396(g)(2), subject to strict scrutiny because they provide money for the study or exposition of some subjects but not others?