Opinion ID: 1443329
Heading Depth: 1
Heading Rank: 2

Heading: unequal tax treatment of the print media violates the first amendment's freedom-of-speech guarantee

Text: The Taxpayer asserts the § 1357(C) exemption is discriminatory and hence unconstitutional when measured by the current standards of federal jurisprudence. The Taxpayer relies on two recent decisions by the U.S. Supreme Court  Minneapolis Star and Tribune Company v. Minnesota Commissioner of Revenue [10] and Arkansas Writers' Project, Inc. v. Ragland. [11] In Minneapolis Star the Court invalidated a discriminatory use tax levied on the cost of paper and ink products consumed by publishers in excess of $100,000.00. Although there was no indication of improper legislative motive, [12] the Court held the discrimination condemned there took two distinct forms  the use tax improperly treated the press differently from other enterprises and its levy targeted a small group of publications within the press. [13] Economic regulation of the press is, of course, permissible if the tax generally applies to all businesses, [14] but an exaction that either singles out the press or targets some but not all publishers or publications raises First Amendment concerns. [15] A heavy burden rests on the state to show a compelling governmental interest that cannot be achieved without differential taxation. [16] The state's stake in raising revenue, standing alone, will not justify special tax treatment of the press. [17] In Ragland the state sales tax scheme exempted all newspapers and certain other publications based on their content. The Court held the tax violated the First Amendment's freedom-of-speech guarantee because it treated some publications less favorably than others. In short, the tax suffered from the second form of discrimination condemned in Minneapolis Star. [18] Although not based on content, § 1357(C) targets only certain publications and hence violates the spirit, if not the letter, of both the First Amendment and the teachings of Ragland. The section is a narrowly targeted levy exemption in the sense that its provisions aim at taxing a specific class of publications which are singled out from the rest of the press. Here, publications which are sold for more than seventy-five cents or distributed by mail receive less favorable treatment than those marketed for less than seventy-five cents or delivered directly by carrier. The Commission argues that because the Ragland and Minneapolis Star scenarios differ from the present case, the rules announced in those opinions should not govern this assessment protest. We cannot accede to this view. Oklahoma's sales tax scheme is sufficiently similar to that condemned in Minneapolis Star, and particularly so in Ragland, to enjoin application of their teachings to the present case. Moreover, extant jurisprudence gives no indication that the two pronouncements invoked by the Taxpayer were intended to be rigidly confined within their specific scenarios. Rather, we find that the Court-announced constitutional standards are meant for broad and general application to the press. In sum, although there is here no hint of a legislative attempt at censoring the press, the appropriate standard for our constitutional review is strict scrutiny, not the rational basis test. [19] A heavy burden lies with the state to advance some compelling interest. Raising revenue alone is insufficient justification for selective exaction. Whenever the onus cannot be met, the differential tax treatment of the press must be held to offend the First Amendment's freedom-of-speech guarantee. In simpler terms, if the State fails to sustain its burden on this point, we must rule favorably for the Taxpayer.