Document: 358 U.S. 498 79 S.Ct. 524 3 L.Ed.2d 462 William B. CAMMARANO and Louise Cammarano, his wife, Petitioners,v.UNITED STATES of America. F. STRAUSS & SON, INC., Arkansas, Petitioner, v. COMMISSIONER OF INTERNAL REVENUE. Nos. 29 50. Argued Nov. 19, 1958. Decided Feb. 24, 1959. Frederick Bernays Wiener, Washington, D.C., for petitioners, Cammarano Cammarano. Oscar H. Davis, the United States. E. Chas. Eichenbaum, Little Rock, Ark., petitioner, Strauss son, inc. Mr. Justice HARLAN delivered opinion Court. 1 These cases, coming to us from two different Circuits, present identical issues, may appropriately be dealt with together in one opinion. The issues involve interpretation validity Treas. Reg. 111, § 29.23(o)—1 29.23(q)—1 as applied by courts below deny deduction 'ordinary necessary' business expenses under 23(a)(1)(A) Internal Revenue Code 19391 sums expended respective taxpayer petitioners furtherance publicity programs designed help secure defeat initiative measures then pending before voters States Washington Arkansas. 2 Treasury Regulations question each provides pertinent part that no shall allowed 'sums money lobbying purposes, promotion or legislation, exploitation propaganda, including advertising other than trade * *.'2 Both Courts Appeals held these provisions render nondeductible paid organizations which them extensive persuade cast their ballots against state measures, even though passage those would have seriously affected, indeed wholly destroyed, taxpayers' businesses—and so interpreted are a valid exercise Commissioner's rule-making power. We granted certiorari because recurring nature question, its importance proper administration laws. 355 952, 78 541, 529; 356 966, 1007, 1073. A brief review facts cases is necessary an understanding issues. 4 No. 29: In 1948 husband jointly owned one-fourth interest partnership engaged distribution beer at wholesale State Washington. was member Beer Wholesalers Association. December 1947 Association had established trust fund repository assessments collected members finance statewide program urging 'Initiative Legislature 13,' measure submitted electorate general election November 2, 1948, placed retail sale wine exclusively hands State. During petitioners' $3,545.15, pro rata share $886.29. total $53,500, turned over Industry Advisory Committee organized dealers, turn it contributions totaling $231,257.10 various kinds directed public, none referred wares such all urged Initiative 13.3 defeated. 5 preparing joint income tax return deducted expense $886.29 Association's assessment. disallowed Commissioner, protest additional sum thus due sued District Court refund. That court ruled payments made were 'expended legislation' within meaning therefore not deductible ordinary 1939. affirmed, holding Regulation applicable applied. 9 Cir., 246 F.2d 751.4 6 50: Petitioner Son, Inc., corporation liquor 1950 calling on prohibition ballot voted 7, 1950. May year Strauss, eight Arkansas wholesalers, Legal Control Associates, means coordinating efforts vote proposed measure. Between 30 30, 1950, Associates $126,265.84, disbursed forms concerning Act.5 Strauss' contribution amounted $9,252.67. 7 defeated election. On $9,252.67 expense. Commissioner filed timely petition Tax seeking redetermination deficiency asserted. upheld action disallowing claimed deduction, unanimously affirmed. 8 251 724. Since 1918 regulations promulgated continuously provided expenditures 'promotion legislation *,' any purposes specified 'corporate' now us, gross corporate income; since 1938 containing language forbidden deductions individual income.6 this period more 40 years regulatory been only occasion. Textile Mills Security Corporation Revenue, 314 326, 62 272, 86 L.Ed. 249, properly publicist legal experts employed certain properties country seized during World War I Trading With Enemy Act, 50 U.S.C.A. Appendix, et seq. This squarely based embodied Treas.Reg. 29.23(q) 1, found involved case, although very direction course made. Petitioners suggest dispositive either applicability upon disclosed records statute if they applicable. Essentially, contentions (1) cannot construed connection promote persuasion public opposed direct influence legislative bodies, 'lobbying'; (2) case inapplicable measures; (3) here presented invalid contrary plain terms 23(a) (1)(A) 1939 possibly unconstitutional First Amendment. 10 need long detained expenditures. First, we see justification reading into implied exceptions there find. accept argument should read limiting dealings legislators, insidious otherwise. whose propriety expenditures, characterized being 'matters publicity, 'including making arrangements speeches, contacting press, respect editorial comments, news items," preparation 'brochures' involving 'a comprehensive study history treatment persons property war,' 117 62, 65, 63, opinions public.7 Apart Mills, uniformly matters. See e.g., Revere Racing Ass'n Scanlon, 232 816; American Hardware Equipment Co. 202 126; Roberts Dairy 195 948; Sunset Scavenger 84 453. Petitioners' make but reference 'lobbying' pure surplusage. think must mean what say—that expenses, also spent 'the advertising' nondeductible.8 11 Likewise unpersuasive suggested distinction between incurred attempting legislatures furthering combatting initiatives plainly 'legislation' Regulations. Had passed people effect status laws every respect. Constitutions both explicitly recognize providing vesting power people.9 Every has considered fully referendums kind legislation. supra; Old Mission Portland Cement 69 676, affirmed 293 289, 55 158, 367; Mosby Hotel decided October 22, 1954, P—H 1954 TC Mem.Dec. 54,288; McClintock-Trunkey 19 T.C. 297, reversed 217 329 (involving payments, like 13'). 12 would, indeed, anomalous, campaigns representatives bills encompassed denied deductibility, whereas lessdiluted form influence, left large far concerned. reason give artificial strained construction language.10 13 cornerstone apply issue. It contended preserve destruction matter law, regulation purporting deductibility ipso facto invalid. rely Heininger, 320 467, 64 88 171, where attorney's fees mail-order dentist resisting postal fraud charge ended 14 do Heininger governs nor establishes broad rule law suggest. without enterprise inevitably suffer adverse effects, granting frustrate 'sharply defined national policies,' U.S., page 473, 253 (see Sullivan, 27, 512, 559), statute.11 Here sought prohibited themselves constitute expression sharply policy, further demonstration sections Code.12 15 As said words clear unambiguous application leave room interpretative regulation. numerous come issue bear witness that.' 338, 279. years' continuous duration expressly activities statute. underlie repeatedly re-enacted Congress slightest suggestion policy expressed does precisely conform intent.13 16 1934 Ninth Circuit referendum passed, increased taxpayer's business. supra.14 And 1936 same supra, Board hold through repeated re-enactment underlying already acquired force incorporated association garbage collectors injured membership. recognized twice previously similar illegal purpose,15 pointed out entirely disregarded, sound authority. Three later Congress, face decisions, again change section. 17 noteworthy Code, adopted provision substantive change,16 following consistent rulings subsequent desirability undesirability affecting Mills; supra. Although conclusively demonstrate administrative judicial transactions occurring befofe re-enactment, significant indicating satisfaction consistently given demonstrating prior intent. Cf. Stafoff, 260 477, 480, 43 197, 199, 67 358. 18 Under circumstances law. Government seeks cloak immunity examination conformity simply some failed affirmatively act gives otherwise Jones Liberty Glass Co., 332 524, 68 229, 92 142. Nor reliable inference Congress' intent can drawn conflict time re-enactment. Glenshaw 348 426, 431, 75 476, 99 483. language, early days federal existence time, many occasions electorate,17 when motive expenditure demonstrated. consider Massachusetts Mutual Life Ins. States, 288 269, 273, 53 337, 339, 77 739, applies here: 20 'This (of re-enacting statute) taken knowledge section official charged administration. If body erroneous, amended Its failure requires conclusion inconsistent (citations) unless, perhaps, clearly it. (citation).'18 21 heretofore hardly unambiguous, Securities say clearly, apparently, Trust Bingham 325 365, 65 1232, 89 1670. 22 statutory evidenced organizations, qualified exemption 'religious, charitable, scientific, literary educational purposes,' engage provide qualifying, substantial 'is carrying attempting, legislation,' individuals organizations. Act 1934, §§ 101(6), 23(o)(2), 48 Stat. 700, 690. thereafter, first permit corporations deduct qualifying limitation imposed. 1935, 102(c), 49 1016. limitations, carried Codes,19 explicit derived Judge Learned Hand 1930 'political agitation outside statute, however innocent aim *. Controversies sort conducted subvention; stands aside them.' Slee 42 184, 185, 72 A.L.R. 400. contested appear policy. 23 constitutional Amendment presented. They Speiser Randall, 357 513, 1332, 1460, California Wests' Ann.Rev. Tax.Code, 32 requiring taking loyalty oath condition struck down grounds procedural process. contention, neither petitioner below, merit. relevance us. constitutionally protected activities, required pay own pockets, everyone else engaging Code. Nondiscriminatory denial "aimed suppression dangerous ideas." 519, 1338. Rather, appears express determination purchased fate will affect, directly indirectly, community, community stand footing regards purchase 24 Affirmed. 25 DOUGLAS (concurring). 26 Valentine Chrestensen, 316 52, 54, 920, 921, 1262, advertisements commercial matters* did enjoy protection Amendment, Fourteenth. ruling casual, almost offhand. survived reflection. 'freedom speech press,' guaranteed encroachment Federal safeguarded Due Process Clause Fourteenth implication confined discourse particular nature. often stressed essential exposition exchange political ideas, philosophical attitudes, flowering letters. Important cultural ends, restricted them. Individual group protests results monetary injuries certainly beyond reach Thornhill Alabama, 310 88, 60 736, 1093, picketing ambit teaches. Newell Chauffeurs, Teamsters Helpers Local Union 795, 181 Kan. 898, 317 P.2d 817, 182 205, 319 reversed, 341, 779, 809. government affects occupies high place. profit difference, element inherent conception press our system free enterprise. Those who living rights less entitled advocacy hitched motive. much Follett Town McCormick, 321 573, 717, 938. find difficult draw line lines endeavor advertise means. Chief Hughes speaking Lovell City Griffin, 303 444, 452, 58 666. 669, 82 949, right deal broadest terms, 'The historic connotation comprehends publication affords vehicle information opinion.' Jamison Texas, 318 413, 416, 63 671, 87 869; Martin Struthers, Ohio, 141, 143, 862, 863, 1313; Burstyn, Inc. Wilson, 343 495, 501—502, 777, 780, 96 1098. 27 spite overtones impossible owners fighting lives opposing exercising rights. gone expenses' oppose placing penalty substance 1460. 'To claimants penalize speech.' Id., 518, however, here. undertaken taxpayers types advocacy; merely some, all, deductions. Deductions grace, right. 559. To item impetus view favored quarters exemptions. But proposition savors notion somehow realized unless subsidized Such runs counter decisions (Grosjean Press 297 233, 250, 56 449, 80 660; Murdock Commonwealth Pennsylvania, 105, 112, 870, 874, 1292; 578, 719), premise complete hands-off times People Ill. ex rel. McCollum Education School Dist. 71, Champaign County, Ill., 333 203, 461, 649. 28 addendum, concur (26 U.S.C. 23(a)(1)(A)) part: 23. income. computing net deductions: '(a) Expenses. '(1) Trade Business '(A) General. All taxable *.' 23(a)(1)(A). Only 29.23(o)—1, reads individuals, 29.23(q)—1, corporations, Because relevant respects discussed throughout one. typical advertisement Committee, signed 'Men Women Against Prohibition,' begins 'We intend Vote 13—because speakeasy, bootlegger, gangster—and, finally, state-wide Prohibition! urge friends neighbors likewise.' alternatively judgment favor trial finding show impaired partnership's distributor. 754. ground decision strongly defended Court, principles control considered. advertisement, ran daily weekly newspapers, shows sponsor 'Arkansas begins: 'What Does 'One Quart' Prohibition Really Mean? There's nothing anywhere it's novel unique. sinister plan destroy strictly-regulated alcohol beverage bootlegger.' Article 143 33 (1918 ed.) 'lobbying propaganda Art. 562 45 (1919 ed.), 1918. Thereafter change. (1920 69, Acts 1918, 1921, 1924, 1926, 262 74 77, 1928 1932, 23(o)—2 86, 23(q)—1 94 101, 1938, 19.23(q)—1, 39.23(q)—1 103, 118, respectively, 23(o)—1 thereafter 19.23(o)—1, 39.23(o)—1 Income prohibitions consolidated 1.162—15. fact Mondell services there. litigation 64), makes Mondell's activities. point Rumely, 345 41, 73 543, 97 770, Harriss, 347 612, 808, 98 989, term congressional resolution Lobbying 261—270, 261 270, representations communications advance cause, embrace 'lobbying.' Rumely 47, 546. Constitution 'Art. Sec. 1. Legislative Powers, Where Vested—The authority vested legislature, consisting senate house representatives, called legislature reserve propose bills, laws, enact reject polls, independent contains virtually provision. place heavy reliance acquiescence until 1958 1944 allowing expenditures—found qualify 23(a)(1), (A) Code—incurred self-operative amendment Missouri Constitution, 'no needed involved.' Smith 696. Whether rationally popularly enacted initiative, how distinction, compare isssues, 329, helps position connected initiatives—as deductible. modified amendments. 54,288. recently withdrawn decision. Rev.Rul. 58—255, 1958—1 Cum.Bull. 91. noted judging 'we benefit departmental defining word 470, 252. 533, post. Note 6, factors McDonald 323 57, 96, 68, contradicted statement 457. G. T. Wofford B.T.A. 1225; Los Angeles Salt Lake R. 168. Lucas Wofford, 1027, 'to legislation.' 1028. After Court's 'proper attempt prevent (business) injury' endeavoring Bellingrath 46 89, 92. U.S.C.(Supp. V) 162, 162. regarded break uniform chain decisions. 10, Helvering Winmill, 305 79, 83, 59 45, 46, 83 52: 'Treasury interpretations continued change, applying unamended substantially ree acted statutes, deemed received approval law.' 1939, (q)(2), 101(6); (Supp. 170(c)(2)(D), 501(c)(3), 501(c)(3). Two approved advertising. Fifth Avenue Coach New York, 221 31 709, 815, Stromberg California, 283 359, 51 532, 1117, extended Packer Utah, 285 52 76 643, problem raised. extent could regulated (cf. Cantwell Connecticut, 296, 900, 1213; Breard Alexandria, 341 622, 71 95 1233; Roth 354 1304, 1498) never authoritatively determined.

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