Arkansas Writers' Project, Inc. v. Ragland
95 L. Ed. 2d 209, 1987 U.S. LEXIS 1815, 481 U.S. 221 (1987)
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Rule of Law:
A state sales tax scheme that discriminates among publications by taxing some based on their content while exempting others violates the First Amendment's guarantee of freedom of the press unless the state can show the tax is necessary to serve a compelling interest and is narrowly tailored to achieve that end.
Facts:
- Since 1935, the state of Arkansas has imposed a general sales tax on tangible personal property.
- Arkansas's tax law provided specific exemptions for the sale of newspapers and for 'religious, professional, trade and sports journals and/or publications' sold through regular subscriptions.
- Arkansas Writers' Project, Inc. published 'Arkansas Times,' a monthly general interest magazine that covered a wide variety of subjects and did not fall into any of the exempt categories.
- Following an audit in 1980, the Arkansas Commissioner of Revenue determined that sales of 'Arkansas Times' were subject to the state sales tax.
- Arkansas Writers' Project began paying the tax in 1982, ultimately paying $15,838.22 for the period in question.
Procedural Posture:
- The Arkansas Commissioner of Revenue denied a refund claim filed by Arkansas Writers’ Project, Inc.
- Arkansas Writers' Project filed a complaint in the Chancery Court for Pulaski County, Arkansas, seeking review of the Commissioner's decision.
- The Chancery Court granted summary judgment for Arkansas Writers' Project on state statutory grounds, finding the magazine was exempt from the tax.
- The Commissioner of Revenue appealed to the Arkansas Supreme Court, the state's highest court.
- The Arkansas Supreme Court reversed the trial court, holding that 'Arkansas Times' did not qualify for the exemption.
- On rehearing, the Arkansas Supreme Court addressed and rejected the First Amendment claims raised by Arkansas Writers' Project.
- Arkansas Writers’ Project, Inc., as appellant, appealed the decision of the Arkansas Supreme Court to the Supreme Court of the United States.
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Issue:
Does an Arkansas sales tax scheme that taxes general interest magazines, but exempts newspapers and magazines dedicated to specific subjects like religion, sports, or trade, violate the First Amendment's guarantee of freedom of the press?
Opinions:
Majority - Justice Marshall
Yes, the Arkansas sales tax scheme violates the First Amendment. A tax that discriminates against certain members of the press based on the content of their publications is subject to strict scrutiny and is unconstitutional unless it is narrowly tailored to serve a compelling state interest. The Arkansas tax is a content-based regulation because a publication's tax status depends entirely on its subject matter, forcing state officials to examine the content of a publication to determine taxability. This is repugnant to the First Amendment. The state's proffered interests—raising revenue and encouraging 'fledgling' publishers—are not compelling, and the tax scheme is not narrowly tailored to achieve them, as it is both overinclusive and underinclusive. This selective taxation poses a danger of abuse by the state, as established in Minneapolis Star & Tribune Co. v. Minnesota Comm’r of Revenue.
Dissenting - Justice Scalia
No, the Arkansas sales tax scheme does not violate the First Amendment. The denial of a tax exemption is a form of subsidy, not a penalty or regulation of speech, and a legislature's decision not to subsidize a fundamental right is not subject to strict scrutiny. The tax exemption has a rational basis, such as encouraging small publishers and administrative efficiency, which is sufficient to sustain it against an equal protection challenge. Unlike a direct prohibition, the denial of a subsidy does not have a significant coercive effect. Applying strict scrutiny in this context threatens a wide variety of legitimate and common government subsidy programs that differentiate based on subject matter, such as postal rates for non-profits or funding for the arts, thereby introducing arbitrary judicial discretion into First Amendment law.
Concurring - Justice Stevens
Yes, the state's tax scheme is unconstitutional. I agree with the judgment of the Court because the state has the burden of justifying its content-based discrimination and has plainly failed to do so. However, I do not join the portion of the majority's opinion that relies on the broad proposition that government has absolutely no power to ever restrict expression based on its content, as I believe there are some circumstances where content-based distinctions are permissible.
Analysis:
This decision significantly strengthens First Amendment protections against discriminatory taxation of the press. It extends the principle from Minneapolis Star by clarifying that content-based discrimination within the press is subject to the same strict scrutiny as taxes that single out the press as a whole. The ruling establishes that any tax law requiring government officials to examine a publication's content to determine its tax liability is presumptively unconstitutional. This makes it exceptionally difficult for states to create tax preferences for certain types of publications (e.g., religious or scientific journals) over others (e.g., general interest or political magazines), thus promoting content neutrality in fiscal policy affecting the media.
