Minneapolis Star & Tribune Co. v. Minnesota Commissioner of Revenue
460 U.S. 575 (1983)
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Rule of Law:
A state tax that singles out the press for differential treatment or targets a small group of publications is presumptively unconstitutional under the First Amendment and can only be justified by a compelling government interest that cannot be achieved by less discriminatory means.
Facts:
- Since 1967, Minnesota imposed a general sales tax on most goods but exempted periodic publications.
- In 1971, the Minnesota legislature enacted a "use tax" on the cost of paper and ink products consumed in the production of publications.
- Publications were the only enterprise in Minnesota taxed on the purchase of components that would be used to create a product for retail sale.
- In 1974, the legislature amended the tax to exempt the first $100,000 worth of ink and paper consumed by a publication in any calendar year.
- As a result of the $100,000 exemption, only a small number of publishers (11 in 1974, 13 in 1975) out of several hundred in the state were liable for the tax.
- Minneapolis Star & Tribune Co. (Star Tribune) was one of the few publishers that had to pay the tax.
- In 1974 and 1975, Star Tribune's tax payments accounted for roughly two-thirds of the total revenue collected from the ink and paper tax.
Procedural Posture:
- Minneapolis Star & Tribune Co. filed suit in a Minnesota state court against the Commissioner of Revenue, seeking a refund for use taxes paid between 1974 and 1975.
- The company argued that the tax on ink and paper violated the First and Fourteenth Amendments.
- The Minnesota Supreme Court, as the state's highest court, upheld the tax against the constitutional challenge.
- Minneapolis Star & Tribune Co., as the appellant, appealed the decision to the U.S. Supreme Court, which granted review.
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Issue:
Does a state use tax that applies only to the cost of paper and ink consumed in producing publications, and includes an exemption that effectively limits the tax's application to a small number of newspapers, violate the freedom of the press guaranteed by the First Amendment?
Opinions:
Majority - Justice O'Connor
Yes. A tax that singles out the press or targets a small group of newspapers violates the First Amendment unless the state asserts a compelling interest that cannot be achieved by a less restrictive, generally applicable tax. Minnesota's use tax is unconstitutional because it both singles out the press for special treatment and, through its exemption, targets only a few of the largest newspapers. The state's asserted interest in raising revenue is not compelling because it could be achieved by subjecting newspapers to the general sales tax applicable to other businesses. The court rejected the argument that it should compare the economic burden of the use tax to a hypothetical sales tax, stating that the very existence of differential treatment creates a threat of censorship, as the tax could be used to penalize the press. Furthermore, the $100,000 exemption, which causes the tax to fall on only a few publications, functions less like a general revenue measure and more like a penalty against large newspapers, presenting a potential for abuse that the First Amendment does not tolerate.
Dissenting - Justice Rehnquist
No. The Minnesota tax scheme does not violate the First Amendment because it does not "abridge" the freedom of the press; in fact, it imposes a significantly lighter financial burden on newspapers than would a generally applicable sales tax. Calculations show that the Star Tribune paid millions of dollars less under the use tax than it would have under the state's general sales tax, meaning the differential treatment benefited, rather than burdened, the press. The Court's creation of a "differential treatment" standard for triggering strict scrutiny is unprecedented; such review is only warranted when a right is significantly burdened. Moreover, the state has a rational basis for the special treatment, as collecting sales tax on high-volume, low-price newspaper sales from vending machines and newsstands would be impractical. The $100,000 exemption is a rational legislative choice to create an equitable tax system and functions as a tax credit that benefits all publications.
Concurring-in-part-and-dissenting-in-part - Justice White
Yes. The Minnesota tax violates the First Amendment, but the majority's reasoning is overly broad. The tax is unconstitutional for the narrow reason that the $100,000 exemption limits the tax's burden to only a few newspapers, which is sufficient to invalidate the law. The Court should not have reached the broader question of whether any differential tax on the press is unconstitutional. The majority's claim that courts are "poorly equipped" to evaluate the relative burdens of different taxes is incorrect and contradicted by numerous precedents where the Court has performed such analysis in other constitutional contexts. In this case, it is evident that the use tax was less burdensome than a sales tax, so the First Amendment should not forbid a state from choosing that method on that basis alone; the targeting of a few newspapers is the sole constitutional flaw.
Analysis:
This decision establishes a strong presumption of unconstitutionality for any tax that specifically targets the press. It significantly limits the government's ability to create special tax schemes for media organizations, even if those schemes are not facially punitive or content-based. The ruling emphasizes that the danger lies not just in the current burden of a tax, but in the potential for a discriminatory tax structure to be used as a tool for censorship or intimidation. By requiring a compelling state interest for such differential treatment, the Court applied a strict scrutiny-like standard, creating a high barrier for any law that singles out the press from the general business community.
