Can taxes be levied against the press? More specifically, does the government have the right to tax newspapers?
As explained to us by the folks at Cincinnati Tax Service, the answer is yes and no. Just as state governments have the right to tax many commercial products, they also retain the right to tax newspapers.
However, in spite of states retaining this right, the courts have struck down as unconstitutional attempts to levy taxes that focus exclusively on newspapers. The courts regard this provision of the First Amendment—freedom of the press—as violated when a tax is imposed on newspapers.
Additionally, the courts have invalidated laws that give preferential treatment to the press. They regard these laws as amounting to the regulation of newspaper content, powers they don’t want the government to be able to have.
Examples of Unconstitutional Taxes
Grosjean v. American Press Co.—the Court invalidated a state tax on newspaper advertising revenues.
Arkansas Writers’ Project v. Ragland— the Court struck down an Arkansas law exempting “religious, professional, trade and sports journals” from taxation. Though seeming like a good thing, the law effectively represented the regulation of newspaper content.
Leathers v. Medlock—the Supreme Court decided that states may regard different types of the media in different ways. For example, cable television may be taxed, but newspapers may not. “Differential taxation of speakers, even members of the press, does not implicate the First Amendment unless the tax is directed at, or presents the danger of suppressing, particular ideas,” the court found.
For more information about the First Amendment to the United States Constitution and taxation of the press, visit http://en.wikipedia.org/wiki/First_Amendment_to_the_United_States_Constitution#Taxation_of_the_press.
Other Issues Regarding Free Speech and Taxes
There have been other issues with regard to free speech and taxes. One of these is whether citizens have the right to market and promote tax-evasion schemes to the general public. Free speech advocates have argued that this is a right protected by the First Amendment of the United States. The courts, however, have said no.
As a result, individuals have been prosecuted for or convicted of criminal offenses such as conspiracy to obstruct the IRS by advocating tax evasion via bogus trusts, tax evasion, conspiracy to defraud the government, and aiding and abetting thousands of fraudulent tax returns. It appears that the courts have decided free speech, as protected by the First Amendment of the United States, does not apply to people who market and promote tax-evasion schemes.
For more information on this specific topic, visit http://www.splcenter.org/get-informed/intelligence-report/browse-all-issues/2004/summer/taxing-the-first-amendment.
Special thanks to Cincinnati Tax Service for their assistance with this information.
Here’s a real-life example of the IRS being used as a political tool in Cincinnati.