Case Overview

Legal Principle at Issue

Whether the First Amendment prevents a state from imposing a sales tax on only selected segments of the media.


Affirmed and reversed (or vacated) in part and remanded. Petitioning party received a favorable disposition.


Arkansas' Gross Receipts Act imposed a sales tax on dozens of services, including the provision of cable television. The Act, however, exempted from taxation receipts from newspaper and magazine sales. The cable television industry in Arkansas brought suit challenging the Act, arguing that Arkansas could not constitutionally tax cable television when it was not taxing the print media. The trial court rejected this argument. While the case was on appeal, Arkansas amended the Act to tax all television and radio services. The Arkansas Supreme Court upheld the trial court's decision, stating that the First Amendment does not prohibit different taxation of different members of the media. The Arkansas Supreme Court, however, also held that the First Amendment does prohibit differential taxation among member of the same medium and therefore found that the Act was unconstitutional to the extent that it, before the amendment, taxed cable television differently from satellite television services.

Differential taxation of speakers and publishers is constitutionally suspect when it threatens to suppress the expression of particular ideas or viewpoints. A tax also is suspect if it targets a small group of speakers. Moreover, a tax triggers heightened scrutiny if it discriminates among speakers based on the content of their speech.Arkansas Writers' Project, Inc. v. Ragland, 481 U.S. 221 (1987); Minneapolis Star & Tribune Co. v. Minnesota Comm'r of Revenue, 460 U.S. 575 (1983); Grosjean v. American Press Co., 297 U.S. 233 (1936).

Importance of Case

The Court held that the Act's general applicability to all cable television operators in Arkansas, of which there were approximately 100, prevented any likelihood that the tax would result in the censorship of a particular speaker or particular ideas. The Court also noted that the tax did not single out the press and that there was no evidence that the tax was designed to interfere with First Amendment activities. Finally, the Court, relying on the decision in Regan v. Taxation with Representation of Washington, 461 U.S. 540 (1983), held that a tax scheme that discriminates among speakers does not implicate the First Amendment unless it discriminates on the basis of ideas. The Court had never before considered a tax that treated members of the media differently. In its opinion, the Court did not accept the cable television industry's argument that a differential tax structure raised at least the potential for abuse and covert censorship.

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