Minneapolis Star and Tribune Company v. Minnesota Commissioner of Revenue

Brief Fact Summary. The state imposed a special use tax on certain newspapers.

Synopsis of Rule of Law. Differential taxation of the press is prohibited unless the state has a compelling objective that cannot be achieved without it.

Facts. Minneapolis Star (Petitioner) publishes a morning and evening paper. From1967 until 1971 it was exempt from the general state sales tax. In 1971, the state legislation imposed a special use tax on the cost of paper and ink while the sales tax exemption was continued. Then in 1974, the use tax was amended so that the first $100,000.00 of ink and paper used per year were exempt. This resulted in a $4,000.00 annual tax credit for each paper. Petitioner represented nearly two-thirds of the total amount collected.

Issue. Is tax of ink and paper unconstitutional restriction of free speech?

Held. Yes. Minnesota’s tax violates the First Amendment because it singles out the press and targets certain newspapers. The sales tax exemption results in a penalty for only a few of the very large papers. Without a proper justification for this particular tax application, the law is an unconstitutional restraint of the press.

Dissent. The use tax has been less burdensome than the sales tax and does not hinder the freedom of the press. In fact, this regulation has encouraged the growth of the press by allowing smaller papers to join or remain in the market.

Discussion. Use tax is facially discriminatory as it focuses only on certain publications. By doing so, the state has singled out the press for special tax treatment. This treatment is unconstitutional because it gives the state extra power over the targeted taxpayer and effectively censors the press. Furthermore, no explanation is given for why this alternative tax was implemented instead of applying the general sales tax.