Minneapolis Star & Tribune Co. v. Minnesota Commissioner of Revenue

Background

A large Minneapolis publisher sued to get back taxes it paid after Minnesota changed its tax rules. Minnesota kept newspapers exempt from the general sales tax, but in 1971 it imposed a 4% use tax on ink and paper used in publications. In 1974 the legislature exempted the first $100,000 of ink and paper per publication, so only a handful of publishers actually paid the tax. The publisher challenged the law as violating the First Amendment and equal protection; the Minnesota Supreme Court upheld the tax, and the case reached the U.S. Supreme Court.

Reasoning

The Court asked whether a State may single out the press with a special tax. The majority held that singling out the press raises unique First Amendment concerns because differential taxation can threaten press freedom and may be used as a censorial tool. The State’s interest in raising revenue was important but not sufficient when the tax singled out publications and targeted only a few papers. The Court also said courts should not gamble on uncertain economic comparisons between tax methods, and that Minnesota offered no adequate justification for the unequal scheme.

Real world impact

The Court reversed and invalidated Minnesota’s ink-and-paper tax. Newspapers and similar publications cannot be singled out for special taxes unless the State shows a compelling, narrowly tailored need that cannot be achieved otherwise. The opinion leaves open that nondiscriminatory, generally applicable taxes or clearly justified alternatives might be permitted.

Dissents or concurrances

Justice Rehnquist dissented, arguing the record showed newspapers benefited from the use tax and that courts can and should assess economic burden; Justice White agreed the exemption made the tax invalid but questioned the Court’s refusal to compare burdens.