If a ballet at a Manhattan theater qualifies for a tax break that New York gives to musical and artistic performances, should a routine at a strip club get the discount, too? The New York Court of Appeals has said no, but a group of First Amendment supporters is arguing that a tax that discriminates based on content is unconstitutional in the first place.
In an amicus brief in 677 New Loudon Corp. v. State of New York Tax Appeals Tribunal, five members of the Media Coalition, a First Amendment advocacy group, are challenging the New York high court’s October 2012 decision to decline to extend a sales-tax exemption to Nite Moves, an adult-entertainment venue in Latham, N.Y.
Under New York law, “places of amusement” must pay a four-percent sales tax, but the state exempts admission charges for “dramatic or musical arts performances,” including “choreographic” shows. In concluding that the exemption does not cover “women gyrating on a pole to music,” the New York Court of Appeals required Nite Moves to pay more than $125,000 in taxes. In July, 677 New Loudon Corp., which operates Nite Moves, asked the Supreme Court to reverse that ruling.
The Media Coalition members, who wrote in support of Nite Moves’ cert petition, argue the First Amendment forbids the government from basing tax decisions on whether it perceives speech to have “sufficient cultural or artistic value.”
The members include the American Booksellers Foundation for Free Expression, the Association of American Publishers, the Comic Book Legal Defense Fund, the Freedom to Read Association, and the Entertainment Merchants Association. The last group was a respondent in 2011’s Brown v. Entertainment Merchants Association.
The Media Coalition brief warns that the New York law and proposed taxes in other states are attempts to circumvent Brown, which emphasized that legislatures can only restrict the content of speech in certain traditionally exempted forms, such as incitement, obscenity or fighting words.
The amici explain in their August brief that it is important for mainstream creators and distributors to voice support for speech that some people may regard as offensive or unimportant.
“The greatest threats to the First Amendment arise when the speaker or the subject matter of the speech isn’t popular,” said Dentons partner Richard Zuckerman, who helped write the brief. “If the only people who defend that speech are people who like that speech, then the First Amendment will fail.”
Dentons has long represented Media Coalition. Michael Bamberger, a partner at the firm, is general counsel for Media Coalition and counsel of record on the brief.
The amici point to two tax cases from the 1980s, as well as Brown, to show that taxes that discriminate based on content are impermissible.
In Arkansas Writers’ Project, Inc. v. Ragland, the Supreme Court invalidated a sales tax exemption granted to religious, professional, trade and sports magazines. Minneapolis Star & Tribune Co. v. Minnesota Commissioner of Revenue found unconstitutional taxes based on newspapers’ sizes. Brown, meanwhile, held that states may not impose ratings requirements or restrictions on sales of video games that depict violent activity.
“When you read Brown together with the tax cases, it’s clear that if you can’t impose a restriction on the speech by banning it or requiring that it be subject to a rating, then you also can’t selectively tax the speech,” Zuckerman said.
The brief warns that, since Brown, a handful of states are trying to “get around” that ruling by proposing taxes that single out video games and other media that have content that is either violent or mature. Additionally, the supreme courts in Illinois, Utah and Texas have approved taxes that single out adult-entertainment venues in recent years.
“What the decision in this case does is it raises the threat that states may try to use the taxing power as a form of censorship,” Zuckerman said.
The New York Court of Appeals did not address the constitutional arguments in 677 New Loudon. Instead, it deferred to the state’s tax appeals board, which had reasoned that the routines at Nite Moves were dissimilar from ballets and did not qualify as choreographic performances. Three judges dissented, arguing that distinguishing between “lowbrow” and “highbrow” dance is like taxing Hustler but not The New Yorker.
Jamie Schuman is a freelance writer and graduate of The George Washington University Law School.