By Sigmund D. Schutz
As of Oct.1 newspapers lost their sales tax exemption in Maine. The sale of fuel to burn blueberry fields, lobster bait, ships stores, and dozens of other preferred groups and activities retained their sales tax exemptions.
The Governor’s Office of Tax Policy gave as reason for the new tax that “generally” sales tax exemptions are for the “necessities of life,” suggesting that newspapers do not reach that threshold.
Since when are newspapers no longer necessary? I get it that lobsters and blueberries are important parts of Maine’s economy, but do they deserve special treatment over free speech?
What Maine newspapers do is find, report, and distribute information on what is happening in Maine and around the world. Just about no one has the time or inclination to personally stay abreast of government activities. We rely on the press to do that for us. We need information on what the government is up to if we are to cast informed votes and hold our leaders accountable at the ballot box.
In recognition of the special role of newspapers in our society, the federal and state constitutions give the press special protection. The First Amendment to the federal Constitution contains this language:
“Congress shall make no law . . . abridging the freedom of speech, or of the press . . . .” Even stronger language is found in the Maine State Constitution. Our State Constitution provides, “Every citizen may freely speak, write and publish sentiments on any subject, being responsible for the abuse of this liberty; no laws shall be passed regulating or restraining the freedom of the press . . . .”
The First Amendment was not the product of merely abstract concern about the value of the free flow of information in a democracy. It was the product of a war of independence incited in part by British taxes on newspapers, notably when in 1765, the British Parliament imposed duties on newspapers in the American colonies. The Crown had for more than a century engaged in a persistent effort to suppress opinions critical of its agencies and operations. The First Amendment was meant to prevent taxes on knowledge.
As interpreted by the courts, the First Amendment may not require as a matter of constitutional law that newspapers be exempt from a generally applicable sales tax. The owners of newspapers, like anyone else, must pay taxes to support the government. But the principles underlying freedom of speech and of the press make a powerful case for a sales tax exemption. Particularly, when other activities less vital to our democracy remain exempt (such as, dare I say, lobster bait and fuel to burn blueberry fields).
And, the special burden on newspapers is particularly troublesome when other means of conveying information — such as the Internet — are not taxed. The result is that traditional newspapers, the only source of news that regularly engages in investigative journalism in Maine, are taxed.
I love lobsters and blueberries, but the repeal of the sales tax exemption for newspapers — which perform essential functions in a democracy — was not Maine’s finest hour.
Sigmund D. Schutz is an attorney practicing in media law and general litigation. He is member of the NEFAC board of directors. He can be emailed at sschutz@preti.com.