Lamar Advantage GP Co., L.L.C. v. Cincinnati (Slip Opinion)

[Until this opinion appears in the Ohio Official Reports advance sheets, it may be cited as
Lamar Advantage GP Co., L.L.C. v. Cincinnati, Slip Opinion No. 2021-Ohio-3155.]
NOTICE
This slip opinion is subject to formal revision before it is published in an
advance sheet of the Ohio Official Reports. Readers are requested to
promptly notify the Reporter of Decisions, Supreme Court of Ohio, 65
South Front Street, Columbus, Ohio 43215, of any typographical or other
formal errors in the opinion, in order that corrections may be made before
the opinion is published.
SLIP OPINION NO. 2021-OHIO-3155LAMAR ADVANTAGE GP COMPANY, L.L.C., D.B.A. LAMAR ADVERTISING OF
CINCINNATI, OH, ET AL., APPELLANTS, v. THE CITY OF CINCINNATI ET AL.,
APPELLEES.
[Until this opinion appears in the Ohio Official Reports advance sheets, it
may be cited as Lamar Advantage GP Co., L.L.C. v. Cincinnati, Slip Opinion
No. 2021-Ohio-3155.]
First Amendment—Freedom of speech and of the press—Selective taxation—City’s
need to raise revenue did not justify tax imposed solely on a small number
of billboard operators—Tax did not survive strict scrutiny and
impermissibly infringed on rights to free speech and a free press protected
by the First Amendment to the United States Constitution—Court of
appeals’ judgment reversed and trial court’s order permanently enjoining
enforcement of tax reinstated.
(No. 2020-0931—Submitted June 16, 2021—Decided September 16, 2021.)
APPEAL from the Court of Appeals for Hamilton County,
No. C-180675, 2020-Ohio-3377.
SUPREME COURT OF OHIO
________________
KENNEDY, J.
{¶ 1} This appeal from a judgment of the First District Court of Appeals
presents a single question: is a tax imposed solely upon a small number of billboard
operators a discriminatory tax that violates the rights to freedom of speech and a
free press protected by the First Amendment to the United States Constitution?
{¶ 2} The First Amendment, as applied to the states through the Fourteenth
Amendment, protects the rights to free speech and a free press from infringement
by federal, state, and local government. Among the protections that it affords to
the people of this country is the prohibition against selective taxation—taxes that
target only a small group of speakers or that single out the press. Whether a
censorial intent is manifest or absent, a selective tax creates the intolerable potential
for self-censorship by the press and abuse by governmental actors aimed to
suppress, compel, or punish speech. For these reasons, a selective tax imposed on
activities protected by the First Amendment, unlike a generally applicable tax, is
subject to strict scrutiny and may survive only if the government justifies the tax by
proving that it furthers a compelling governmental interest and is narrowly tailored
to achieve that interest.
{¶ 3} Appellee the city of Cincinnati imposes a tax on outdoor advertising
signs. But through definitions and exemptions within the city’s municipal code,
the tax burdens fall predominantly on only two billboard operators. As speakers
and publishers of speech, those billboard operators may not be singled out or
targeted for engaging in expression protected by the First Amendment. Although
the city has an interest in raising money to support local government, the fact that
there are alternative sources of revenue means that the tax cannot survive strict
scrutiny. We therefore reverse the contrary judgment of the First District Court of
Appeals and reinstate the trial court’s order permanently enjoining the enforcement
of the city’s billboard tax, Cincinnati Municipal Code Chapter 313.
2
January Term, 2021
Facts and Procedural History
{¶ 4} Faced with a budget shortfall of approximately $2,500,000, the
Cincinnati City Council in June 2018 passed Ordinance No. 167-2018, which
enacted Cincinnati Municipal Code (hereinafter “CMC”) Chapter 313 and “lev[ied]
an excise tax on the privilege of installing, placing, and maintaining outdoor
advertising signs in the City of Cincinnati.” The city estimated that the tax would
raise $709,000 to help balance the city’s budget. The money raised by the billboard
tax was not intended to regulate or mitigate the effects of billboards but instead was
meant to fund special projects designated by city council relating to human services
and public health and to restore funding to city council, the mayor, and the city
clerk.
{¶ 5} As enacted, former CMC 313-1-O defined the term “outdoor
advertising sign” by incorporating the definition of the term “off-site sign.” CMC
1427-03-O, in turn, defines an “off-site sign” as a commercial sign that “proposes
or promotes a commercial transaction to be conducted on a premises other than the
premises on which the sign is located” or that “directs attention to a good, product,
commodity, business, service, event, or other object that serves as the basis of a
commercial transaction that is not conducted” on the premises on which the sign is
located. Former CMC 313-1-O also provided that an “outdoor advertising sign”
includes “an outdoor advertising sign used from time-to-time as a noncommercial
sign or an on-site commercial sign.”
{¶ 6} By excluding on-site signs, the city exempted numerous—potentially
thousands—of advertising signs from the tax. In addition, the ordinance excluded
some signs displayed in the public right-of-way (including marquees, projecting
signs, and signs relating to sponsorships), CMC 895-2(a), 723, 723-1-A2, and 723-
17, signs approved by the city for special events, CMC 895-2(c), and signs erected
or displayed on city-owned property, including public-transit stops and streetcar
stations, CMC 895-2(d), 723-6(b), and 723-13.
3
SUPREME COURT OF OHIO
{¶ 7} The ordinance requires an “advertising host,” that is, one who owns
or controls an outdoor advertising sign in the city, to pay a tax that is the greater of
the following: (1) 7 percent of the gross receipts generated by the outdoor
advertising sign or (2) an annual minimum amount that is calculated based upon
the type, location, and square footage of the sign. CMC 313-3. In addition to
imposing a tax, the 2018 ordinance also prohibited an advertising host from issuing
a statement to an advertiser reflecting the tax, former CMC 313-7(a), and it
prohibited a host from indicating that an advertiser would absorb the cost of the tax,
former CMC 313-7(b).
{¶ 8} Appellants, Lamar Advantage GP Company, L.L.C., d.b.a. Lamar
Advertising of Cincinnati, OH, and Norton Outdoor Advertising, Inc., are
“advertising hosts” as that term is defined by CMC 313-1-A1 and engage in the
business of leasing billboard space for the dissemination of commercial and
noncommercial speech. Owning approximately 450 and 415 billboards
respectively, Lamar and Norton control most of the market for billboard advertising
in Cincinnati. However, because the billboard tax would make their less profitable
billboards unsustainable, Lamar and Norton have estimated that the tax might cause
them to remove a total of 70 to 80 billboards. Further, due to competition with
other advertising mediums, neither Lamar nor Norton would be able to pass on to
their customers the cost of a 7 percent tax on gross revenues without losing
business.
{¶ 9} The messages on Lamar and Norton’s billboards are approximately
70 to 75 percent paid advertisements, and the remaining 25 to 30 percent of the
advertising space is donated for public-service announcements or consists of Lamar
and Norton’s own speech (such as tributes to notable public figures and veterans).
The paid advertisements are not only for commercial speech, however, but also
include political advertisements for candidates for local office, including judges
and members of city council, as well as the noncommercial speech of nonprofit
4
January Term, 2021
organizations, religious groups, advocacy groups, and charities. Lamar and Norton
also donate advertising space to display the noncommercial speech of charities and
nonprofit organizations, public-service announcements, AMBER alerts, and
public-health-and-safety messages.
{¶ 10} Members of city council have contacted both Lamar and Norton to
request the donation of billboard space or to press for the removal of messages with
which they disagree. For example, Norton ran a paid political message from an
organization stating, “Voter Fraud Is a Felony,” a message that Norton did not
perceive to be incorrect or inflammatory. Norton, however, “receive[d] backlash
from local lawmakers.” Concerned that city council members held Norton’s “fate
in their hands,” it removed the displays. A council member also approached Lamar,
expressing the belief that billboards saying, “Voter Fraud Is a Felony,” amounted
to voter intimidation. Lamar agreed to donate space for the counter-message that
voting is a right, not a crime, and it brought that message to the public as its own
political speech.
{¶ 11} As those examples show, Lamar and Norton exercise editorial
control over the messages displayed on their billboards. They edit advertisements
to ensure effective marketing but also review them to be sure that the information
conveyed is accurate and meets community and the companies’ standards. Norton,
for instance, will not post advertisements that are antireligious or proabortion, and
it once agreed to post an advertisement for a plastic-surgery group only after the
proposed picture was made “less revealing.” Nonetheless, as Lamar’s vice
president, Thomas Vincent Fahey, put it, Lamar is “very apprehensive to do
anything that would be critical of the city,” expressing concern that city council
might increase taxes in retaliation if it were not “happy with whatever message
[Lamar] may have delivered on [its] displays.”
{¶ 12} Lamar and Norton brought separate actions in the Hamilton County
Court of Common Pleas against the city and its treasurer, appellee Nicole Lee, its
5
SUPREME COURT OF OHIO
director of the Department of Buildings and Inspections, appellee Art Dahlberg,
and its finance director, appellee Reginald Zeno, seeking among other things a
declaration that the tax violated Lamar and Norton’s constitutional rights to free
speech and a free press and requesting an injunction against the tax’s enforcement.
The trial court consolidated the cases, and after it granted a temporary restraining
order and a preliminary injunction, the court permanently enjoined the city from
enforcing the billboard tax, along with its provisions precluding billboard operators
from telling its customers that price increases had been caused by the tax.
{¶ 13} The First District Court of Appeals affirmed in part and reversed in
part, holding that the city’s prohibition against speech between advertising hosts
and their customers about who bore the cost of the tax violated the First
Amendment. 2020-Ohio-3337, 155 N.E.3d 245, ¶ 2, 52-53. However, the court of
appeals concluded that the tax itself did not violate the First Amendment, because
it is content neutral and does not single out billboard operators in a way that chills
or threatens to censor their speech. Id. at ¶ 36, 53.
{¶ 14} We accepted Lamar and Norton’s separate appeals to review the
same two propositions of law:
l. Constitutionally mandated heightened First Amendment
scrutiny applies to a discriminatory excise tax on billboards that
targets a small group of speakers or singles out the press.
2. [CMC] 313-7(b), the Tax’s Gag Provision, prohibits
political speech.
See 160 Ohio St.3d 1418, 2020-Ohio-4811, 154 N.E.3d 98.
{¶ 15} After this court accepted Lamar and Norton’s appeals, the city
amended CMC 895-1-O, which now defines the term “outdoor advertising sign” to
6
January Term, 2021
mean a sign that is leased or offered for lease by its owner to another, including for
the placement of a message on the sign. The city also repealed CMC 313-7.
{¶ 16} Because Lamar and Norton’s challenges to CMC 313-7 in their
second propositions of law are now moot, we confine our analysis to Lamar and
Norton’s first propositions of law.
Law and Analysis
Freedom of the Press
{¶ 17} “Freedom of speech and freedom of the press, which are protected
by the First Amendment from infringement by Congress, are among the
fundamental personal rights and liberties which are protected by the Fourteenth
Amendment from invasion by state action.” Lovell v. Griffin, 303 U.S. 444, 450,
58 S.Ct. 666, 82 L.Ed. 949 (1938). “[M]unicipal ordinances adopted under state
authority constitute state action and are within the prohibition of the amendment.”
Id.{¶ 18} The press “includes not only newspapers, books, and magazines, but
also humble leaflets and circulars,” Mills v. Alabama, 384 U.S. 214, 219, 86 S.Ct.
1434, 16 L.Ed.2d 484 (1966), book publishers, Simon & Schuster, Inc. v. Members
of New York State Crime Victims Bd., 502 U.S. 105, 116, 112 S.Ct. 501, 116
L.Ed.2d 476 (1991), and cable-television providers, Los Angeles v. Preferred
Communications, Inc., 476 U.S. 488, 494-495, 106 S.Ct. 2034, 90 L.Ed.2d 480(1986). It encompasses mediums that exercise editorial discretion in publishing the
content of others in addition to their own content. See Preferred Communications
at 494-495. “The press in its historic connotation comprehends every sort of
publication which affords a vehicle of information and opinion.” Lovell at 452. As
Professor Eugene Volokh has explained, people during the Framing Era and at the
time of the ratification of the Fourteenth Amendment understood that the freedom
of the press meant the right of every person to use technology (such as the printing
press) to engage in mass communication. Volokh, Freedom for the Press as an
7
SUPREME COURT OF OHIO
Industry, or for the Press as a Technology? From the Framing to Today, 160
U.Pa.L.Rev. 459, 463 (2012).
{¶ 19} Here, Lamar and Norton use printing technology for mass
communication and exercise editorial discretion over the messages that they
publish, and the Supreme Court of the United States has consistently rejected the
proposition that the “institutional press” is afforded more protection by the First
Amendment than other speakers, Citizens United v. Fed. Election Comm., 558 U.S.
310, 352, 130 S.Ct. 876, 175 L.Ed.2d 753 (2010). Moreover, statements “do not
forfeit [First Amendment] protection because they were published in the form of a
paid advertisement.” New York Times Co. v. Sullivan, 376 U.S. 254, 266, 84 S.Ct.
710, 11 L.Ed.2d 686 (1964). As speakers and publishers of speech, both Lamar
and Norton are protected by the rights to freedom of speech and of the press
enshrined in the First Amendment to the United States Constitution.
History of the Free-Press Clause
{¶ 20} In Grosjean v. Am. Press Co., the Supreme Court of the United
States examined “the history and circumstances which antedated and attended the
adoption of the abridgement clause of the First Amendment.” 297 U.S. 233, 245,
56 S.Ct. 444, 80 L.Ed. 660 (1936). The court explained:
For more than a century prior to the adoption of the
amendment—and, indeed, for many years thereafter—history
discloses a persistent effort on the part of the British government to
prevent or abridge the free expression of any opinion which seemed
to criticize or exhibit in an unfavorable light, however truly, the
agencies and operations of the government. The struggle between
the proponents of measures to that end and those who asserted the
right of free expression was continuous and unceasing.
8
January Term, 2021
Id. The court noted that although the right to a free press had initially contemplated
the right to publish without prior restraint, “mere exemption from previous
censorship was soon recognized as too narrow a view of the liberty of the press.”
Id. at 246.
{¶ 21} In 1712, Parliament had imposed a tax on newspapers and
advertisements, and “the main purpose of these taxes was to suppress the
publication of comments and criticisms objectionable to the Crown.” Id. What
followed, the court in Grosjean explained, was “more than a century of resistance
to, and evasion of, the taxes, and of agitation for their repeal.” Id. “The aim of the
struggle was not to relieve taxpayers from a burden, but to establish and preserve
the right of the English people to full information in respect of the doings or
misdoings of their government.” Id. at 247.
{¶ 22} Characterized as “taxes on knowledge,” “the taxes had, and were
intended to have, the effect of curtailing the circulation of newspapers, and
particularly the cheaper ones whose readers were generally found among the
masses of the people.” Id. at 246. As the court in Grosjean noted, the taxes were
simply a refined form of prior restraint that left the livelihoods of printers and
publishers at the mercy of the commissioner of stamps. Id. at 247. The court
pointed to the impact of the taxes on the colonies, suggesting that “these taxes
constituted one of the factors that aroused the American colonists to protest against
taxation for the purposes of the home government; and that the revolution really
began when, in 1765 [with the Stamp Act], that government sent stamps for
newspaper duties to the American colonies.” Id. at 246. Or as one scholar has
explained, it was “ ‘quite likely that [the tax on] paper was more emphatically an
immediate cause for the outbreak of the spirit of revolt than the insipid [tea] of
which so much has been written.’ ” (First brackets added in West.) West, The
“Press,” Then & Now, 77 Ohio St.L.J. 49, 80-81 (2016), quoting Wroth, The
Colonial Printer 142-143 (2d Ed.1964).
9
SUPREME COURT OF OHIO
{¶ 23} Reflecting on this history, the Supreme Court concluded in Grosjean
that the First Amendment “was meant to preclude the national government, and by
the Fourteenth Amendment to preclude the states, from adopting any form of
previous restraint upon printed publications, or their circulation, including that
which had theretofore been effected by these two wellknown and odious
methods”—i.e., the newspaper stamp tax and the tax on advertisements. 297 U.S.
at 249, 56 S.Ct. 444, 80 L.Ed. 660. As the court later explained, “[t]he exaction of
a tax as a condition to the exercise of the great liberties guaranteed by the First
Amendments is as obnoxious * * * as the imposition of a censorship or a previous
restraint. * * * For, to repeat, ‘the power to tax the exercise of a privilege is the
power to control or suppress its enjoyment.’ ” Follett v. McCormick, 321 U.S. 573,
577, 64 S.Ct. 717, 88 L.Ed. 938 (1944), quoting Murdock v. Pennsylvania, 319 U.S.
105, 112, 63 S.Ct. 870, 87 L.Ed. 1292 (1943).
The Prohibition Against Selective Taxation of the Press
{¶ 24} The First Amendment, then, precludes the government from singling
out the press for disparate treatment through selective taxation. Grosjean at 251.
{¶ 25} In Grosjean, the state of Louisiana had imposed a 2 percent tax on
gross receipts from advertising, targeting publications with weekly circulations
above 20,000. Id. at 240-241. The tax fell exclusively on 13 newspapers, while 4
other daily newspapers and 120 weekly newspapers were not taxed. Id. Reciting
the history and tradition of the Free-Press Clause, the Supreme Court noted that the
First Amendment was meant to protect against prior restraints on publication,
which include taxes that curtail the amount of revenue raised by advertisements and
tend to directly restrict circulation. Id. at 244-245, 248-249. The court pointed out
that “it is not without significance that, with the single exception of the Louisiana
statute, so far as we can discover, no state during the one hundred fifty years of our
national existence has undertaken to impose a tax like that now in question.” Id. at
250-251. The court invalidated the Louisiana tax “because, in the light of its history
10
January Term, 2021
and of its present setting, it is seen to be a deliberate and calculated device in the
guise of a tax to limit the circulation of information to which the public is entitled
in virtue of the constitutional guaranties.” Id. at 250. That is, the tax was
unconstitutional because it had “the plain purpose of penalizing the publishers and
curtailing the circulation of a selected group of newspapers.” Id. at 251.
{¶ 26} In Minneapolis Star & Tribune Co. v. Minnesota Commr. of
Revenue, the Supreme Court reviewed a use tax imposed on the costs of ink and
paper consumed in the production of a publication that exempted from taxation the
first $100,000 in purchases for those goods in any calendar year. 460 U.S. 575,
577-579, 103 S.Ct. 1365, 75 L.Ed.2d 295 (1983). The tax fell on just 14 of the 388
paid-circulation newspapers in the state in 1974, and 16 of the 374 paid-circulation
newspapers in 1975, and Minneapolis Star and Tribune Company paid roughly two-
thirds of the collected tax revenue for each of those years and $608,634 in 1974.
Id. at 578-579. However, the court distinguished the facts of that case from those
in Grosjean, because unlike the Louisiana tax at issue in Grosjean, “there [was] no
legislative history and no indication, apart from the structure of the tax itself, of any
impermissible or censorial motive on the part of the legislature.” (Footnote
omitted.) Minneapolis Star & Tribune Co. at 580. That, however, ended up being
a distinction without a difference, because “[i]llicit legislative intent is not the sine
qua non of a violation of the First Amendment.” (Emphasis sic.) Id. at 592.
{¶ 27} The Supreme Court explained that Minnesota had “created a special
tax that applies only to certain publications protected by the First Amendment” that
“is facially discriminatory, singling out publications for treatment that is, to our
knowledge, unique in Minnesota tax law.” Id. at 581. The tax did not complement
the sales tax, as a traditional use tax does, because it applied to both in-state and
out-of-state sales. Id. at 582. The court pointed out that “differential taxation of
the press would have troubled the Framers of the First Amendment,” id. at 583,
because “[a] power to tax differentially, as opposed to a power to tax generally,
11
SUPREME COURT OF OHIO
gives a government a powerful weapon against the taxpayer selected,” id. at 585.
With generally applicable taxes, there is little concern for censorship because there
is “not fear that a government will destroy a selected group of taxpayers by
burdensome taxation if it must impose the same burden on the rest of its
constituency.” Id.{¶ 28} Selective taxation of the press, in contrast, “can operate as
effectively as a censor to check critical comment by the press.” Id. “Further,
differential treatment, unless justified by some special characteristic of the press,
suggests that the goal of the regulation is not unrelated to suppression of expression,
and such a goal is presumptively unconstitutional.” Id. The court determined that
strict scrutiny applied to its review of the tax: “Differential taxation of the press
* * * places such a burden on the interests protected by the First Amendment that
we cannot countenance such treatment unless the State asserts a counterbalancing
interest of compelling importance that it cannot achieve without differential
taxation.” Id. And the state’s need to raise revenue “cannot justify the special
treatment of the press, for an alternative means of achieving the same interest
without raising concerns under the First Amendment is clearly available: the State
could raise the revenue by taxing businesses generally, avoiding the censorial threat
implicit in a tax that singles out the press.” (Footnote omitted.) Id. at 586.
{¶ 29} The Supreme Court gave an alternative reason for striking down the
tax: “Minnesota’s ink and paper tax violates the First Amendment not only because
it singles out the press, but also because it targets a small group of newspapers. The
effect of the $100,000 exemption enacted in 1974 is that only a handful of
publishers pay any tax at all, and even fewer pay any significant amount of tax.”
Minneapolis Star & Tribune Co., 460 U.S. at 591, 103 S.Ct. 1365, 75 L.Ed.2d 295.
Although the state attempted to justify the selective tax on the grounds that it was
necessary to provide an equitable tax system, the court questioned the state’s
commitment to equity because the state had not extended the tax treatment to small
12
January Term, 2021
businesses generally. Id. The court concluded, “And when the exemption selects
such a narrowly defined group to bear the full burden of the tax, the tax begins to
resemble more a penalty for a few of the largest newspapers than an attempt to
favor struggling smaller enterprises.” Id. at 592.
{¶ 30} In Arkansas Writers’ Project, Inc. v. Ragland, the Supreme Court
addressed a tax that subjected general-interest magazines to a sales tax on tangible
personal property but provided exemptions for newspapers and religious, trade,
professional, and sports magazines. 481 U.S. 221, 224, 107 S.Ct. 1722, 95 L.Ed.2d
209 (1987). A general-interest-magazine publisher subject to the tax challenged it
on First Amendment grounds. Id. at 224-225. The court invalidated the tax,
determining that “it targets a small group within the press,” id. at 229, and “cannot
be characterized as nondiscriminatory, because it is not evenly applied to all
magazines,” id. Although the tax was viewpoint neutral, it required authorities to
review the content of the magazines to determine whether they fit into the
exemption for religious, trade, professional, and sports magazines, and “[s]uch
official scrutiny of the content of publications as the basis for imposing a tax is
entirely incompatible with the First Amendment’s guarantee of freedom of the
press.” Id. at 230. The court concluded that Arkansas had “advanced no
compelling justification for selective, content-based taxation of certain magazines”
and therefore held that the tax was “invalid under the First Amendment.” Id. at
234. For this reason, the court determined that it was unnecessary to decide
“whether a distinction between different types of periodicals presents an additional
basis for invalidating the sales tax, as applied to the press.” Id. at 233.
{¶ 31} The Supreme Court addressed this question in Leathers v. Medlock,
considering “whether the First Amendment prevents a State from imposing its sales
tax on only selected segments of the media.” 499 U.S. 439, 444, 111 S.Ct. 1438,
113 L.Ed.2d 494 (1991). The Arkansas tax at issue in Leathers applied “to receipts
from the sale of all tangible personal property and a broad range of services,”
13
SUPREME COURT OF OHIO
including utilities, telecommunications, lodging, alterations, cleaning, repairs,
printing, admission to recreational events and facilities, and cable television. Id. at
447. However, the law provided exemptions from the tax for newspapers and
magazines. Id. at 443. A cable-television customer, a cable-television provider,
and a trade organization composed of approximately 80 cable-television providers
from across the state filed suit to enjoin the tax as applied to cable-television
services. Id. at 442.
{¶ 32} The court acknowledged that cable-television providers engage in
speech and that in much of their operation they are part of the press. Id. at 444. It
explained, however, that the fact “[t]hat [cable television] is taxed differently from
other media does not by itself * * * raise First Amendment concerns.” Id.{¶ 33} The court determined that the tax on cable television was not like the
taxes that it had invalidated in Grosjean, Minneapolis Star & Tribune Co., and
Arkansas Writers’ Project. Leathers at 447-448. Unlike the tax at issue in
Grosjean, the Arkansas cable-television tax was not intended to interfere with the
cable-television provider’s First Amendment activities by suppressing the
circulation of information. Leathers at 444-445, 448. Unlike the tax at issue in
Minneapolis Star & Tribune Co., the cable-television tax did not single out the press
for special treatment or target a small number of speakers to bear the burden of the
tax. Leathers at 447-448. And unlike the tax at issue in Arkansas Writers’ Project,
application of the cable-television tax did not require consideration of the speech’s
content. Leathers at 446. Further, while the tax in in Arkansas Writers’ Project
applied to, at most, three publishers, Leathers at 448, the tax at issue in Leathers
“extended * * * uniformly to the approximately 100 cable systems then operating
in the State,” id. The court noted, “This is not a tax structure that resembles a
penalty for particular speakers or particular ideas.” Id. at 449. The court in
Leathers then concluded:
14
January Term, 2021
The Arkansas Legislature has chosen simply to exclude or exempt
certain media from a generally applicable tax. Nothing about that
choice has ever suggested an interest in censoring the expressive
activities of cable television. Nor does anything in this record
indicate that Arkansas’ broad-based, content-neutral sales tax is
likely to stifle the free exchange of ideas. We conclude that the
State’s extension of its generally applicable sales tax to cable
television services alone, or to cable and satellite services, while
exempting the print media, does not violate the First Amendment.
Id. at 453.
{¶ 34} From these cases, we distill the following principles. First, the press
may be subjected to a generally applicable tax. Leathers, 499 U.S. at 447, 111 S.Ct.
1438, 113 L.Ed.2d 494; see also Fed. Trade Comm. v. Superior Court Trial
Lawyers Assn., 493 U.S. 411, 446, 110 S.Ct. 768, 107 L.Ed.2d 851 (1990)
(Brennan, J., concurring in part and dissenting in part), quoting Arcara v. Cloud
Books, Inc., 478 U.S. 697, 708, 106 S.Ct. 3172, 92 L.Ed.2d 568 (1986) (O’Connor,
J., concurring) (“ ‘the arrest of a newscaster for a traffic violation,’ for example,
does not offend the First Amendment”). As the court explained in Minneapolis
Star & Tribune Co., there is no reason to believe that the government might use a
generally applicable tax to censor, control, or punish speech if the tax puts the same
burden on the rest of its constituency. 460 U.S. at 585, 103 S.Ct. 1365, 75 L.Ed.2d
295. “[S]uch laws provide too blunt a censorship instrument to warrant judicial
intervention prior to an allegation of actual misuse.” Lakewood v. Plain Dealer
Pub. Co., 486 U.S. 750, 761, 108 S.Ct. 2138, 100 L.Ed.2d 771 (1988).
{¶ 35} Second, a tax is unconstitutional if an official must look at the
content of speech to determine whether the tax applies to it. Arkansas Writers’
Project, Inc., 481 U.S. at 230, 107 S.Ct. 1722, 95 L.Ed.2d 209.
15
SUPREME COURT OF OHIO
{¶ 36} Third, a tax that selectively singles out the press or targets a small
group of speakers creates the danger that the tax will be used to censor speech.
Minneapolis Star & Tribune Co. at 591. This is true even if the tax singles out the
press to its benefit: “the very selection of the press for special treatment threatens
the press not only with the current differential treatment, but with the possibility of
subsequent differentially more burdensome treatment.” (Emphasis sic.) Id. at 588.
“[T]he threat of burdensome taxes * * * can operate as effectively as a censor to
check critical comment by the press,” id. at 585, creating the “twin threats of self-
censorship and undetectable censorship,” Lakewood at 762.
{¶ 37} Lastly, it is not necessary to prove that the purpose of a tax is to
suppress or punish speech to establish that the tax violates the First Amendment.
“[E]vidence of an improper censorial motive” is not needed. Arkansas Writers’
Project at 228. The structure of the tax itself in imposing greater burdens on the
press or on speech may either raise a suspicion that it was intended to interfere with
expression protected by the First Amendment or create an unacceptable potential
for the government to use the tax to suppress, control, or punish expression.
Leathers, 499 U.S. at 446-449, 453, 111 S.Ct. 1438, 113 L.Ed.2d 494. As the court
explained in Minneapolis Star & Tribune Co., “Whatever the motive of the
legislature * * *, we think that recognizing a power in the State not only to single
out the press but also to tailor the tax so that it singles out a few members of the
press presents such a potential for abuse that no interest suggested by [the
government] can justify the scheme.” (Emphasis added.) 460 U.S. at 591-592, 103
S.Ct. 1365, 75 L.Ed.2d 295. Because a selective tax creates such a potent tool for
censorship, it offends the First Amendment.
The Billboard Tax Is Unconstitutional
{¶ 38} Applying these principles, we conclude that the city’s selective tax
on billboards violates the First Amendment. We reject the city’s argument that the
billboard tax is a tax on the noncommunicative aspects of billboards. Tax liability
16
January Term, 2021
under the municipal ordinance does not attach simply because a sign is built or
already exists—it also requires that the sign is leased or offered for lease by its
owner to another. Further, we reject the city’s contention that the ordinance taxes
only a commercial transaction. The ordinance taxes advertising revenue in the
same way that the tax invalidated by the Supreme Court in Grosjean did, and it
taxes the means of communication like the ink-and-paper use tax that was struck
down by the court in Minneapolis Star & Tribune Co.
{¶ 39} And unlike the tax at issue in Leathers, the tax in this case is not
generally applicable. It does not apply to all or many businesses equally, and it is
not part of a broader tax on property or services that burdens other segments of the
economy. It does not apply to all advertisers—or even to all advertising signs. As
previously enacted, it excluded from taxation signs similar to those of Lamar and
Norton’s if they advertised goods or services provided on the same premises on
which the sign was located, see former CMC 313-1-O and current CMC 1427-03-
O, and, as amended, it still excludes many of those signs, because the tax applies
only to signs that are leased or offered for lease to third parties, CMC 895-1-O.
The ordinance further winnows the types of signs that are subject to the tax,
excluding some signs displayed in the public right-of-way (including marquees,
projecting signs, and signs relating to sponsorships), CMC 895-2(a), 723, 723-1-
A2, and 723-17, signs approved by the city for special events, CMC 895-2(c), and
signs erected or displayed on city-owned property, including public-transit stops
and streetcar stations, CMC 895-2(d), 723-6(b), and 723-13. The tax also excludes
all signs under 36 square feet in size, CMC 313-5(a)(iii), but none of Lamar or
Norton’s signs are that small.
{¶ 40} By enacting those exceptions, the city has targeted a small group of
speakers to bear most of the burden of a tax intended to raise $709,000 for the
purpose of balancing the city’s budget. Because that tax burden is not spread across
city council’s constituency but is instead imposed predominantly on two companies
17
SUPREME COURT OF OHIO
(Lamar and Norton), the political process may not alleviate the potential that the
tax might be used to suppress, control, or punish speech. Instead, the tax is
structured in a way that burdens activities protected by the First Amendment and
creates a potent tool for censorship. The evidence shows that the city’s council
members had not been shy in asking Lamar and Norton to donate billboard space
for their projects or in seeking the removal of messages with which they disagreed.
The tax on Lamar and Norton’s advertising revenue only increases that pressure.
Even if the city passed the tax ordinance without a motive to censor billboard
operators, the threat of overt censorship, self-censorship, or undetectable
censorship created by the tax impermissibly infringes on rights protected by the
First Amendment.
{¶ 41} The city’s billboard tax resembles the type of taxes that were a cause
of the American Revolution: taxes that curtail the amount of revenue raised by the
press through advertisements and tend to directly restrict the circulation of
protected expression. And it burdens First Amendment activities—the undisputed
evidence is that the tax will require Lamar and Norton to remove almost 10 percent
of their billboards, limiting the dissemination of protected content. As the Supreme
Court instructed in Minneapolis Star & Tribune Co., 460 U.S. at 585-586, 103 S.Ct.
1365, 75 L.Ed.2d 295, strict scrutiny applies and the government bears the burden
to prove that the tax ordinance survives that scrutiny. See also Reed v. Gilbert, 576
U.S. 155, 171, 135 S.Ct. 2218, 192 L.Ed.2d 236 (2015).
{¶ 42} The city enacted the billboard-tax ordinance to raise revenue. But
as the Supreme Court has determined:
Standing alone, [the need to raise revenue] cannot justify the special
treatment of the press, for an alternative means of achieving the
same interest without raising concerns under the First Amendment
is clearly available: the [city] could raise the revenue by taxing
18
January Term, 2021
businesses generally, avoiding the censorial threat implicit in a tax
that singles out the press.
(Footnote deleted.) Minneapolis Star & Tribune Co. at 586.
{¶ 43} We therefore hold that the city’s billboard tax infringes on the rights
to free speech and a free press protected by the First Amendment to the United
States Constitution.
{¶ 44} We acknowledge that the Court of Appeals of Maryland, in Clear
Channel Outdoor, Inc. v. Dir., Dept. of Fin. of Baltimore, recently upheld
Baltimore’s tax on the privilege of selling advertising space on billboards against
claims that the tax infringed on the rights to free speech and a free press. 472 Md.
444, 477-478, 247 A.3d 740 (2021). We do not find its analysis to be persuasive.
{¶ 45} First, the court concluded that the tax did not single out the press
because nothing indicated that the tax was intended—or raised suspicion that it was
intended—to interfere with protected speech. Id. at 471-472. However, as the
United States Supreme Court explained in Minneapolis Star & Tribune Co., a
purpose to censor is not required for a tax to violate the First Amendment. 460 U.S.
at 592, 103 S.Ct. 1365, 75 L.Ed.2d 295. The Maryland court also noted that the
Baltimore tax had no effect on the billboard owners’ circulation of messages. Clear
Channel Outdoor, Inc. at 472. In contrast, Lamar and Norton presented
uncontradicted evidence that the city’s billboard tax would require them to remove
their less profitable billboards.
{¶ 46} Second, the Maryland court determined that the Baltimore tax did
not target a small number of speakers; but the court reached that conclusion only
after it excluded from its analysis other commercial signs that were not subject to
the tax. Id. at 473-474. However, the Baltimore tax—which was projected to raise
between $1 million and $2 million annually—applied only to four billboard
operators, with Clear Channel Outdoor, Inc., paying approximately 90 percent of
19
SUPREME COURT OF OHIO
the revenue generated by the tax. Id. at 451-452. And although the court attributed
that disparity to “market conditions” caused by the consolidation of ownership of
the limited number of billboards allowed in the city, id. at 474, that does not change
the fact that Baltimore enacted a tax that applies to only a small number of speakers
that overwhelmingly bear the burden of a tax on a medium of expression.
{¶ 47} We therefore decline to adopt the Maryland high court’s analysis in
Clear Channel Outdoor, Inc.
Conclusion
{¶ 48} “The basic premise of the First Amendment is that all present
instruments of communication, as well as others that inventive genius may bring
into being, shall be free from governmental censorship or prohibition.” Kovacs v.
Cooper, 336 U.S. 77, 102, 69 S.Ct. 448, 93 L.Ed. 513 (1949) (Black, J., dissenting).
Included in the guarantee of free speech and a free press is the prohibition against
selective taxation that is designed to suppress, control, or punish speech or that is
structured in such a way that the tax creates an unacceptable potential for censorship
by the government or self-censorship by speakers and publishers.
{¶ 49} The city of Cincinnati has imposed such a discriminatory tax,
singling out members of the press and placing the tax’s burden on a small group of
speakers and publishers in a way that both directly limits the circulation of protected
speech and creates the danger that speech will be added or removed based on a
desire to please, or avoid the wrath of, city council. That the tax involves billboards
rather than the institutional press is of no consequence, and strict scrutiny applies.
And because the city’s need to raise revenue does not justify its selective tax on
speech and the press, the tax does not survive strict scrutiny and therefore
impermissibly infringes on the rights to free speech and a free press enshrined in
the First Amendment to the United States Constitution.
20
January Term, 2021
{¶ 50} For these reasons, we reverse the judgment of the First District Court
of Appeals and reinstate the trial court’s order permanently enjoining the
enforcement of Cincinnati Municipal Code Chapter 313.
Judgment reversed
and injunction reinstated.
O’CONNOR, C.J., and FISCHER, DEWINE, STEWART, and LASTER MAYS, JJ.,
concur.
DONNELLY, J., concurs in judgment only.
ANITA LASTER MAYS, J., of the Eighth District Court of Appeals, sitting for
BRUNNER, J.
_________________
Strauss Troy Co., L.P.A., R. Guy Taft, and Stephen E. Schilling, for
appellant Lamar Advantage GP Company, L.L.C., d.b.a. Lamar Advertising of
Cincinnati, OH.
Robbins, Kelly, Patterson & Tucker, L.P.A., Michael A. Galasso, and
Esther M. Norton, for appellant Norton Outdoor Advertising, Inc.
Andrew W. Garth, Cincinnati City Solicitor, Marion E. Haynes III, Chief
Counsel, and Kevin M. Tidd, Assistant City Solicitor, for appellees.
Sidley Austin, L.L.P., Virginia A. Seitz, and Christopher S. Ross, urging
reversal for amicus curiae Outdoor Advertising Association of America, Inc.
Graydon, Head & Ritchey, L.L.P., and John C. Greiner, urging reversal for
amici curiae Outdoor Advertising Association of Ohio, Ohio Association of
Broadcasters, Ohio News Media Association, The E.W. Scripps Company, and
Block Communications, Inc.
_________________
21