VILLAGE PUBLISHING CORPORATION v. NORTH CAROLINA DEPT. OF REVENUE
472 U.S. 1001

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U.S. Supreme Court

VILLAGE PUBLISHING CORPORATION v. NORTH CAROLINA DEPT. OF REVENUE , 472 U.S. 1001 (1985)

472 U.S. 1001

VILLAGE PUBLISHING CORPORATION
v.
NORTH CAROLINA DEPARTMENT OF REVENUE
No. 84-1248

Supreme Court of the United States

June 10, 1985

The appeal is dismissed for want of a substantial federal question.

Justice WHITE, with whom Justice BRENNAN joins, dissenting.

The North Carolina Sales and Use Tax Act, N.C.Gen.Stat. 105-164.1 to 105-164.44A (1979 and Supp.1983), exempts "[s]ales of newspapers by newspaper street vendors and by newspaper carriers making door-to-door deliveries and sales of magazines by magazine vendors making door-to-door sales." 105-164.13(28). The provision offers newspapers using this means of delivery a tax benefit denied other members of the press. A publisher distributing a newspaper free of charge must pay a sales or use tax on personal property that it purchases and incorporates into its newspaper (or on purchases of the printed newspaper itself if it is purchased in completed form from the printer), for such property is "not sold but used, consumed, distributed, or stored for consumption" in North Carolina. 105.164.6(1). A publisher selling a newspaper at retail other than through street vendors or paper-

Page 472 U.S. 1001 , 1002

boys escapes sales or use taxation on personal property that goes into the production of the newspaper, for that property is resold, see 105-164.13( 8); however, a sales tax must be paid on the final retail sale of such a newspaper. A newspaper that is sold through street vendors or newsboys escapes both forms of taxation: the publisher's purchase of personal property that goes into its final product is exempt, as such property is resold, and its retail sales are also exempt under 105-164.13(28).

In this case, the Supreme Court of North Carolina held that this tax scheme, as applied to newspapers ineligible for the exemption, neither abridged the freedom of the press nor violated the Equal Protection Clause . The court pointed out that the North Carolina sales and use tax scheme did not single out the press for special treatment, but applied to retail sales generally. In re Assessment of Taxes Against Village Pub. Corp., 312 N.C. 211, 322 S.E.2d 155 (1984). Thus, it was free from one of the primary defects of the tax struck down by this Court in Minneapolis Star & Tribune Co. v. Minnesota Comm'r of Revenue, 460 U.S. 575 (1983). That the statute contained an exemption for newspapers sold through street vendors and newsboys did not make it invalid: such an exemption required only a rational basis. The court found such a rational basis in the difficulty of requiring street vendors and newsboys-many of them children-to collect the sales tax. This difficulty, not present when a paper was sold through other means or given away free, justified the special exemption.

This case is within our mandatory appellate jurisdiction under 28 U.S. C. 1257(2). Appellant argues that the North Carolina tax scheme, by singling out one segment of the press for a special exemption from taxation, violates the First Amendment and the Equal Protection Clause. In summarily dismissing the appeal, the Court today holds these arguments " insubstantial." In view of Minneapolis Star, supra, I cannot agree.

The statute at issue in Minneapolis Star not only singled out the press for special treatment, but also drew distinctions among members of the press, subjecting some to a tax while exempting others. The Court found both features objectionable. Concerning the second defect, we stated, "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 Minnesota can jus- [472 U.S. 1001 , 1003]


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