63 N.Y.U. L. Rev. 810 (1988)
A Tax on Advertising: First Amendment and Commerce Clause Implications

handle is hein.journals/nylr63 and id is 826 raw text is: NOTES
A TAX ON ADVERTISING: FIRST AMENDMENT
AND COMMERCE CLAUSE IMPLICATIONS
INTRODUCTION
Recently, the constitutionality of a state tax on advertising received
significant media attention. On April 23, 1987, the state of Florida en-
acted a bill extending Florida's sales tax to previously untaxed services,
including advertising.' This tax on services prompted an onslaught of
lobbying, boycotts, and litigation opposing it.2 The Florida legislature
finally succumbed to this pressure and repealed the tax on December 10,
1987.3
Although Florida was the first state actually to enact a tax on adver-
tising, it will likely not be the last.4 Many states tax some services,5 and
at least twenty-one states have investigated expanding their sales tax to
include advertising and other services.6
The increasing interest in taxing services such as advertising is easy
to explain. Florida is prohibited by its state constitution from charging
an income tax,7 as are several other states8 which therefore need to find
other means of raising revenues. Although the service sector is the larg-
est growing area of the economy, most services are not subject to taxa-
tion.9 Therefore, the taxation of services is a logical area to explore as a
source of revenue. A tax on advertising can be particularly advantageous
because, unlike some other taxes, such as a corporate income tax, it ap-
plies not only to those companies headquartered within the state, but also
I An Act Relating to Taxation, 1987 Fla. Laws 6 (repealed 1987).
2 See Klott, States Study Florida Actions, N.Y. Times, Sept. 29, 1987, at D2.
3 An Act Relating to Taxation, 1987 Fla. Laws 548.
4 See Freedberg, Fate of Florida's Tax on Services May Make Other States Go Slow, Wall
St. J., Sept. 21, 1987, at 1; Klott, supra note 2, at D2.
5 The states which tax the broadest range of services are Hawaii, Haw. Rev. Stat. § 237-
7.23 (1985) (tax imposed on all activities engaged in for consideration), New Mexico, N.M.
Stat. Ann. § 7-9-3(f) (1986) (imposing gross receipt tax on the total amount of money or the
value of other consideration received... from performing services in New Mexico....), and
South Dakota, 1986 S.D. Laws § 10-45-5 (tax imposed on 24 services listed including barber-
ing, car washing, tire recapping, and cable television).
6 See Brannigan, Repeal of Florida 5% Service Tax Caps Controversy Other States
Viewed Warily, Wall St. J., Dec. 11, 1987, at 8.
7 Fla. Const. art. VII, § 5.
8 See, e.g., Tenn. Const. art. 2, § 28.
9 Freedberg, supra note 4, at 1.
810

Imaged with the Permission of N.Y.U. Law Review

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