Minneapolis Star v. Minnesota Commissioner of Revenue

The ruling found that state tax systems cannot treat the press differently than any other business unless substantial justification exists. The state of Minnesota could demonstrate no compelling reason to justify imposing a special use tax on a select few newspaper publishers. Therefore, the tax was in violation of the First Amendment's Press Clause. The ruling was unique in subjecting state laws to strict scrutiny based on mere potential for censorship.

In 1967, the Minnesota state legislature established a general system of taxation including a sales tax on the retail sale of most goods and a use tax applied to certain personal property for which a sales tax did not apply. Initially, the Star Tribune newspaper, published by the Minneapolis Star & Tribune Co., was exempted from the sales and use taxes as were other news periodicals. But in 1971, the state legislature revised the tax system by imposing a use tax solely on the cost of paper and ink products used in their publication. In 1974, the legislature further revised the law by exempting the first $100,000 worth of ink and paper used by a publication in a calendar year. In effect, the special use tax applied only to the publications with largest circulations. As a consequence, only 14 of the 388 circulation newspapers in Minnesota were assessed use taxes in 1974. The Star Tribune, having the largest circulation in the state, paid approximately two-thirds of the total amount of ink and paper tax assessed statewide.

The Star Tribune subsequently filed a lawsuit challenging the constitutionality of both the use tax and its exemptions. The newspaper also sought a refund for use taxes paid for 1974 expenses and part of 1975. In 1981 the Minnesota Supreme Court held that the use tax did not violate the Constitution due to the lack of any censorship intent by the state.