677 New Loudon Corporation v. New York Tax Appeals Tribunal

19 N.Y.3d 1058 (N.Y. Ct. App. 2012), cert. denied, 134 S. Ct. 422 (2013)


In October 2013, the Supreme Court declined to weigh in on whether the state of New York can discriminate in taxation among First Amendment-protected materials based on the perceived value of their content.

Media Coalition submitted an amicus brief asking the Court to grant certiorari in 677 New Loudon Corporation v. New York Tax Appeals Tribunal.


Lower court rulings

New York imposes a 4 percent sales tax on “places of amusement” but has an exemption from the tax admission charges for “dramatic or musical arts performances.” New Loudon operates a venue that provides entertainment consisting of dance performances that include nudity. They filed a petition with the New York Division of Tax Appeals, arguing that they should be exempted from the tax because they fall under the “dramatic or musical arts performances” exception. In addition, they argued that a content-based tax violates the First Amendment.

An administrative judge ruled in favor of New Loudon, finding that the exception should apply to them. The judge did not find it necessary to rule on whether the tax was constitutional.

The state of New York appealed the judge’s ruling to the Tax Appeals Tribunal. The tribunal reversed the decision, holding that the dance performances in question did not rise to the level of “composing ballets and other dances.”

New Loudon appealed to the New York Court of Appeals. The court upheld the tribunal’s decision [3], finding that the “evident purpose” of the tax exemption was to promote “cultural and artistic performances” and that the nude dance performances did not qualify as such. The court also found New Loudon’s argument about the constitutionality of the tax “unavailing.”

Judge Robert Smith dissented, joined by Chief Judge Jonathan Lippman and Judge Susan Read. Judge Smith writes, “The ruling of the Tax Appeals Tribunal, which the majority upholds, makes a distinction between highbrow dance and lowbrow dance that is not to be found in the governing statute and raises significant constitutional problems.” He goes on to contrast the tax with one, for instance, that would apply to Hustler magazine but not the New Yorker, noting, “That sort of discrimination on the basis of content would surely be unconstitutional. It is not clear to me why the discrimination that the majority approves in this case stands on any firmer constitutional footing.”

Media Coalition files amicus brief

On July 5, 2013, New Loudon filed a petition for writ of certiorari [4]. The petition asked the Court to decide whether a state may discriminate in taxation among First Amendment-protected materials, based on the perceived value of their content.

On August 6, 2013, Media Coalition submitted an amicus brief [1], asking the Supreme Court to grant certiorari and hear the case on the merits. The amicus brief expressed concern that the New York Court of Appeals’ decision could allow the state to punish unpopular or disfavored speech by taxing it. “To avoid discriminatory taxes, [booksellers, librarians, video stores and publishers] should not have to consider whether state or local officials will think that what they publish, distribute and sell has cultural or artistic value. The First Amendment protects them from such a duty,” the brief said.

The amicus brief was signed by: American Booksellers Foundation for Free Expression; Association of American Publishers; Comic Book Legal Defense Fund; Entertainment Merchants Association; and Freedom to Read Foundation.

Supreme Court denies certiorari

On October 15, 2013, the Supreme Court denied New Loudon’s petition [2].

Last updated: Sep 30, 2015