Tennessee Senate Bill 2860 and House Bill 3081


Tennessee Senate Bill 2860 and House Bill 3081 would impose a 25% sales tax on:

  • any material that is illegal to display to minors;
  • any product bought or rented in any store that has an “adults only” section, regardless of whether the material bought or rented was sexually frank or not; and
  • any movie with “sexually explicit” content viewed on cable or satellite television or in a hotel or motel.

“Sexually explicit” movie is not defined in the legislation or by reference, other than to specifically exempt any movie rated “R” or “NC-17” by the rating board of the Motion Picture Association of America.

Enforcement of these provisions is to be determined by the Commissioner of Revenue.


The Tennessee legislature has adjourned its 2012 session without passing either bill. Both bills are dead.


As applied to speech, the legislation is likely unconstitutional as it singles out the press, regardless of the nature of the content being taxed. The Court has held that the First Amendment is not limited to barring criminal sanctions against speakers. It bars the state from taxing the press, whether as a whole or as individual speakers, unless the tax is generally imposed. It also bars the state from placing a special burden on retailers or producers of First Amendment-protected material, such as requiring a special license that is not otherwise imposed on businesses generally.

Imposing a tax on speech based on its content is also unconstitutional. To determine what material is taxed, the state would have no choice but to scrutinize the content of the material sold or rented. The Supreme Court has held that such official scrutiny of the content of speech as the basis for imposing a tax is incompatible with the First Amendment. In another case, the Court also held that the state cannot punish a producer or retailer of such material by imposing a substantial additional tax on it, finding that the power to single out the press with special taxes could be used to coerce or even destroy it.

The provision that applies on tax on certain movies is also likely unconstitutional as a sales tax on a single medium. The Court has condemned the selective imposition of a punishment on one medium but not others, or specific portions of a media but not others. Furthermore, the provision lacks a definition for “sexually explicit” content, which makes it unconstitutionally vague. The vagueness will have a significant chilling effect on protected speech, as customers will seek to avoid content that is subject to an expensive tax and will opt not to view anything that could conceivably be considered “sexually explicit.” Cable and satellite providers will likely avoid programming that is subject to the tax or is less likely to be purchased. Retailers and television providers have little guidance to determine what speech is protected and what is subject to prosecution and must either risk an onerous tax or self-censor the speech they make available to their customers.

In addition, Tennessee cannot let the MPAA’s rating system determine whether or not a tax applies to movies. While voluntary ratings exist to help parents determine what is appropriate for their children, government enforcement or adoption of an existing rating system is constitutionally impermissible. Several courts have struck down laws that either enforce the MPAA’s rating system or financially punish a movie that carries specific rating designations.

The legislation is also unconstitutional with regards to the provision that gives authority to the Department of Revenue to determine what material is “harmful to minors.” It is the job of the courts to determine whether material meets this definition and establishes that such material is illegal for minors, not an owner of a book or video store or a staff person in the Department of Revenue. These bills do not allow for any court proceeding to determine whether particular books, magazines, movies and other content would trigger the surcharge. This means there are no due process safeguards in place for the retailer or distributor of the content. The Supreme Court has made clear that a state cannot create a non-legal process for determining if material is illegal for minors (or adults).

Finally, the definition of “adult business” in the bills is likely unconstitutional as well. The government has the power to regulate the “secondary effects” of sexually oriented businesses and may define such a business for that purpose, but the Supreme Court has established limits on this power:

  • the regulation must be designed to further an important or substantial government interest;
  • the governmental interest must be unrelated to the suppression of speech; and
  • the regulation must be narrowly tailored to further the government interest in preventing the unwanted secondary effects.

The purpose of the designation in these bills is nothing more than a vehicle to allow for the imposition of the 25% tax on any purchase or rental of any goods, including books, magazines, movies, video games or sound recordings. There is not even a mere pretense that it is meant to regulate sexually oriented businesses.

Even if the legislation was meant to control secondary effects, the threshold to designate a business as an “adult business” is so low that it would be deemed overbroad. Typically, courts require that a business can be deemed an “adult business” if sexually explicit material represents a substantial or significant portion of its stock and trade. Here, any retailer that has an “adults only” section would be swept into this regulation, even if only a small amount of its stock is adult material. This inevitably would result in many mainstream retailers being considered “adult businesses” even though they do not cause “secondary effects.”

History – S.B. 2860

  • On January 24, 2012, the bill was introduced [2] and referred to the Senate Committee on Finance, Ways and Means.
  • On February 27, 2012, Media Coalition submitted a memo [1] to the committee, explaining the constitutional issues with the bill.
  • The committee held hearings on the bill on February 28, 2012 and March 13, 2012. The committee took no action after either hearing.
  • The Tennessee legislature adjourned its 2012 session. The bill is dead.

History – H.B. 3081

  • On January 24, 2012, the bill was introduced [3] and referred to the House Committee on Government Operations.
  • On February 27, 2012, Media Coalition submitted a memo [1] to the committee, explaining the constitutional issues with the bill.
  • The committee held a hearing on the bill on February 29, 2012. The committee recommended the bill be passed. The bill was referred to the House Committee on Finance, Ways and Means.
  • The Tennessee legislature adjourned its 2012 session. The bill is dead.

Last updated: Aug 24, 2015