The Ohio Supreme Court recently held that Cincinnati’s billboard excise tax is unconstitutional because the tax violated the First Amendment of the United States Constitution, finding that Cincinnati’s need to raise revenue by imposing the tax solely on a small number of billboard operators did not survive strict scrutiny.
In 2018, the Cincinnati City Council passed an ordinance which imposed an excise tax on advertising hosts with advertising signs in the city. Many types of signs were excluded, effectively targeting a small group to bear most of the tax burden. Two billboard operators challenged the ordinance, arguing that the tax violated their First Amendment rights to free speech and freedom of the press.
The Court reviewed US Supreme Court decisions that applied the First Amendment to state taxes and distilled four principles: (1) the press may be subjected to a generally applicable tax; (2) a tax is unconstitutional if an official must look at the content of speech to determine whether the tax applies to it; (3) a tax that selectively singles out the press or targets a small group of speakers creates the danger that the tax will be used to censor speech; and (4) it is not necessary to prove that the purpose of a tax is to suppress or punish speech to establish that the tax violates the First Amendment. Although Cincinnati had an interest in raising money to support local government, the tax did not survive strict scrutiny because it burdened activities protected by the First Amendment, created a potent tool for censorship where the council had already previously requested to remove messages with which they disagreed and there were alternative means of achieving the same interest. Finally, the Ohio Supreme Court acknowledged that Maryland’s high court recently came to the opposite conclusion and upheld Baltimore’s imposition of a tax on billboards. Clear Channel Outdoor, Inc. v. Dir., Dept. of Fin. of Baltimore, 472 Md. 444, 247 A.3d 740, cert. pending, No. 21-219 (2021). The Ohio Court was not persuaded by Clear Channel.