The highest court in Maryland upheld a billboard tax enacted in 2013 by the Baltimore City Council. It was a 6-1 decision. You can read the decision here.
The original Ordinance required a tax, assessed annually based on the size and type of display: $15 per square foot for an electronic display and $5 per square foot for any other display. Displays to be taxed were defined as outdoor display of a 10 square foot or larger image or message that directs attention to a business, commodity, service, event, or other activity that is: (i) sold, offered, or conducted somewhere other than on the premises on which the display is made; and (ii) sold, offered, or conducted on the premises only incidentally if at all. The City indicated that the sole purpose of the Ordinance was to generate revenue for the City.
Shortly after the City enacted the Ordinance, Clear Channel Outdoor sought to have it struck down as unconstitutional. An initial foray in federal court failed on jurisdictional grounds. Clear Channel then pursued a refund of taxes paid to the City under the Ordinance, citing the same constitutional grounds. That effort resulted in litigation in State courts and the eventual review by the Court of Appeals of Maryland.
The Court of Appeals held that the Ordinance was constitutional as it did not violate the First Amendment. The Court felt Clear Channel’s argument that billboards are like the press seemed to be a bit of a stretch. In dissent Judge Getty felt that Clear Channel did make the case that the City tax raised constitutional issues. In the dissent the Judge quoted former Senator Barbara Mikulski, D-Maryland, whose quotes were recently highlighted in Billboard Insider.
Insider’s Take – Clear Channel has some time to evaluate and determine their next step, which would be a Supreme Court review. The 6-1 verdict is going to be a factor in their decision. We understand that providing news on taxation may not be the most upbeat reading, but as one large city reaches success on taxation, so goes other big cities (like Cincinnati).
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