Syndicate fights state’s attempt to tax cartoons

07/03/95

CALIFORNIA–Creators Syndicate said in late June it will take legal action against California if the state tries to enforce a tax on the sale of political cartoons and comics.

Last December, the state Board of Equalization’s Culver City office launched a massive audit of Creators’ finances to determine the syndicate’s potential tax liability.

Brian Oxman, counsel for Creators, said the state went so far as to threaten shutting down Creators’ Los Angeles offices.

The BOE contends that, under California law, any “finished product for reproduction” is taxable to the buyer. That includes all art work, from paintings to cartoons. The state does not tax written words, such as political commentaries or distributed wire service stories, and has not applied the tax to works of art.

Oxman said he made an elaborate presentation to the BOE’s Culver City office in early April. He argued that the BOE has singled out cartoons for enforcement of the tax, which violates the syndicate’s First Amendment rights by discriminating based on content.

In addition, Oxman said, the state never before has attempted to tax comics and cartoons, and no other state has a similar tax provision.

The Culver City office said it referred the case to the BOE’s main office in Sacramento for review. Oxman said he has contacted the Sacramento office by phone and mail repeatedly to learn of the BOE’s decision, but as of late June had received no reply.

The BOE contends that the tax has been on the books for a long time, and enforcement would not infringe on constitutional rights.

If the BOE attempts to collect the tax from Creators, the syndicate will file suit in federal court, Oxman said.

The BOE would not comment on the specifics of the case.

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