Outdoor is suing the city of Baltimore in federal court over a new municipal tax on billboards which charges $5 per square foot for static billboards and $15 per square foot for digital displays.
Lawyers for Clear Channel, the city’s dominant out-of-home advertiser, plan to argue that billboard advertising is shielded from this form of taxation by the First Amendment’s
provisions protecting free speech, according to The Baltimore Sun
, which first reported the news.
The city’s lawyers plan to argue that the tax is not unconstitutional
since it makes no effort to police speech by regulating what content may appear on billboards. Instead, they say it is merely intended to generate revenue while mitigating adverse effects from
billboard clutter, including distracted driving and aesthetic impacts.
The billboard tax -- which took effect July 1 -- is expected to generate about $1 million in annual revenues for
the city, principally from Clear Channel Outdoor. Like other outdoor advertising companies, Clear Channel already pays property taxes of about $600,000 a year to the city of Baltimore, as well as some
rental fees to property owners. They in turn pay tax on this rental income. In other words, the city government may be trying to tax the same thing twice.
Clear Channel had previously
offered the city over $1 million in free outdoor advertising if it would withdraw the billboard tax, but this proposal was nixed by the city government, which needs cash to fill a budget shortfall of
around $30 million. At the same time, Clear Channel warned that it may decide not to carry free PSAs in Baltimore if the tax stays on the books.
This isn’t Clear Channel
Outdoor’s only legal battle with a municipality.
Along with CBS Outdoor, Clear Channel is currently fighting to overturn a decision by a California Superior Court banning 77 digital
billboards in Los Angeles. In April, the court ruled that a deal struck by the operators with the Los Angeles City Council in 2007, allowing the conversion of hundreds of static billboards to digital
displays, violated the city’s own laws