FY 2020 Budget (H 5151 Article 5, Section 9)

Article 5, Section 9 of the first version of the proposed FY 2020 budget included, amongst other potential taxes on "services," a proposed 7% sales tax on "lobbying services." We argued in both Senate Finance and House Finance Committees that this tax amounted to a direct  levy on the exercise of political speech, a quintessential First Amendment activity. We further noted that by solely applying this tax to lobbying, and not any peripheral services related to it, such as public relations or political consulting, the core exercise of the First Amendment right to petition government for the redress of grievances was particularly being singled out for adverse treatment. The proposal also allowed the "dues" of organizations engaged in lobbying services to be taxed. Our testimony noted that this budget provision could have a significant fiscal impact on many non-profit organizations that engage in lobbying, including the ACLU itself. This provision was ultimately not included in the revised budget proposal.