A group of Apache Junction artists, long hoping to spark a renaissance of sorts, is now threatening to sue the city on grounds of violating the First Amendment. The bone of contention? The city’s insistence artists selling their creations get business licenses and, like any other business, collect sales taxes from buyers.
The issue has divided the Apache Junction artist community, with many siding with the city, saying there is no reason for them to be treated any differently.
Steve White and Ernie Imbeault, two of the artists strongly opposed to the city’s regulations, say regardless of whether they display or sell their artwork, the license and tax requirements violate artists’ right to free speech.
Citing two federal court rulings as the backbone for their argument, they insist there is no federal law supporting Apache Junction’s rules.
“The city cannot force me to get a license or pay a tax to express myself,” White says. “What happens to my fundamental right to free speech?”
Imbeault, who creates sculptures and paintings of American Indian period art, says he’s against people trying to tax his “ideas and emotions.”
Apache Junction City Attorney Joel Stern disagrees, saying those court rulings do not apply in this situation because there’s no discrimination on the basis of content, nor did the legal decisions address the issue of charging tax.
Artists simply displaying their creations don’t need a city business license, but if they sell their art, they do need the license and must also pay tax for that transaction.
The city also requires nonprofit groups to get business licenses, although they’re not required to pay the $50 fee.
“Everyone is absolutely allowed to express their First Amendment right and display their art,” Stern says.
Mayor John Insalaco says he doesn’t understand why artists should be exempt from paying tax.
“I have rights, too. We all have rights. I do work and every job I do is a creation, but I’m selling my labor and material, I’m selling my work and paying the license,” Insalaco says.
He adds that the City Council is following Stern’s advice.
Keeping the threat of a lawsuit in mind, Apache Junction spokesman Pat Brenner said it’s prudent not to discuss the matter until city officials know more about the potential litigation.
In a case against Sparks, Nev., White had challenged the city policy of allowing the limited sale of merchandise in public parks based on city employees’ pre-approval of the sale of some items based on content. The U.S. Ninth Circuit Court of Appeals ruled it was unconstitutional for Sparks employees to select artists based on the message conveyed in their art. The court also agreed White’s original creations expressed a message, regardless of whether or not they were sold, thereby protecting them under the First Amendment.
“That decision makes it clear that whether I sell or give away my art does not diminish my First Amendment protections,” White says.
An earlier Ninth Circuit Court case in Los Angeles held a municipal ordinance violated the First Amendment rights of two artists by not allowing them to sell merchandise while making exceptions for nonprofits and news vendors solely on the basis of their message.
White says that it’s not just Apache Junction, it’s cities and states across the country that are infringing on artists’ rights to sell original artwork.
“Nonprofits are allowed to sell merchandise without the licensing and tax policies because of their ‘message.’ Artists are also selling a message,” White says.
Stern maintains that unlike in the Nevada case, this situation is different because the city is not forcing anyone to get a license before an actual sale, so it’s not a case of prior restraint.
“We don’t make them get a license upfront. But I’m saying, when they make a sale, under the law they have to give the city the 2.2 (percent) sales tax. For regular artists who have shops, they get the license; they don’t play these games,” Stern adds.
The city attorney also points out the rulings don’t address the issue of charging sales tax.
Adam Chodorow, an Arizona State University professor and a tax law expert, also says that it appears the Ninth Circuit case was more about the issue of free speech than about taxes.
He adds that the federal tax system allows certain organizations to be tax-exempt.
“One could not escape federal income tax on the sale of self-created art under the claim that such sales were part and parcel of protected expression and that the rules relieving tax-exempt organizations from tax are discriminatory under the First Amendment,” Chodorow says.
He adds that constitutional concerns could potentially be raised using facts on taxes and exemptions.
“However, I don’t see these facts giving rise to a winning argument,” Chodorow says.
The city has a way out if it adopts Option X from the Model City Tax Code, which outlines local sales tax administration. Option X allows artists to sell self-creations of no utilitarian value without paying city taxes. So, for instance, a painting would be exempt from the tax but jewelry, which can be worn, would not. Resellers like galleries cannot get that break. Seven Arizona cities, including Mesa and Tucson, have adopted Option X.
But Stern says there’s no federal law requirement to adopt Option X.
“It’s just like how it sounds — it’s an option, not an obligation,” Stern says.
Other local artists don’t buy into the artists’ distinction.
“It’s kind of elitist to say those who do utilitarian art like jewelry are not artists,” says artist Scott Taylor.
Linda Hilton, a jewelry maker, also believes that option is discriminatory.
“If something decorates your wall that’s exempt, but if it decorates your neck it’s not,” Hilton says.
Tax or not, these artists say the primary concern is for the overall artist community.
Both Taylor and Hilton say the fight is over a false cause.
“I think their attitude is wrong and I also think their conclusions are wrong. These people are stretching their rights to areas where it doesn’t apply at all,” Hilton says. “I don’t want someone like Steve White to give all artists a bad name, that all artists are ready to jump into court to sue somebody.”
Taylor says small communities depend on sales tax, so it’s best for everyone to pool in.
“These people want to go and have free art shows while the rest of us go out and get the right licenses,” Taylor says.
White and Imbeault, meanwhile, have other concerns.
There are accusations of threats from city officials and of being spied on in community parks while organizing ad-hoc art displays.
“We were just showing our artwork, but there was someone with a camera lurking behind bushes, taking photos of artists, to see if they could catch them selling anything,” White says.
That, he adds, has kept seniors and children only wishing to get together and display their artwork away from community parks.
Stern says maybe someone took it on themselves to do that at some point.
“I certainly don’t do that or ask anyone to conduct such activities,” Stern says.
Both artists accuse city officials of threatening them with citations, fines and prosecution if they are “caught selling our First Amendment-protected expression in Apache Junction.”
Stern says things are unpleasant because White has been “harassing” city employees.
“I’ve had employees tell me they’re afraid of his tone. They wanted protection from him and I had to send him a threatening letter,” Stern says.
He adds that both Imbeault and White are legitimate artists and certainly are passionate.
“They think they have a cause but they don’t,” Stern says.