MediMarts, Inc., a marijuana dispensary, sued the City of San Jose, to prevent it from enforcing its ordinance imposing its Marijuana Business Tax and requiring MediMarts to submit tax returns disclosing the amount of its sales of cannabis-containing-products, on the grounds that it violated MediMarts’ Fifth Amendment right against self-incrimination. Unlike the First Amendment right to free speech which the U.S. Supreme Court has held applies to corporations, it held in 1906 that the Fifth Amendment right against self-incrimination does not apply to corporations.
Local, state and federal governments can’t exist without taxes. If taxes are going to be assessed in proportion to gross revenues, like sales taxes, value-added-taxes (VATs) or business license taxes, or net income, like income taxes and property taxes on income producing properties where assessed value is based on a multiple of net income, then income information must be disclosed in order to assess the tax. If the business activity is an illegal one, then the tax return is going to reveal the volume of the illegal activity. That’s an unavoidable necessity, if the government is going to rely on any of these taxes, Of course, the Supreme Court figured out a way to make that happen.