In the 1930 case of Educational Films Corporation of America v. Ward, Attorney General of New York, et al., the US Supreme Court ruled on a dispute over taxation. The Educational Films Corporation produced motion pictures for educational purposes and claimed that it should be exempt from state franchise taxes because its films were used for educational purposes rather than commercial entertainment. However, the State Tax Commission assessed tax against them under Article 9-A (the Franchise Tax Law) which imposed a tax upon corporations for "the privilege of doing business" in New York State. The corporation argued this violated their Fourteenth Amendment rights to equal protection under law as they were being unfairly targeted compared to other businesses not taxed in such manner. The court upheld the decision by lower courts stating that there was no violation or discrimination since all corporations conducting business within New York are subject to this tax regardless if they make profit or not; moreover, education is not an exception when it comes to taxation laws unless explicitly stated otherwise by legislation.

In the dissenting opinion for Educational Films Corporation of America v. Ward, Justice Holmes argued that New York's tax on films did not violate the Fourteenth Amendment because it was a general business tax rather than a direct restriction on free speech. He reasoned that while films may be used as a medium for ideas and opinions, they are also commercial products sold for profit like any other commodity. Therefore, he believed they should be subject to taxation just like any other form of business enterprise. Furthermore, he contended that if every law affecting businesses involved in communication were subjected to strict scrutiny under the First Amendment, it would unduly limit states' power to regulate commerce within their borders.