The paper explores the broadening of the tax immunity in article 150, incise VI, letter “d” of the brazilian Federal Constitution with a view to reach e-readers. Through study of the constitutional history of the norm, it elaborates a definition for tax immunity for the purpose of interpretation. The paper defends using a three-part hermeneutic method to get the essence of the immunizing rule, targeted to the guarantee of access to culture and knowledge. It develops a doctrinal and judicial analysis of the immunity towards popular e-readers, with the purpose of determining characteristics of inclusion in the constitutional rule. In the end, the paper proposes the use of preponderance as a means to evaluate how close or distant these devices are in the eyes of the concepts brought by the Constitution.
There is a revolution on the streets. Away from armed crowds and battle cries, it walks to the beat of silence: its enthusiasts are quietly seated. The revolution, however modest, is an attack to one particular tradition, seemingly protected by the comfort and convenience of many. Among clicks, finger touching and hand gestures in mid-air, Ernest Hemingway and Clarice Lispector talk to their public. The New York Times and Le Monde are searched for updates, for all sorts of information. Thousands of the most acclaimed best sellers in the whole world occupy deserted shelves, empty rooms. People just walk in and experience an unprecedented transformation in the habit of reading: literary works become e-books. And thousands of them fit in the palm of our hands thanks to a technological wonder called e-reader.
With sales in the millions, the e-reader market is leading a considerable change in the way we read and explore literature. Analysts point out to the practicability and sustainability of these devices – vast libraries would be reduced to virtual files, facilitating the access to information; also, entire forests would be spared as a consequence of reducing the demand for paper. Add to these benefits the low cost of e-books and even the gratuity of several literary classics. With enough room for 1500 files, Barnes & Noble’s Nook costs 149 dollars. Kindle Wi-Fi came to stores with capacity for 3500 e-books and costing 139 dollars. To purchase this e-reader on the Internet, any person in Brazil would have to spend 550 reais. Over half of that amount is due to taxation by Import Tax (II), Industrialized Products Tax (IPI) and Merchandise and Services Circulation Tax (ICMS).
It is evident that Brazil and its tax burden have brought to a bustling revolution a cost-benefit standstill. Which would be the best option for occasional readers? Would it be the acquisition of three or four books per year or the purchase of a gadget with immense capacity, but for a significantly higher price? These are unusual doubts among industries immune to taxation for over twenty years – their immunity comes from article 150, incise VI, item “d” of the Federal Constitution of 1988 (BRAZIL, 1988). We know that e-books are files representing printed books, newspapers and periodicals in their substance – these bits of information are then protected by the Constitution and, therefore, must be immune to tax. Could the same treatment be extended to e-readers? How does the brazilian legal system see these devices? Such questions do not find satisfying answers in brazilian legal doctrine or in most of its jurisprudence.
This paper has the premise of investigating tax immunity on books, newspapers and periodicals and on the paper used for their printing in Brazil. Its purpose is to suggest solutions that extend the application of the constitutional rule to the phenomenon of e-readers, allowing for the endurance of the tax immunity through use of teleological or constructive interpretation. The analysis of characteristics of the most popular e-readers will be conducted under the perspective of the immunizing rule, so as to identify criteria of exclusion of its non-incidence structure.
The first chapter deals with the concept of tax immunity according to article 150, incise VI, item “d” of the Federal Constitution of 1988. It investigates the constitutional history of this subject since 1934 until the present magna carta. Also, it uses legal doctrine to define the immunizing rule as an essential part of a democratic system concerned with upholding fundamental rights.
The purpose of the second chapter is to study the interpretation of the immunity on books, newspapers, periodicals and the paper used for their printing as an inseparable element of the brazilian legal framework. Through the analysis of hermeneutical methods employed by legal doctrine and jurisprudence to comprehend tax immunities in general, it stipulates a form of triangular interpretation – from the systematic, teleological and constructive standpoints – to properly measure the immunizing rule of article 150, incise VI, item “d”, of the Federal Constitution.
In the third chapter, the immunizing rule is faced with opening its doors to e-books and e-readers alike. Legal doctrine and jurisprudence are used as auxiliary means to fitting different e-readers to the real objective of the tax immunity. Also, the preponderance criterion is introduced as a determining element in evaluating the exclusion of certain e-readers and similar gadgets from the maximum reach of the constitutional norm.
The conclusion points out to the future of access to information on the planet, leading to the necessity of preserving the applicability of article 150, incise VI, item “d”, of the Federal Constitution upon the eventual “vanishing” of printed books, newspapers and periodicals.
1 TAX IMMUNITY ON BOOKS, NEWSPAPERS, PERIODICALS AND ON THE PAPER USED FOR THEIR PRINTING
Canotilho (2003, p. 1440) explains that one of the classical roles of the Constitution is the “guarantistic”, related to the conformity of the sovereign power to fundamental rights and guarantees. Its performance is as outstanding as its instruments are effective: norms safeguarding the right to education, warranting the access to Justice, norms which prioritize equality – they are pillars on top of which the existential minimum is balanced, the common denominator of human dignity. Writing about this last stand of prerrogatives, Torres (2004, p. 68) points out that:
“The existential minimum, as a condition for freedom, entails the State’s positive measures of welfare and also contains the status negativus, of the fiscal immunities: the imposing power of the State cannot invade the sphere of minimum freedom of the citizens, represented by the right to subsistence.”
The writing of the magna carta is clear on the effect of some constitutional open principles or super principles. In fact, as it prevents the incidence of tax or the raising of tax rates without legal permission, the incise I of article 150 gives effect not only to the precept of article 5th, incise II of the Constitution: its purpose is to convey legal security, one of the guidelines of the Democratic State of Law. On the other hand, the same article 150 protects equality (incise II), property (incise IV) and the freedom of movement (incise V).
Article 150 reads some other tax immunities, and they are called immunities because of their constitutional standing. The very existence of such norms comes from the genesis of taxation: the State, exercising its full power to tax, subtracts the pecuniary property of citizens with the purpose of gathering the strictly necessary funds (ideally) for the provisions of public interest. This duty on the State precedes, however, the vesting in the power to tax – there is a preeminence of social objectives to the very structure of taxation. It is only fitting that these social objectives determine the exclusion of certain goods and rights from the taxable sphere in the Federal Constitution: the provision of the public interest will be a conjunction of taxing and not taxing, of collecting and abstaining from collection. The rules of competence stated in articles 145 and following also include the incompetence rules, which would be the tax immunities.
Among the phenomena immunized by article 150, incise VI, are the “books, the newspapers, the periodicals and the paper used for their printing”. The writing on item “d” contains two objective tax immunities, as well reminded by Velloso (2007, p. 189). The first is designed for books, newspapers and periodicals and the second is aimed towards the paper used for their printing. It is evident that the norm and its rules of incompetence protect the freedom of the press, the access to information and even the cultural and artistic publicity; however, the inclusion of that item in the Federal Constitution of 1988 is connected to the historical journey of that immunity as a guarantee to the public interest, to taxpayers in general. That is to say, in other words, that the understanding of such objective immunity has grounds on the constitutional history of Brazil.
1.1 The constitutional history of the tax immunity on books, newspapers, periodicals and on the paper used for their printing in Brazil
Upon establishing the immunity to taxation on books, newspapers and periodicals, as well as on the paper used for their printing, the constitutional text of 1987-1988 reiterates what was written before in article 19, incise III, item “d”, of the Charter of 1967 (altered by the Constitutional Amendment n. 1/1969). That guarantee, however, was less extensive in the Constitution of the United States of Brazil, published in September 1946 (BRAZIL, 1946). In its article 31, incise V, item “c”, the prohibition on imposing taxes is restricted to the paper used for the printing of newspapers, periodicals and books. The Constitution of 1937 (BRAZIL, 1937) did not mention this particular immunity, but in the previous magna carta there was a peculiar protection to “writers, journalists and teachers”, which allowed them to not pay taxes on any of their services (article 113, n. 36) – that benefit did not reach, however, the tax burden which at the time was imposed on the paper (HALLEWELL, 2005, pp. 150-152).
For the comprehension of the amplitude of the concept of immunity, it is necessary to take note of its constitutional past. Only then it is possible to ascertain the relevance of what is written in article 150, incise VI, item “d”, of the Constitution to the National Taxation System. In principle, one must remember that the Charter of 1934 suggested an artificial safeguard to the freedom of expression. That magna carta did not give Getúlio Vargas the necessary power to install dictatorship; the Constitution of 1934 (BRAZIL, 1934) was the consequence of the Constitutionalist Revolution of 1932, which culminated with the summoning of a Constituent Assembly and with the creation of a new Bill of Rights. In 1935, fearing a communist revolt, Getúlio Vargas decided to suspend its validity (through Law of National Security n. 38) and instate the Constitution of the United States of Brazil in 1937. The text then was restricted to concentrating the power in the hands of the Government, protecting it against all threats from opposing parties. This was a period of limitations to fundamental rights – the artificial immunity of 1934 was then replaced by the power (and a quite coercive power) to tax.
The Constitution of 1946, the first to immunize the paper used for the printing of books, newspapers and periodicals, was created in the third constitutional period of Brazil. Bonavides (2009, p. 367) notes that the country had emerged from the New State (or “Estado Novo”), which was “a governmental regime in which not even the Charter in force, of an extremely authoritarian nature, was obeyed by the people in power”. The military coup of 1945 came and, in December of the same year, the rising of Eurico Gaspar Dutra to the presidency followed. In 1946, the Constituent Assembly brought to brazilians a renewed Constitution of the United States of Brazil, which gave birth to the Third Republic and sustained the tax immunity on the paper used for the printing of books, newspapers and periodicals. The enactment of this norm happened amid an environment of pretense redemocratization, of apparent institutional renovation. In the words of Wolkmer (2003, p. 111), the Charter of 1946 “polarized the main political forces at the time with a bourgeois-nationalist arrangement between conservative forces and liberal reformist parties”. It is evident that the inclusion of the immunizing rule was not the result of a democratic effort, or not genuinely democratic: a combination of nationalist and economical interests led to the accidental protection to the access to information, although in a qualified manner and subject to censorship.
The immunity on paper resisted the unstable political situation in Brazil. Twenty years of economic abuse and retraction of the national industry came to an end with a new military coup, this time in 1964. João Goulart, former vice-president of Jânio Quadros and now President of Brazil, was deposed and fled to Uruguay; the Military Regime ensued, leading the country to focus on its relationship with the United States of America and on its coerced development. The Constitution of 1967 (BRAZIL, 1967) was born within this political scenario, following the enactment of the current Brazilian Tax Code (BRAZIL, 1966), which repeats the immunizing rule of the Charter of 1946 in its article 9, incise IV, item “d”. The constitutional text approved by the Constituent Assembly was published in January 1967 and it brought an addendum to this immunity, broadening its scope to benefit the production of books, newspapers and periodicals. Once again, the origins of the immunity were not linked to any specific privilege towards the access to information and the freedom of press; the taxation structure adopted by the taxpayers led to an environment of political centralization and administrative arbitrariness, which do not correspond to the Democratic Rule of Law. The elevation of the State was a crucial feature of the military period, a time of apparent progress of institutions and persistent economic decline.
The military regime ended in 1985, with the exit of João Figueiredo from office. The Constitution in force, however, was still the Charter of 1967 – then with the Constitutional Amendment n. 1/1969 (BRAZIL, 1969), which kept the objective immunizing rule. The first presidential election under the mandate of Figueiredo was carried out by indirect vote: the elected candidate, Tancredo Neves, passed away before taking office – his vice-president, José Sarney, became President of Brazil. The political situation in the country was still troublesome, with the military fearing the imminent redemocratization and the people in the streets campaigning for the right to an election via direct vote (in Brazil, the “Diretas Já!”). José Sarney had the task of installing a truly democratic electoral process, but he could not do it under the Amendment n. 1/1969. It was necessary to convert the Congress in a new Constituent Assembly, for the purpose of elaborating a new magna carta, now enacted by representatives of the people. This was the Constitution of the Federative Republic of Brazil of 1988, which brought in its article 150, incise VI, item “d”, the immunity previously stated under the Charter of 1967. In addition, it prohibited censorship (article 220, § 2) and allowed for the principle of taxpayers’ capacity to gain constitutional status (article 145, § 1).
The Constitution in force has not innovated in the Brazilian legal system with the prescription of tax immunity to books, newspapers, periodicals and to the paper used for their printing. However, until the reception of the objective immunity by Democratic Rule of Law, different motivations led the Constituent Assembly to protect the freedom of expression, the free access to information and to culture. This time around, the constitutional text as a whole is oriented to providing these immunities with means for effectively benefiting taxpayers in Brazil – the strict limitations to the power to tax, as well as the priority to the principles of tax legality and anteriority bring to taxpayers considerable protection.
In this context, the analysis of the immunizing rules must fit the history of the preceding tax immunities and, above all, the web of principles that support the Constitution of 1988. These are hermeneutical guidelines which will prove instrumental to elucidating the real purpose of the norm of incompetence to tax.
1.2 The concept of tax immunity in article 150, incise VI, item “d”, of the Federal Constitution of 1988
The most relevant tax immunities were placed in article 150, incise VI of the Federal Constitution of 1988. According to Ávila (2006, p. 286), tax immunity is “the (internal) suppression of a part of the power to tax by means of constitutional rule”. Carvalho (2005, p. 185) opposes that definition, as well as the case for the immunity as a mere limitation on the power to tax. Elaborating on the subject, he writes:
“We highlight the concept of tax immunity, solely and exclusively, with the support of legal elements intrinsic to its nature, which allows us to display it as the finite and immediately determinable class of legal norms, contained in the text of the Federal Constitution, that expressly establish the incompetence of political people of internal Constitutional Law for enacting rules instituting taxes that reach specific and sufficiently characterized situations.”
Because article 60, § 4, incise IV, of the Charter of 1988 states that the proposal of Constitutional Amendment intended to abolish individual rights and guarantees shall not be object of deliberation, we conclude that the tax immunity is an immutable clause of the Constitution in the Brazilian legal system – the greatest support to that conclusion comes from the conjunction of principles backed by each rule of non-incidence. Borges (1980, p. 184) agrees with this logic in his work about the essence of tax immunity in the constitutional text:
“Systematically, immunity allows for a safeguard to principles, main ideas or guidelines essential to the political regime. Consequently, one can say that immunities represent a bigger issue to Constitutional Law then to Tax Law. Analyzed by the scope of its purpose, its goal or objective, the immunity aims to protect certain principles which are fundamental to the regime, the integrity of ethical and cultural values acclaimed by the positive constitutional system and to isolate them from the interferences or disturbances of taxation.”
A recurring division in the legal doctrine, useful for the present study, is the one that separates tax immunities in subjective and objective tax immunities. The subjective immunity protects a specific person or entity; we will find a good example of that in article 150, incise VI, item “a”, of the Federal Constitution, which prescribes the incompetence related to taxing legal entities of internal Public Law, such as the Union, the States, the Municipalities and the Federal District. According to item “a”, therefore, the Union may not charge any of the States with the income tax, nor will it be possible for the States to demand the Municipalities with the payment of the sales tax (with respect to goods acquired by the Mayor’s office, for example). It is a kind of immunity that is concentrated in the immunized person, extending itself to activities performed by that person.
The objective immunity represents a more limited protection: it is what we find in article 150, incise VI, item “d”, which deals with the immunity on books, newspapers, periodicals and the paper used for their printing. The Charter of 1988 is not like its predecessor of 1934, which had excluded from taxation the writers, the journalists and the teachers. The incompetence rule is restricted to the objects in writing – not to entities dealing with them. A bookstore would be immune to the payment of sales tax, but not to income tax. Likewise, the immunity on paper does not stretch to the service of printing, which is taxed by the services tax. The objective immunity, according to Alexandrino and Paulo (2007, p. 122), is the immunity “that excludes the impositive competence to tax determined goods or operations”.
What would be, therefore, the best definition for the immunity in article 150, incise VI, item “d”, of the Federal Constitution of 1988? The answer lies in the objectives of the constitutional text. In fact, although in the past this particular immunity had served bourgeois and nationalist interests, now it is redirected to the protection of the freedom of expression. Along the lines of the Charter of 1946 and of the following magna cartas, item “d” made evident that the power to tax, as prescribed by the Constitution, would not reach the intellectual production in Brazil, as well as the access to information by all. That is the lesson of Coêlho (2005, pp. 386/387):
“There is a need to take away the taxes on education, culture and knowledge to release them from the burden of political influences, so that, through the book, through the press, the periodicals, there is possibility for free criticism of the governments without fiscal interference. For that, even the most basic materials, like the paper used for printing, is immune. Not because of its cost, but because the government could create obstacles to the freedom of the press, through tax barriers and contingencies.”
The illuminist silhouette conferred by the Constitution is attached to the subject of renovation and redemocratization that inspired national policies after 1985. The institute translates, in the words of Melo (2004, p. 134), the procedure peculiar to an authentic democratic regime. It is a copy of article 150, incise V, but designed for the dissemination of knowledge. Indeed, by declaring the incompetence of taxing entities to “establish limitations on the traffic of people and goods”, the constitutional rule acclaims the right to travel within and from the brazilian territory. The protection contained in item “d” of incise VI is like that: taking the freedom of expression as a main point, its benefits are directed to the instruments that make it a reality in the country.
Understanding item “d” involves literal analysis and, on the other hand, the assistance of different interpretations. Although jurisprudence has leaned towards the inflexibility of the constitutional text, recent decisions have admitted the extension of the objective immunity to other goods and products intrinsic to the activities of the press, to the editing and publishing process, and, in a general way, to the dissemination of knowledge. In principle, for example, the inclusion of the photographic film in the field of non-incidence was inconceivable; the brazilian Supreme Court (Supremo Tribunal Federal), however, issued in 2003 the Súmula 657 (BRAZIL, 2003), which states: “The immunity stipulated in article 150, incise VI, item “d”, of the Federal Constitution, includes the photographic films and papers necessary to publishing newspapers and periodicals”. The measure of the tax immunity on books, newspapers, periodicals and the paper used for their printing, therefore, relies on the interpretation given by the legal doctrine and by jurisprudence to the borders of protection in the constitutional text to the ultimate purposes of the immunizing rule.
2 THE INTERPRETATION OF THE IMMUNITY ON BOOKS, NEWSPAPERS, PERIODICALS AND ON THE PAPER USED FOR THEIR PRINTING
The legal writing on item “d” is not sufficient for the complete understanding of the constitutional text. Not even the discernment of the norm as an inseparable part of a logical legal system elucidates the ultimate goal of the immunizing rule. To confer to the text of the Charter of 1988 the effects intended by its guiding principles, it is necessary for the interpreter to take a step further: the hermeneutical tools will serve him as accessories for the understanding of what item “d” entails and what it does not. The conflict between both fields of semantic connotation is palpable: if, by one side, along the lines of an old legal maximum, the interpreter cannot distinguish where the law itself has not done so, by the other, one shall not neglect what Falcão (2004, p. 224) designates as “content of justice potentialities”. The constructive interpretation extends the lexical-normative component to the protection of the public interest, addressing “the concerns and needs of people in each time”.
It is certain that the question of the tax immunity on e-readers demands an interpretative effort, since the original text of the Constitution was published before the implementation of the existing technology. The intention is not to grant some sort of blind protection to these devices; Alexandrino and Paulo (2007, p. 133) remind us that the immunity to “electronic means” was expressly rejected by the project of the current magna carta. One must remember, however, that certain “vehicles of electronic information” had not yet been incorporated into the everyday life of brazilians in the years of 1987-1988. The extension of the immunity, even though beneficial to the press, would represent to the Government a waiver of tax income from a sector of the industry in continuous revolution. That would perhaps suggest a dichotomy between the interest of taxpayers and the original intentions of the Federal Constitution, but that impasse cannot be resolved by use of the historical or the original interpretations of the text. The conflict resolution within the norm is rooted in its objectivity and complemented by the interpretation of legal doctrine and jurisprudence. This is what Maximiliano (2005, pp. 24/25) stands for:
“To reduce the interpretation as a means of searching for the intentions of the legislature is, in fact, to mistake the entirety by the part; it would be useful, although not always practical, to find those intentions; it is one of the elements of Hermeneutics, but not the only one; it is not even the principal or the most proficuous; there are others, far more valuable.”
2.1 The interpretation of tax immunities in general
Article 111, incise II, of the brazilian National Tax Code (Código Tributário Nacional) determines that the legislation that grants exemption shall be interpreted literally. A literal interpretation is close to no interpretation, since it demands nothing but the lexical apprehension of the text: the interpreter must only know and use the vernacular. The grammatical meaning from the entries in a dictionary will conclude the hermeneutical analysis. Therefore, when Law n. 7.713/1988 (BRAZIL, 1988) stipulates in its article 6th, incise VIII, that “the contributions paid by employers related to private pension programs in favor of their employees and managers” are exempt from income tax, it prevents the judge from extending that benefit to merely temporary workers, people with whom there is no formal working relationship. That is the lesson of the brazilian Superior Court of Justice (Superior Tribunal de Justiça) in the ruling of REsp 464.419/SP, reported by Minister Luiz Fux (BRAZIL, 2003), which considered that, “in the case of a norm that concedes tax exoneration, the applicable interpretation shall be restrictive (article 111 of the National Tax Code), with respect to the necessary legal safety that operates pro et contra the State”.
It is certain that the prescription above is not applicable to tax immunities. However, under other justifications, courts have restrictively interpreted the writing on article 150, incise VI, and on other immunizing norms. In the ruling of RE 170.784/MG (BRAZIL, 2006), Minister Maurício Corrêa determined that the “exemption” given by article 184, § 5, of the Federal Constitution comprises only the titles of agrarian debt for the expropriated individual – not to third party acquirers. The brazilian Supreme Court has also opposed to the extension of the immunity on the paper to the ink, as it says on the ruling of RE 324.600 AgR/SP, reported by Minister Ellen Gracie (BRAZIL, 2002). Machado Segundo (2007, p. 50) points out a few other occasions in which the Supreme Court has decided on the exclusion of services from the immunity in article 150, incise VI, item “d”, of the constitutional text:
“There is a precedent by STF which states that this immunity does not comprise the “services of graphic composition needed for making the final product” (STF, 1st Section, RE 230.782-SP, Rel. Min. Ilmar Galvão, j. in 13/6/2000, v.u., DJ 10/11/2000, p. 104), nor the “services provided by a company that transports newspapers to its distribution, which, with regard to that service, is subject to ISS […]” (STF, 1st Section, RE 116.607-SP, Rel. Min. Moreira Alves, j. in 19/10/1999, DJ 26/11/1999, p. 132).”
Upon holding the restrictive interpretation, jurisprudence does not single out this hermeneutic method as a requisite of applicability to the constitutional norm. The decisions above refused to extend the immunity because the hypotheses of exclusion have surpassed the maximum reach of the interpreted norm. That is the limit alerted by Larenz (1995, p. 88), to whom “what is beyond the linguistically possible literal sense (of the norm) and is clearly excluded by that sense cannot be apprehended by means of interpretation”. The brazilian Supreme Court, however, has also ruled in favor of the ample interpretation, as stated in the holding of RE 102.141/RJ, reported by Minister Aldir Passarinho (BRAZIL, 1985). Moreover, the subject is dealt with by the legal doctrine: differently from the regime applicable to the exemption rules, Machado (2011, p. 01) defends the extension of those constitutional concepts, with the purpose of giving the norm its adequate meaning in the legal system:
“An unforgivable mistake, therefore, is to interpret the immunity norm in the same way that the exemption norm is interpreted. In the immunity norm, there must be a search for the political reasoning, so that a corresponding sense may be established. To restrictively interpret an immunizing rule is inadmissible, because it may result, and most times it does, in the frustration of the purposes of the norm in the eyes of the constituency.”
What would be, therefore, the best way to interpret the tax immunities? Minister Marco Aurélio answers that question in his vote in RE 170.784/MG, previously mentioned – that the analysis of the immunizing rule must lead to the “best possible efficacy” of its prediction. The opinion is that of Paulsen (2009, p. 241), who elects interpretation as a means to reveal the effective reach of the norm, with respect to the entire legal system (in a systematic approach, however) and to “the circumstances of the case” (integrating the sense of the Constitution). This treatment proves adequate and sufficient to the assessment of the immunity, since it takes on the subject from three different angles – via systematic, teleological and constructive interpretations.
In principle, the norm is contemplated in its objectivity. Article 150, incise VI, item “b”, for example, pertains to the tax immunity to “temples of any cult”. The first tool available to the interpreter is the systematic study of the immunizing rule: in paragraph 4th of the same article, there is a determination on the need for connection of assets, income and services to the essential purposes of the immunized element. His second attempt involves looking for the direct objectives of the legal text: is it an objective or a subjective species of immunity? Would not the protection to the freedom of religion be extended to the church as an institution? Lastly, it is important for the study of Law to adjust the effects of the Constitution to the new phenomena in society. Temples of Satan are immune? And what happens when a given building divides itself in commercial sectors (such as bookstores, gift shops, restaurants and others)? Only by use of the three hermeneutic methods will it be possible for the examiner to properly apprehend the meaning of the text; they will allow for a suitable application of the norm, with protection to constitutional principles in face of the diversity of practical cases.
2.2 The interpretation of the immunity on books, newspapers, periodicals and on the paper used for their printing
Let us call “triangular interpretation” the analytical framework composed by the systematic, the teleological and the constructive methods. The immunity of article 150, incise VI, item “d”, of the Constitution is a benefit that has been part of the brazilian legal system for over twenty years; nowadays, the rule of incompetence has standing in the prohibition on censorship (article 220, paragraph 2nd) and in the safeguard to the freedom of expression (article 5th, incises IV and IX). On a different perspective, the immunity on books, newspapers, periodicals and on the paper used for their printing is a guarantee of this freedom, which leads to the extension of the protected precepts to the largest number of situations that can reasonably fit its nuclear concept.
Furthermore, the study of the immunizing rule requires the integration of the textual meaning to renewed social interactions. That is to say, we need to replace the literal apprehension of the constitutional norm by its supporting legal principle: the books, therefore, become vehicles of information. The paper turns into a physical support for books, newspapers and periodicals. The use of the constructive method comes from legal objectivity and protracts itself beyond its semantically possible meaning. Even implicit, the principles of human dignity and freedom of expression would be enough to widen the approach of item “d” of article 150, incise VI. In the specific case of the immunity on books, newspapers, periodicals and on the paper used for their printing, however, the result would give tax effectiveness to article 5th, incises IV and IX, and article 220 of the Constitution. That reach is not only supported by legal doctrine, but also by national jurisprudence.
Since 1990, the trade of computer programs in CD-ROMs gained considerable repercussion in Brazil. Back then, this market was incipient and in constant dispute with the old floppy disks – while the enthusiasts of the CD-ROM enjoyed more disk space, the users of the floppy disk defended its durability. The CD-ROM, however, seemed to fit better with the ongoing improvements in the computer industry: several softwares could be put in just one CD-ROM, instead of five or six floppy disks. The editorial industry realized that, beyond this evolution, the compact disc was adequate for the sale of books in the digital medium. Then came dictionaries, booklets, language courses, all sold to the public in the format of CD-ROMs. The Tax Administration demanded payment of the industrialized products tax and of the sales tax on the CD-ROMs, besides of the import tax in the event of the CD-ROMs coming from outside of the country; taxpayers have promptly opposed to the charges. And their claim was upheld by jurisprudence. Let us see a recent decision of the Regional Federal Court of the 2nd Region – AMS 38.592/RJ, reported by Regional Federal Judge Aluisio Gonçalves de Castro Mendes (RIO DE JANEIRO, 2003):
“WRIT OF MANDAMUS. INTERLOCUTORY APPEAL. TAX. BOOK. CD-ROM. TAX IMMUNITY. ARTICLE 150, INCISE VI, ITEM “D”, OF THE FEDERAL CONSTITUTION. Interlocutory appeal not admitted by lack of requirement of its analysis by this Court. The definition of ‘book’ shall be understood as a means of transmission of information, since historic evolution shows that the material used for expressing ideas has been modified throughout time, with its impression on paper as a mere circumstance. The teleological interpretation must be prioritized, thus making the effectivity of the immunizing rule possible, since the purpose of excluding taxation to books is foster reading and, consequently, the level of instruction, culture and formation of the brazilian population. Therefore, the immunity also encompasses the CD-ROM, which constitutes merely the physical support for the dissemination of knowledge. Interlocutory appeal not admitted and appeal granted.”
The ruling of the Court is commendable. The intended extension could not be initially extracted from the text – as mentioned before, the Constituent Assembly of 1988 had rejected the proposal of inclusion of digital means in the magna carta. The examiner, however, used the triangular interpretation to provide the immunizing norm with a better application: firstly, the Court realized that the main goal of the Constitution was to pave the way for the freedom of expression. After that, the judges decided to extend the protected concepts of the immunizing rule to the maximum amplitude of its purpose. Upon the realization of the CD-ROM as a device that could not reasonably fit any of the said concepts, the Court redesigned the constitutional immunity, converting “paper” in “physical support” for the expression of culture and knowledge.
3 THE TAX IMMUNITY ON E-READERS
As mentioned before, the immunity on books, newspapers, periodicals and on the paper used for their printing was overhauled in the Charter of 1988. Although recent predecessors have stipulated the same protection, only in the current Constitution can we notice legal principles dedicated to support the objectives of the immunizing rule. The text of 1967, for example, had an evident contradiction with the censorship to “shows and public diversions” and, on the other hand, with the immunity to taxation for books, newspapers, periodicals and paper. The current text must not be seen as an isolated command in the Constitution of the Federative Republic of Brazil; in fact, it should be used as a vehicle to the values it stands for.
As for the interpretation of this immunity, its best result is achieved by the confluence of three hermeneutic methods: the systematic, teleological and constructive interpretations. Other rules of incompetence for taxation have to be analyzed through the same study; with regard to the norm in article 150, incise VI, item “d”, of the constitutional text, the interpreter has to identify other constitutional norms with which this immunity is related. Then he must stretch its normative content to reach other hypotheses of exclusion – it is still necessary to maintain a reasonable distance from the “nuclear core” of the legal command, in the words of Larenz (1995, pp. 500/501). The last stage of the exam is designed for including in the immunity situations that could not be originally reached by the prior interpretations, but that are upheld by the governing principles of the immunizing rule. The decisions that have shielded the CD-ROM against the incidence of IPI and ICMS are a consequence of this integrative approach.
The debate on the tax immunity on e-books is, therefore, surrounded by a compelling defense in favor of taxpayers; each argument contains a concern for principles, for guarantees. The triangular interpretation itself seems built for protecting taxpayers and disentangling the access to culture. Opposers to this extensive analysis, however, will point for the undue use of analogy. They will come back to the literal and restrictive methods of apprehension of the protective amplitude of item “d”. Lastly, their references to select decisions of the Supreme Court – like the ruling in RE 330.817/RJ, reported by Minister Dias Toffoli (BRAZIL, 2010) – will attempt to obstruct the right of citizens to the immunity not only for e-books, but also (and mostly) to e-readers as well.
3.1 The distinction between e-books and e-readers
The brazilian legal doctrine has been graced with formidable studies on the stretch of immunity to e-books. Tax lawyers that endeavor to analyze the institute seem to agree with the unavoidable technological evolution, with the ever-expanding use of digital means to access content and search for bits of information that are now free from the barriers of printed paper. It would pay homage to the guiding principles of the immunizing rule, as well as to the express commands of article 220 of the Federal Constitution. The purpose of this chapter, however, is to examine the inclusion of e-readers in the field of incompetency to tax.
It is important to highlight that, in the past, the term “e-book” was used for both digital books and readers. The modern definitions are brought to us by Meadows (2010):
“In the simplest sense, an e-book (short for “electronic book”) is a computer file that contains words (and sometimes pictures) that can be read on a computer or other electronic device. If you’ve ever written a letter or a report on a word processor, then congratulations: you’ve created a very short e-book, at least by that definition.”
However, when most people talk about e-books, they’re talking about a specific kind of computer file, one that is specially designed to be opened by a specific computer or other electronic device. You’ve probably heard of some of them, or seen the advertisements on TV. The Kindle, web bookseller Amazon.com’s device, is arguably the most popular e-book reading device (“e-reader” for short), but people talk a lot about reading on Apple’s iPad tablet device, too. And of course there are plenty of others.
The tax immunity on e-books cannot be seriously questioned in face of legal doctrine and governing tax principles in the Constitution. The only distinction between the books originally conceived by the Constituent Assembly and the ones in computer files is the digital medium in which these last ones are inserted. In fact, the file containing the e-book can even be printed out and transformed into a conventional book. To tax the file, which, besides expanding the access to information, represents a definitive step towards the future of mankind, would be a baffling consequence to the norm in article 150, incise VI, item “d” of the magna carta. Beyond the evident replacement of printed paper for the e-paper or even by the reading in computers, tablets and e-readers, the e-book brings an added benefit: sustainability. Preservation of the environment. It is certain that the economic interpretation is repelled by the brazilian Tax Law, but economic elements may support the application of the legal norm (CASSONE, 2004, p. 215). Doesn’t article 170, incise VI, of the Constitution consecrate the principle of protection of the environment? What justification, beyond the appeal to the arid and literal apprehension of the text, would lead to the hindrance by the legal system to the production and to the trade of this new instrument, which is less burdensome for the environment? The answers lead to a confirmation of the immunity on e-books, with help from the simple teleological interpretation of the incompetence norm.
As for the e-readers, the legal doctrine is still uncertain. The device is more and more integrated to the everyday life of individuals in cities like São Paulo and Rio de Janeiro; most brazilians, however, have never put their hands on a Kindle or on a Nook (BARNES & NOBLE, 2010). Even Positivo Alfa, the most well-known national e-reader, is far from taking over the editorial market of Brazil. The study of immunity for these devices is a real challenge to the interpreter, which will involve peculiar and interesting aspects of tax principles and legal hermeneutics in the Constitution.
3.2 The extension of the tax immunity to Kindle and its effects to the new version of the e-reader
In August 24th, 2010, a decision ruled in the lawsuit MS 0025856-62.2009.4.03.6100, processed in the 22nd Vara Federal Cível of the Federal Court in the State of São Paulo, granted the lawyer Marcel Leonardi with the right to not collect taxes by occasion of the customs clearance of a Kindle, the e-reader of Amazon.com. The decision confirms a preliminary injunction that had gained notoriety in the press and extends the immunity on books, newspapers, periodicals and on the paper used for their printing to the most popular e-reader of the planet. In its ruling, the decision repeats some of the aforementioned lessons on interpretation and on the reach of the constitutional guarantee:
“We may notice, through a particular interpretation of the constitutional text, that the newspapers and the periodicals are immune to taxation (by the means of “impostos”), irrespective of their exterior support. Whether in paper, whether in plastic, whether in lamb skin, etc.
Nowadays, there are new mechanisms of promotion of culture and information, like e-books, e-newspapers and e-periodicals, and among them the product “Kindle”, which refers to a digital reader of books, basically, that must also be reached by the tax immunity established in art. 150, incise VI, item “d” of the Federal Constitution, since it is an instrument with the purpose of providing access to e-books. In other words, it is an accessory like the aforementioned accessories, a quality that should provide it with the same tax treatment. One must realize that the object of the present lawsuit does not involve equipment and materials that may have diverse destinations (the case of the precedent by STF, mentioned in the information provided by the defending authority, in s. 119).
Therefore, the constitutional norm has to be interpreted so that our magna carta has a long life, without the need of amendments with each and every technological evolution, which is more and more common, so much so that we say we are going through the age of technology. In this sense, I observe that the paper as a support to communication is in its last days, and I notice that the Justice system itself, which is always the last to adhere to the new technologies, is already promoting the gradual replacement of the physical lawsuits (in paper) for virtual lawsuits (electronic). For example, we may point to the Federal Special Justice of the State of São Paulo.” (SÃO PAULO, 2010)
The ruling shows that the judge took the institute of the tax immunity to the hermeneutic level of the constructive method of interpretation. His analysis of the case in point was not restricted to a semantic correlation between article 150, incise VI, item “d”, of the Constitution and the imported e-reader. He also went beyond the teleological interpretation, seeking the goals of the constitutional norm and stretching to the maximum the concept of books, newspapers, periodicals and paper. His effort led to the constructive interpretation, which transforms the rule of the constitutional text into principles representing the Constitution in face of the necessities and concerns of modern mankind. It is only with this final step that the interpreter may extract of the concept of paper its essence, which is revealed in the physical support to the dissemination of knowledge.
The Kindle (AMAZON, 2010) is not the only e-reader that may be reached by the immunity on article 150, incise VI, item “d”, of the Federal Constitution. Also, the Nook, the Kobo and the Sony Reader are purpose-built devices. Each of these devices was built with the purpose to facilitate, stimulate and promote reading – to demonstrate that, we may go back to an interview to the american journalist Charlie Rose (2011), in which Jeff Bezos, CEO of Amazon.com, explains the reason why the previous version of Kindle did not have a touchscreen:
“People ask me: ‘Why don’t you add a touchscreen?’. Well, I don’t add that because, when we were walking down with the decisions on this device, we said: ‘Right, the technology of this screen is called ‘capacitive touch’, which involves putting a layer on top of the screen’. That would increase the glare! The first thing you do when you add a touchscreen is put on top a layer of plastic, and that layer increases the glare. From a technological engineering standpoint, it’s easy to add that screen. But this is not the right decision, not if you’re committed to not compromise. This is our point of view: we wanted to create a device that didn’t compromise reading. And do you know what? Our approach is working.”
The decision regarded Kindle as a device that could be reached by the tax immunity. To extend the constitutional rule to an e-reader is an unprecedented measure in the brazilian jurisprudence. Actually, the judge declared, even if not in express terms, that the following features were unable to exclude an e-reader from the application of the immunity: internet connection, internet communication among users of the device through social networks and the audio reading of e-books, which Amazon.com aptly calls Text-To-Speech. No prior decision in Brazil had stretched tax immunity to encompass hypotheses like the ones contained in Kindle, as well as in e-readers in general.
The technological expansion and the competitiveness with other devices altered, however, the Kindle mentioned in the writ of mandamus and in the judicial decision. In fact, the Kindle Wi-Fi contains the features that made the Amazon.com e-reader popular among consumers; this new version, however, allows for the download of mp3 songs (according to the website of Amazon.com, the goal would be to allow the user to read his favorite e-books while listening to music, since some readers have that preference). The gadget also offers support to minigames like Every Word and Shuffled Row (O’DELL, 2010). If those new applications weren’t enough, users of Kindle can now access an e-mail account in the format “email@example.com”; through this address, they can receive files and even send messages to select contacts. Such innovations are in conflict with the text of that writ of mandamus, which states:
“It must be observed that the exclusive function of ‘Kindle’ is to serve as an electronic support to the reading of magazines, books, newspapers and periodicals in general. The device doesn’t allow for the reading of e-mails, the download of music and videos, the operation of videogames or the access to any content that is not comprised in the immunity of art. 150, VI, ‘d’, of the Constitution. The ‘Kindle’ cannot be mistaken, therefore, for other products currently available in the market (such as multi-purpose cellphones, palm-tops, netbooks, portable videogames and others) that have numerous functions, including (and eventually) the reading of periodicals and that, certainly, are out of the immunity prescribed by the Constitution.” (LEONARDI, 2011)
It all indicates that Kindle Wi-Fi extrapolated the frontiers of that judicial decision. However, other e-readers have been offering similar applications: with a Nook, the user may play chess or Sudoku and may surf the web, receive and send e-mails. The Pandigital Novel (PANDIGITAL, 2010) performs the same functions – in its color version, it even plays videos. The manufacturers insist that such devices are e-readers, but even the triangular interpretation would have difficulties in transposing the obstacles for support to music and game files. For that purpose, the hermeneutic methods complete themselves with the application of a singular criterion: it is common to Tax Law, but uncommon to the specific study of the objective immunity.
3.3 The preponderance as a decisive element in the application of the tax immunity on e-readers
The items of incise II, article 22 of Law n. 8.212/1991 (BRAZIL, 1991), state that the preponderant activity of the company will be an identifier of the applicable tax rate to the Social Contribution for the Insurance of Work Accidents (SAT). Preponderant, according to article 202, § 3, of Decree n. 3.048/1999 (BRAZIL, 1999), is “the activity that provides occupation, in the company, for the largest number of insured employees and other workers”. Preponderance is mentioned by the National Tax Code upon the “regulation” of article 156, § 2, incise I of the Charter of 1988. In that norm, preponderant is the activity that corresponds to more than 50% (fifty per cent) of the operational revenue of the legal person.
The use of preponderance as a tool to apply the tax immunity to e-readers will be the object of heated arguments between the State and the taxpayers. If presently the doctrine celebrates the indifference to the notion of “preponderant activity” in article 1st of the Complementary Law n. 116/2003 (BRAZIL, 2003), now it will certainly taint that teleological analysis with remarks of subjectivity or arbitrariness. Noticing the debate, maybe the Legislative will dedicate itself to the elaboration of a regulatory diploma for article 150, incise VI, item “d”, of the Federal Constitution. If the complementary legislator does not act, even the Tax Administration may issue a decree with the same goal – both of them will be wrong, since the immunizing norm has total efficacy, according to article 5th, § 1, of the magna carta. The interpreter will concede, however, that there is danger in extending the immunity to computers and other devices that, however allow for the reading of e-books, are not targeted to this specific purpose.
An interesting exercise involves evaluating these precedents according to their technical information. In a regressive scale of probability with regard to the extension of the tax immunity, the most popular of the brazilian e-readers takes the lead: Alfa, produced by Positivo Informática (2010), serves as a paradigm to other devices – does not offer games, does not allow for the download of songs, its navigator is highly limited and its screen is the famous e-paper, which imitates the pages of books and newspapers with precision (DAUER, 2011). The option of the manufacturer by a simpler model may inspire all jurisprudence to extend the meaning of paper to “physical support”, which would mean Alfa is included in the immunizing rule.
Readers like Kobo (2010) and Sony Reader (SONY, 2010) incorporate practically the same characteristics of Alfa, which is the reason why the immunity could extend itself to each one without the need to employ preponderance as a decisive element. The different versions of Kindle and Nook, on the other hand, present challenges to the protection of article 150, incise VI, item “d”, of the constitutional norm. As seen, both e-readers have innovated to provide the user with the download of songs, of some minigames and with the communication via electronic messages. What happens is that both gadgets are connected to the largest bookstores of the planet (Amazon.com and Barnes & Noble). Their design is predominantly focused on the comfort of the user, with allowance for storage of thousands of literary and journalistic works in a device that fits the palm of your hands. It is with reference to the purpose-built devices that preponderance has to perform a guaranteeing role, working as a criterion of inclusion in the constitutional immunity. Indeed, both with Kindle and with Nook, the number of elements that facilitate reading is larger in comparison to the number of applications that focus on occasional addenda.
A different question involves the application of the immunity on books, newspapers, periodicals and on the paper used for their printing to the devices known as tablet PCs. Fulks (2009) defines “tablet” as a portable computer, but built with a touchscreen. What separates the tablet from the e-reader, beyond the various functionalities common to computers, is the power given to the user to alter its operational system. To that extent, the Adam, by NotionInk (2010), comes closer to a tablet, considering its integrated camera and its various utilities for the end user. In the same way, the aforementioned Pandigital Novel would lean less towards an e-reader and more towards a hybrid gadget: it does not showcase all of the resources of a tablet, but it also distances itself from the paradigm (the brazilian Alfa, produced by Positivo Informática). Upon realizing that the betterments in other services make the device instantly popular among music, videos or game enthusiasts, the interpreter may conclude that the machine is not an e-reader. It is not a purpose-built device and, therefore, it does not deserve support by any means of objective immunity.
Evidently, the immunity on books, newspapers, periodicals and on the paper used for their printing should not reach the Galaxy Tab (Samsung), the Lifebook (Fujitsu) or the celebrated iPad (Apple). The manufacturers of these devices do not define them as e-readers, and could never do so: they are more than just e-readers. In its second version, the iPad incorporated a feature called FaceTime, developed for video calls (APPLE, 2011). The Galaxy brings an integrated GPS, allows for video recording and calls itself a “multitasking” device (SAMSUNG, 2010). The product by Fujitsu (2010) is similar to a netbook, complete with keyboard and even a mouse. Each one of these tablets is separated from the previous examples of e-readers because of the incorporation of user-friendly applications that differ from mere reading. The fact that the iPad may be used for reading e-books does not mean that it is the only thing this well-known device can do. In fact, there is no prevalence of that function above others – the Kindle, on the other hand, even with the download of songs, is focused on the support to the reading of books. In all the examples of tablet computers, the absence of even a single electronic book will not prevent the good use of the device for other purposes than reading. For that reason, there are no grounds for an eventual extension of the immunity to tablet computers, because they would have to be preponderantly designed for the reading of books to be reached by the norm in article 150, incise VI, item “d”, of the Constitution.
3.4 The conflict with recent decisions by the brazilian Supreme Court
A recurring question in the studies on the extension of the tax immunity prescribed by article 150, incise VI, item “d”, of the Federal Constitution deals with the perspective of success of taxpayers’ claims in face of the scrutiny by the brazilian Supreme Court, the guardian of the Federal Constitution. Maybe a recent decision by Minister Dias Toffoli will shed some light on the odds that are being discussed:
“The irresignation deserves to prosper, since jurisprudence in this Court is in the sense of the immunity of article 150, incise VI, item “d”, of the Federal Constitution, conferred to books, newspapers and periodicals, not being extendable to other materials that not the ones comprised in the acception of the expression “paper used for their printing”. On the subject, the following notes:
‘Tax. Immunity conferred by art. 150, VI, ‘d’ of the Constitution. Impossibility of extension to other materials than the ones comprised in the meaning of the expression ‘paper used for their printing’. Precedents of this Court – It is inadequate to award attorney’s fees in the writ of mandamus, according to Súmula 512/STF. Regimental interlocutory appeals dismissed’ (RE n. 324.600/SP-AgR, First Section, Reported by Minister Ellen Gracie, DJ 25/10/02).
‘ISS. Immunity. Services of confection of photolithos. Art. 150, VI, ‘d’, of the Constitution. – This Court has already stated (for example, in RREE 190.761, 174.476, 203.859, 204.234, 178.863) that only the materials relatable to paper – therefore, the photographic paper, including photocomposition by laser, photographic films, sensibilized, not imprinted, for monochromatic images and paper for telephoto – are reached by the tax immunity prescribed in art. 150, VI, ‘d’, of the Constitution – In this case, the claim deals with the providing of services of graphic composition (confection of photolithos) (s. 103) by the appellee to editors, which is a reason why the appealed decision, since this activity is within the reach of the immunity, and, therefore, is immune to ISS, diverged from the jurisprudence of this Court. In this sense, in a similar case, note the decision by this Section in RE 230.782. Extraordinary Appeal appreciated and granted’ (RE n. 229.703/SP, First Section, Reported by Minister Moreira Alves, DJ 17/02/02).
‘Extraordinary Appeal dismissed. 2. Tax Immunity. Art. 150, VI, ‘d’, of the Federal Constitution. 3. The jurisprudence of this Court is in the sense of only the materials relatable to paper being reached by the tax immunity. 4. Regimental interlocutory appeal dismissed’ (AI n. 307.932/SP-AgR, Second Section, Reported by Minister Néri da Silveira, DJ 31/08/01).
In the same sense, the following monocratic decisions ruled in suits in which the debated subject is specifically the tax immunity on e-books (CD-ROM): RE n. 416.579/RJ, Reported by Minister Joaquim Barbosa, DJ RE n. 282.387/RJ, Reported by Minister Eros Grau, DJ 08/06/06 and AI n. 530.958/GO, Reported by Minister Cezar Peluso, DJ 31/03/05.
Accordingly, in the terms of article 557, § 1st-A, of the Civil Procedure Code, I receive the extraordinary appeal and grant it to deny the claim.” (BRAZIL, 2010a)
The decision refuses the application of the tax immunity on e-books, those digital files that can be directly converted into printed books. Along the lines of previous decisions that demanded of the modern technology the comparison or the similitude with paper for the extension of the immunizing rule, the Minister decided in RE 330.817/RJ to discredit the extensive interpretation and avert the application of the constitutional norm. Such decision is in conflict with the ruling in a different lawsuit, this one in RE 202.149/RS, reported by Minister Menezes Direito. This is an excerpt of the vote by Minister Cármen Lúcia, which won the decision for the taxpayers:
“By force of the comprehensive interpretation by Minsters Carlos Britto and Marco Aurélio, which extended the reach of the debated immunity on the grounds of having it as an instrument of stimulus to circulation and to culture, I side with this understanding exactly in respect to not only the principle of freedom of press – which is even more strengthened according to this understanding – without disregard for the fact that Minister Menezes Direito did honor the principle of legal security.” (BRAZIL, 2011a)
Contrary to the dominant jurisprudence in the brazilian Supreme Court, Ministers Marco Aurélio, Ayres Britto and Carmen Lúcia admitted the extension of the rule in article 150, incise VI, item “d”, of the Constitution to parts of offset printing equipments for newspapers – though the parts are not similar to paper or to newspapers in themselves, they were considered indispensable to their editing. With the view to provide efficacy to the immunizing norm, the Ministers decided to interpret the norm through its teleological purpose, which is the freedom of access to information.
The insurgence of three of the current members of the Constitutional Court justifies the general repercussion – necessary to appreciation of the appeal – given to RE 595.676/RJ (BRAZIL, 2011c), which led to suspension of that monocratic decision ruled by Minister Dias Toffoli. Although the possible dismission of the appeal filed by the Union is not intimately connected to the debate of the present work, it is undeniable that a positive result will be beneficial for the debates related to e-books and e-readers. If the Supreme Court decides that the electronic components that come with the study guides used in practical courses of assembly of computers can be reached by the phenomenon of the tax immunity, it might extend the application of the same rule to the electronic support to the reading of numerous digitalized works, and of the digital books themselves as well.
Baleeiro (1977, pp. 92/93) states that the tax immunity in Brazil has origins in the jurisprudence of the Supreme Court of the United States. The eternal words of John Marshall, which shed light on the destructive power of taxation, served as support to the study of the incompetence of the State for the institution of tax charges against the organization of the State and the fundamental rights and guarantees of the citizens. To deny that any tax is charged as a proof of respect to these principles, therefore, is a measure that closely relates to the actual meaning of the constitutional norms: article 150, incise VI, item “d”, of the Charter of 1988 sought to consecrate the freedom of expression and the access to culture as crucial pillars of the brazilian State. Its interpretation commands extensive reach, which is imperative to the provision of adequate solutions to problems faced by society in this century, intricate issues brought by modernity.
The evolutionary tendency will not destroy the book, the newspaper or the periodicals in paper, at least not for some decades. The users of those means of communication will delight themselves with works printed in white, yellow or orange pages, but their economic interests will leave the business world. American bookstores that do not offer their clients the commodity of e-readers are subject to the whims of the competition: their days are numbered. The modern editors also publish their books in the format of e-books – soon, they will publish only in this format. And the objective immunity will lose meaning if it is restricted solely to books printed on paper. With the perspective of providing concrete application to the constitutional text, the Courts must safeguard the freedom from taxes in an ample, non-restrictive way. The use of interpretation in its systematic, teleological and constructive perspectives will be able to confer to the books of tomorrow the same protection that is experienced by their predecessors today.
On the other hand, the brazilian demand for conforming e-readers to possible restrictions from technological and functional standpoints (like the prohibition on the download of songs or services of electronic communication via e-mail or social networks) will face tough obstacles with the industrial rhythm of production of these devices, supposing that the eventual decision by the Supreme Court demands that these e-readers must not have A, B or C user-friendly features to be reached by the immunity. Each decision regarding the tax immunity on e-readers must prioritize the full extension of the benefit contained in article 150, incise VI, item “d”, of the Federal Constitution without imposing to the manufacturers of e-readers the reservation of a particular market for the brazilian consumers. The judicial decisions (because legislation has so far been unable to provide a satisfactory answer to taxpayers) have to perhaps provide a precise definition of what an e-reader is and fit that definition with the immunizing norm, so that the economy is not pushed to the production of a peculiar kind of electronic support for the e-books purchased and read by consumers in Brazil – and only in Brazil.
Without disregard for its trajectory in the brazilian Constitutions, the interpreter must – at least in the limited category of “impostos” – extend to the replacements of paper the bulletproof treatment conferred by the magna carta against the intentions of the tax legislation. The actual understanding of this subject, however, will only come to judges across the country when they are themselves taken over by the innovations of technology. When members of the Judiciary have an e-reader in their hands, filled with classic and modern works of legal science, they will understand the impossibility of taxing the more sustainable and efficient alternative to the current medium of reading, relegating the immunity to materials that are irrelevant to the brazilian consumers. This will be the point of inflection, for the benefit of taxpayers and of the society in general.
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 According to Business Week, the estimated sales for Kindle in 2010 was of more than eight million units. (BURROWS; GALANTE, 2010)
 The tax immunity contained in incise VI and items of article 150 of the Federal Constitution is restricted to a particular tax species, the “impostos”, as it is evident from the text. Machado (2007, p. 304) states the opposite, asserting that the immunity reaches all tax species.
 The recently issued MP 534/2011 (BRAZIL, 2011) alters Law n. 11.196/2005 to include in its prescriptions of “zero tax rate” the tablet computers that abide by the Basic Production Process (PPB). The exemption to tablet PCs, in the specific conditions prescribed by Law, is not part – by a functional distinction between the devices – of the debate on the immunity for e-readers.