A federal appeals court has ruled that the state of Texas is not in violation of the First Amendment by denying tax breaks to movies it deems to be insulting to the state.

The question of the state's ability to deny film-related tax breaks was brought up last year when the team behind the 'Machete' films, Machete Productions LLC, sued the state for First Amendment violations for denying 'Machete' and its sequel breaks because of the perceived political nature of the films.  The Texas Film Commission denied the tax breaks to the films, 'Machete' and 'Machete Kills', citing “inappropriate content or content that portrays Texas or Texans in a negative fashion.”  Machete Productions LLC claims they were not given a clear explanation as to what the state found to be portraying the state in a negative light.

The lawsuit claims that the state didn't find issues with either film until political pundits slammed the films for being racially inflammatory.  'Machete' dealt with the controversial issue of immigration and treatment of immigrants, with Robert De Niro playing a Texas Senator who hunted illegal immigrants for sport.

The 5th Circuit Court of Appeals in Louisiana, known for regularly siding with conservative political stances, ruled in favor of the state of Texas, saying that a state is not in violation of the First Amendment by favoring certain political ideals with its tax dollars, as long as they are not attempting to coerce silence from the filmmakers.  Judge Catharina Haynes wrote,

Machete does not dispute that it was free to engage in protected First Amendment activity without the benefit of an Incentive Program grant, and in fact did engage in such activity by making the film. Machete has not shown that it is clearly established that the First Amendment requires a state which has an incentive program like this one to fund films casting the state in a negative light.

via Wall Street Journal