Argument of Justice Breyer
Mr. Breyer: I have the opinion of the Court to announce in two cases.
The first is 02-695, Fitzgerald versus the Racing Association of Central Iowa.
Iowa tax has adjusted revenues from slot machines at racetracks had graduated rates with a maximum rate of 36%.
The tax has adjusted revenues from slot machines on riverboats at graduated rates with a maximum rate of 20%.
The Iowa Supreme Court held that this tax rate difference, 36% as opposed to 20%, violated the Federal Constitution's equal protection clause.
In an opinion authored by Justice Breyer we reversed, as the Court stated in Nordlingerv. Hahn “differences in state tax rates do not violate the equal protection clause so long as there is a plausible policy reason for the classification”.
The legislature may have considered the underlying legislative facts to be true and the differences reflect a classification that is not arbitrary or irrational.
That standard is satisfied here.
The legislature may have wanted a lower riverboat tax rate, for example, to encourage riverboats to remain within Iowa or to help the communities in which the riverboats are located.
There is nothing irrational or arbitrary about such justification.
For these reasons and other set forth in the opinion we reverse the decision of the Supreme Court of Iowa.
The decision is unanimous.
