Cases by Issue - State Tax

Levin v. Commerce Energy, Inc.

jgoldman — Fri, 13 Nov 2009 01:53:13 +0000

Location

United States

39° 57' 40.2336" N, 82° 59' 55.644" W

See map: Google Maps

Case Basics

Docket No.

09-223

Petitioner

Richard A. Levin, Tax Commissioner of Ohio

Petitioner Type

Petitioner

Respondent

Commerce Energy, Inc., et al.

Respondent Type

Respondent

Decided By

Roberts Court (2009-2010)

Opinion

560 U.S. ___ (2010)

Granted

Monday, November 2, 2009

Argued

Monday, March 22, 2010

Decided

Tuesday, June 1, 2010

Advocates

Benjamin C. Mizer (Solicitor General of Ohio, for the petitioner)

Stephen C. Fitch (for the respondents)

Facts of the Case

In-state and out-of-state retail natural gas suppliers sued Ohio's Tax Commissioner in an Ohio federal district court alleging that Ohio's tax scheme was unconstitutional. The plaintiffs argued that because four local natural gas distribution companies benefited from certain tax exemptions that did not benefit the plaintiffs, despite their similar circumstances, the tax scheme violated the Commerce Clause and Equal Protection Clause. The district court dismissed the case for lack of jurisdiction, but the U.S. Court of Appeals for the Sixth Circuit reversed.

The Sixth Circuit held that federal comity concerns do not bar an action that challenges the tax benefits provided to just four specific entities, but not others similarly situated. The court recognized a circuit split over whether federal comity concerns prevent federal court jurisdiction over a matter. In reaching its conclusion, the Sixth Circuit sided with the Seventh and Ninth Circuits which have interpreted Hibbs v. Winn to mean that comity prevents federal court jurisdiction only when state taxpayers seek federal court orders allowing them to avoid paying state taxes. This was not at issue in this case, and the plaintiffs' success would not significantly intrude upon traditional matters of state taxation in Ohio; thus, the federal court had jurisdiction. The Sixth Circuit remanded the case in order for it to proceed.

Question

1) Did Hibbs v. Winn eliminate or narrow the doctrine of comity applied in Fair Assessment in Real Estate Association v. McNary, which broadly prevents federal court jurisdiction over cases that intrude on the administration of state taxation?

2) Do comity principles or the Tax Injunction Act prevent federal court jurisdiction over a case in which taxpayers allege, on equal protection and dormant commerce clause grounds, that their tax assessments are discriminatory relative to other taxpayers assessments?

Conclusion

Decision: 9 votes for Levin, 0 vote(s) against
Legal provision:

No. Yes. The Supreme Court reversed the Sixth Circuit, holding that under the comity doctrine, a taxpayer's complaint of allegedly discriminatory state taxation must proceed originally in state court. With Justice Ruth Bader Ginsburg writing for the majority, the Court reasoned that its decision in Hibbs did not narrow the comity doctrine. Moreover, the Court reasoned that the Ohio courts are better positioned to determine whether Ohio's taxation scheme is unconstitutional.

Justice Anthony M. Kennedy wrote separately, concurring. He noted that he joined the majority position with the understanding it did not expand the holding in Hibbs. Justice Clarence Thomas, joined by Justice Antonin G. Scalia, concurred in the judgment. He also noted his skepticism of Hibbs. Moreover, Justice Thomas argued that this case should have been dismissed for lack of jurisdiction.

Hibbs v. Winn

Mon, 05 Jan 2009 17:44:41 +0000

Case Basics

Docket No.

02-1809

Petitioner

J. Elliott Hibbs, Director, Arizona Department of Revenue

Petitioner Type

Petitioner

Respondent

Kathleen M. Winn, et al.

Respondent Type

Respondent

Heard By

Rehnquist Court (1994-2005)

Decided By

Rehnquist Court (1994-2005)

Opinion

542 U.S. 88 (2004)

Granted

Tuesday, September 30, 2003

Argued

Tuesday, January 20, 2004

Decided

Monday, June 14, 2004

Advocates

Marvin S. Cohen (argued the cause for Respondents)

Thomas G. Hungar (argued the cause for Petitioner, on behalf of the United States, as amicus curiae)

Samuel Goddard (argued the cause for Petitioner)

Facts of the Case

Several Arizona residents challenged in federal district court an Arizona statute that allows tax credits for money spent toward parochial schools. They alleged that the statute violates the religious establishment clause of the U.S. Constitution's First Amendment.

The district court dismissed the case and ruled that it lacked jurisdiction for two reasons: First, the federal Tax Injunction Act (TIA) prohibits federal district courts from ruling on the "assessment, levy or collection of any tax under state law where a plain, speedy and efficient remedy may be had in the courts of such state." And second, the court pointed to the comity doctrine - that is, the deference that federal courts should generally give to state tax laws. The Ninth Circuit Court of Appeals reversed, ruling that neither the TIA nor comity place the case outside federal jurisdiction. The court reasoned that the TIA was inapplicable because invalidating a tax credit would not harm Arizona's ability to raise revenue.

Question

Do the federal Tax Injunction Act and comity principles require federal district courts to dismiss (for lack of jurisdiction) constitutional challenges to state tax credits that directly affect a state's tax system?

Conclusion

Decision: 5 votes for Winn, 4 vote(s) against
Legal provision: 28 U.S.C. 1341

No. In a 5-to-4 decision written by Justice Ruth Bader Ginsburg, the Court held that the intention of the Tax Injunction Act (TIA) was to prevent taxpayers from trying to avoid their state taxes through federal litigation. TIA was not intended, however, to prevent all federal interference with state taxation. Justice Ginsburg wrote, "Third-party suits not seeking to stop the collection of a tax imposed on plaintiffs were outside Congress' purview. ... Nowhere does the [legislative] history announce a sweeping congressional direction to prevent federal-court interference with all aspects of state tax administration." (emphasis original) Establishment clause challenges to state tax exemptions for religious eduction could therefore be challenged without violating TIA.

Arizona Department of Revenue v. Blaze Constr. Co.

Mon, 05 Jan 2009 16:25:06 +0000

Case Basics

Docket No.

97-1536

Petitioner

Arizona Department of Revenue

Petitioner Type

Petitioner

Respondent

Blaze Constr. Co.

Respondent Type

Respondent

Heard By

Rehnquist Court (1994-2005)

Decided By

Rehnquist Court (1994-2005)

Opinion

526 U.S. 32 (1999)

Argued

Tuesday, December 8, 1998

Decided

Tuesday, March 2, 1999

Advocates

Beth S. Brinkmann (Argued the cause for the United States, as amicus curiae, by special leave of court, supporting the petitioner)

Patrick Irvine (Argued the cause for the petitioner)

Bruce C. Smith (Argued the cause for the respondent)

Facts of the Case

Over several years, the Federal Bureau of Indian Affairs contracted with Blaze Construction Company to build, repair, and improve roads on several Indian reservations located in Arizona. When the various contracts expired, the Arizona Department of Revenue issued a tax deficiency assessment against Blaze for its failure to pay Arizona's transaction privilege tax, the tax levied on the gross receipts of companies doing business in the state, on the proceeds from its contracts with the Bureau. Blaze protested the assessment and prevailed in administrative proceedings. On review, the Arizona Tax Court granted summary judgment for the Department. In reversing, the Arizona Court of Appeals held that federal law pre-empted the tax's application to Blaze. The Supreme Court of Arizona denied review.

Question

May a state impose a nondiscriminatory tax upon a private company's proceeds from contracts with the Federal Government when the federal contractor renders its services on an Indian reservation?

Conclusion

Decision: 9 votes for Arizona Department of Revenue, 0 vote(s) against
Legal provision:

Yes. In a unanimous opinion delivered by Justice Clarence Thomas, the Court held that a "State generally may impose a nondiscriminatory tax upon a private company's proceeds from contracts with the Federal Government, regardless of whether the federal contractor renders its services on an Indian reservation." Justice Thomas wrote for the Court that, "[a]bsent a constitutional immunity or congressional exemption, federal law does not shield Blaze (a federal contractor) from Arizona's transaction privilege tax."

James M. Beam Distilling Co. v. Georgia

Mon, 05 Jan 2009 16:16:35 +0000

Case Basics

Docket No.

89-680

Petitioner

James M. Beam Distilling Co.

Petitioner Type

Petitioner

Respondent

Georgia

Respondent Type

Respondent

Heard By

Rehnquist Court (1990-1991)

Decided By

Rehnquist Court (1991)

Opinion

501 U.S. 529 (1991)

Argued

Tuesday, October 30, 1990

Decided

Thursday, June 20, 1991

Advocates

Amelia W. Baker (on behalf of the Respondents)

Morton Siegel (on behalf of the Petitioner)

Facts of the Case

None

Question

None

Conclusion

Decision: 6 votes for James M. Beam Distilling Co., 3 vote(s) against
Legal provision:

None

Davis v. Michigan Department of the Treasury

Mon, 20 Jun 2011 04:06:21 +0000

Location

Michigan Dept. of Treasury

430 W Allegan St Lansing MI 48922

Lansing, MI 48922

United States

42° 43' 57.666" N, 84° 33' 26.8884" W

See map: Google Maps

Case Basics

Docket No.

87-1020

Appellant

Paul Davis

Petitioner Type

Appellant

Appellee

Michigan Department of the Treasury

Respondent Type

Appellee

Heard By

Rehnquist Court (1988-1990)

Decided By

Rehnquist Court (1988-1990)

Opinion

489 U.S. 803 (1989)

Argued

Monday, January 9, 1989

Decided

Tuesday, March 28, 1989

Advocates

Paul S. Davis (argued the cause for the appellant, appearing pro se)

Michael K. Kellogg (argued the cause for the United States as amicus curiae urging reversal)

Thomas L. Casey (argued the cause for the appellee)

Facts of the Case

Paul Davis, a resident of Michigan, worked for the federal government and upon retirement received benefits. Michigan law exempts state retirement benefits from state taxes. Smith unsuccessfully petitioned for a refund on the state taxes he paid on his federal retirement benefits. He then filed suit in the Michigan Court of Claims arguing that the state's tax policy violated 4 U.S.C. 111 by taxing benefits paid to federal employees but not to state employees. The court dismissed his suit and so did the Michigan Court of Appeals.

Question

Did Michigan violate federal law when it exempted state and local government pensions from taxation but levied taxes on federal government pensions?

Conclusion

Decision: 8 votes for Davis, 1 vote(s) against
Legal provision: 4 U.S.C. 111

Yes. Justice Anthony M. Kennedy delivered the opinion for an 8-1 court. The Court emphasized the principles of intergovernmental tax immunity, which work to keep one part of the government from hindering the operations of another part. Section 111 allows a state to tax income paid by the federal government "if the taxation does not discriminate against the officer or employee because of the source of the pay or compensation." Because the Court found no "significant differences between the two classes [federal and state employees]," it held that the Michigan tax distinguished between employees solely on "the source of the pay."

Wardair Canada v. Florida Dept. Of Revenue

Mon, 05 Jan 2009 17:27:06 +0000

Case Basics

Docket No.

84-902

Appellee

Florida Dept. Of Revenue

Petitioner Type

Appellee

Appellant

Wardair Canada

Respondent Type

Appellant

Heard By

Burger Court (1981-1986)

Decided By

Burger Court (1981-1986)

Opinion

477 U.S. 1 (1986)

Argued

Monday, March 31, 1986

Decided

Wednesday, June 18, 1986

Advocates

Joseph C. Mellichamp, III (on behalf of the Appellee)

Walter D. Hansen (on behalf of the Appellant)

Albert G. Lauber, Jr. ()

Facts of the Case

None

Question

None

Conclusion

Decision: 8 votes for Florida Dept. Of Revenue, 1 vote(s) against
Legal provision: 49 U.S.C. 1301

None

Washington v. United States

Mon, 05 Jan 2009 17:32:37 +0000

Case Basics

Docket No.

81-969

Appellee

United States

Petitioner Type

Appellee

Appellant

Washington

Respondent Type

Appellant

Heard By

Burger Court (1981-1986)

Decided By

Burger Court (1981-1986)

Opinion

460 U.S. 536 (1983)

Argued

Monday, January 10, 1983

Decided

Tuesday, March 29, 1983

Advocates

Kenneth O. Eikenberry (on behalf of the Appellants)

Stuart A. Smith (on behalf of the United States)

Facts of the Case

None

Question

None

Conclusion

Decision: 5 votes for Washington, 4 vote(s) against
Legal provision: Article 6, Section 2: Supremacy Clause

None

Memphis Bank & Trust Co. v. Garner

Mon, 05 Jan 2009 17:33:12 +0000

Case Basics

Docket No.

81-1613

Appellee

Garner

Petitioner Type

Appellee

Appellant

Memphis Bank & Trust Co.

Respondent Type

Appellant

Heard By

Burger Court (1981-1986)

Decided By

Burger Court (1981-1986)

Opinion

459 U.S. 392 (1983)

Argued

Monday, November 29, 1982

Decided

Monday, January 24, 1983

Advocates

Jimmy C. Creecy (on behalf of appellee, William M. Leech, Jr)

J. Minor Tait, Jr. (on behalf of appellees Garner and Foster)

K. Martin Worthy (on behalf of the Appellant)

Facts of the Case

None

Question

None

Conclusion

Decision: 9 votes for Memphis Bank & Trust Co., 0 vote(s) against
Legal provision:

None

Maryland v. Louisiana

Mon, 05 Jan 2009 17:28:32 +0000

Case Basics

Docket No.

83 ORIG

Plaintiff

Maryland

Petitioner Type

Plaintiff

Defendant

Louisiana

Respondent Type

Defendant

Heard By

Burger Court (1975-1981)

Decided By

Burger Court (1975-1981)

Opinion

451 U.S. 725 (1981)

Argued

Monday, January 19, 1981

Decided

Tuesday, May 26, 1981

Facts of the Case

None

Question

None

Conclusion

Decision: 7 votes for Maryland, 1 vote(s) against
Legal provision: Article 1, Section 8, Paragraph 3: Interstate Commerce Clause

None

Arizona Public Service Co. v. Snead

Mon, 05 Jan 2009 17:11:52 +0000

Case Basics

Docket No.

77-1810

Appellee

Snead

Petitioner Type

Appellee

Appellant

Arizona Public Service Co.

Respondent Type

Appellant

Heard By

Burger Court (1975-1981)

Decided By

Burger Court (1975-1981)

Opinion

441 U.S. 141 (1979)

Argued

Monday, February 26, 1979

Decided

Wednesday, April 18, 1979

Facts of the Case

None

Question

None

Conclusion

Decision: 9 votes for Arizona Public Service Co., 0 vote(s) against
Legal provision: Article 1, Section 8, Paragraph 3: Interstate Commerce Clause

None

U.S. Steel Corp. v. Multistate Tax Comm.

Mon, 05 Jan 2009 16:34:11 +0000

Case Basics

Docket No.

76-635

Appellee

Multistate Tax Comm.

Petitioner Type

Appellee

Appellant

U.S. Steel Corp.

Respondent Type

Appellant

Heard By

Burger Court (1975-1981)

Decided By

Burger Court (1975-1981)

Opinion

434 U.S. 452 (1978)

Argued

Tuesday, October 11, 1977

Decided

Tuesday, February 21, 1978

Advocates

William D. Dexter (Argued the cause for the appellees)

Erwin N. Griswold (Argued the cause for the appellants)

Facts of the Case

In 1972, twenty one states were members of the Multistate Tax Compact, a body formed by states to assist them in formulating and administering tax law relating to multistate businesses. The Compact had not received congressional approval.

Question

Did the formation of this group violate the the Compact Clause of Article I?

Conclusion

Decision: 7 votes for Multistate Tax Comm., 2 vote(s) against
Legal provision: Article 1, Section 10, Paragraph 3: Compact Clause

The Court found no constitutional violation. The Compact did not enhance state political power at the expense of the United States; it not confer to states powers which they did not already possess; it did not involve any delegation of state power to the Commission. Furthermore, argued Justice Powell, each state was free to withdraw from the group at any time.

United States v. County Of Fresno

Mon, 05 Jan 2009 17:10:37 +0000

Case Basics

Docket No.

75-1262

Appellee

County Of Fresno

Petitioner Type

Appellee

Appellant

United States

Respondent Type

Appellant

Heard By

Burger Court (1975-1981)

Decided By

Burger Court (1975-1981)

Opinion

429 U.S. 452 (1977)

Argued

November 8-9, 1976

Decided

Tuesday, January 25, 1977

Facts of the Case

None

Question

None

Conclusion

Decision: 8 votes for County Of Fresno, 1 vote(s) against
Legal provision: Article 6, Section 2: Supremacy Clause

None

Moe v. Salish & Kootenai Tribes

Mon, 05 Jan 2009 17:12:06 +0000

Case Basics

Docket No.

74-1656

Appellee

Salish & Kootenai Tribes

Petitioner Type

Appellee

Appellant

Moe

Respondent Type

Appellant

Consolidation

No. 75-50

Heard By

Burger Court (1975-1981)

Decided By

Burger Court (1975-1981)

Opinion

425 U.S. 463 (1976)

Argued

Tuesday, January 20, 1976

Decided

Tuesday, April 27, 1976

Facts of the Case

None

Question

None

Conclusion

Decision: 9 votes for Salish & Kootenai Tribes, 0 vote(s) against
Legal provision: 28 U.S.C. 1341

None

United States v. Mississippi Tax Comm'n

Mon, 05 Jan 2009 16:33:17 +0000

Case Basics

Docket No.

74-548

Appellee

Mississippi Tax Comm'n

Petitioner Type

Appellee

Appellant

United States

Respondent Type

Appellant

Heard By

Burger Court (1972-1975)

Decided By

Burger Court (1972-1975)

Opinion

421 U.S. 599 (1975)

Argued

Tuesday, April 22, 1975

Decided

Monday, June 2, 1975

Facts of the Case

None

Question

None

Conclusion

Decision: 7 votes for United States, 2 vote(s) against
Legal provision: Amendment 21: Twenty-First Amendment

None

United States v. Mississippi Tax Comm'n

Mon, 05 Jan 2009 17:19:37 +0000

Case Basics

Docket No.

72-350

Appellee

Mississippi Tax Comm'n

Petitioner Type

Appellee

Appellant

United States

Respondent Type

Appellant

Heard By

Burger Court (1972-1975)

Decided By

Burger Court (1972-1975)

Opinion

412 U.S. 363 (1973)

Argued

Monday, March 19, 1973

Decided

Monday, June 4, 1973

Facts of the Case

None

Question

None

Conclusion

Decision: 7 votes for United States, 2 vote(s) against
Legal provision: Amendment 21: Twenty-First Amendment

None

Evansville Airport v. Delta Airlines

Mon, 05 Jan 2009 16:30:59 +0000

Case Basics

Docket No.

70-99

Petitioner

Evansville Airport

Respondent

Delta Airlines

Consolidation

Northeast Airlines, Inc., et al. v. New Hampshire Aeronautics Commission et al., No. 70-212

Heard By

Burger Court (1972-1975)

Decided By

Burger Court (1972-1975)

Opinion

405 U.S. 707 (1972)

Argued

February 23-24, 1972

Decided

Wednesday, April 19, 1972

Facts of the Case

None

Question

None

Conclusion

Decision: 7 votes for Evansville Airport, 1 vote(s) against
Legal provision: Article 1, Section 8, Paragraph 3: Interstate Commerce Clause

None

Sullivan v. United States

Mon, 05 Jan 2009 17:40:58 +0000

Case Basics

Docket No.

610

Appellee

United States

Petitioner Type

Appellee

Appellant

Sullivan

Respondent Type

Appellant

Heard By

Warren Court (1967-1969)

Decided By

Warren Court (1967-1969)

Opinion

395 U.S. 169 (1969)

Argued

Wednesday, April 2, 1969

Decided

Monday, May 26, 1969

Facts of the Case

None

Question

None

Conclusion

Decision: 8 votes for Sullivan, 0 vote(s) against
Legal provision: 50 U.S.C. 574

None

Dept. Of Revenue v. James Beam Co.

Mon, 05 Jan 2009 17:34:37 +0000

Case Basics

Docket No.

389

Petitioner

Dept. Of Revenue

Petitioner Type

Petitioner

Respondent

James Beam Co.

Respondent Type

Respondent

Heard By

Warren Court (1962-1965)

Decided By

Warren Court (1962-1965)

Opinion

377 U.S. 341 (1964)

Argued

Monday, March 23, 1964

Decided

Monday, June 1, 1964

Facts of the Case

None

Question

None

Conclusion

Decision: 6 votes for James Beam Co., 2 vote(s) against
Legal provision: Article 1, Section 10, Paragraph 2: Export-Import Clause

None

Humble Pipe Line Co. v. Waggonner

Mon, 05 Jan 2009 17:37:33 +0000

Case Basics

Docket No.

329

Petitioner

Humble Pipe Line Co.

Petitioner Type

Petitioner

Respondent

Waggonner

Respondent Type

Respondent

Consolidation

No. 354

Heard By

Warren Court (1962-1965)

Decided By

Warren Court (1962-1965)

Opinion

376 U.S. 369 (1964)

Argued

Wednesday, March 4, 1964

Decided

Monday, March 23, 1964

Facts of the Case

None

Question

None

Conclusion

Decision: 9 votes for Humble Pipe Line Co., 0 vote(s) against
Legal provision: Article 1, Section 8, Paragraph 17: Governance of the District of Columbia and Lands Purchased from the States

None

Michigan Nat. Bank v. Michigan

Mon, 05 Jan 2009 17:38:01 +0000

Case Basics

Docket No.

155

Petitioner

Michigan

Respondent

Michigan Nat. Bank

Heard By

Warren Court (1958-1962)

Decided By

Warren Court (1958-1962)

Opinion

365 U.S. 467 (1961)

Argued

January 18-19, 1961

Decided

Monday, March 6, 1961

Facts of the Case

None

Question

None

Conclusion

Decision: 6 votes for Michigan, 2 vote(s) against
Legal provision: 12 U.S.C. 548

None

Phillips Co. v. Dumas School Dist.

Mon, 05 Jan 2009 16:30:33 +0000

Case Basics

Docket No.

Petitioner

Dumas School Dist.

Respondent

Phillips Co.

Heard By

Warren Court (1958-1962)

Decided By

Warren Court (1958-1962)

Opinion

361 U.S. 376 (1960)

Argued

November 17-18, 1959

Decided

Tuesday, February 23, 1960

Facts of the Case

None

Question

None

Conclusion

Decision: 9 votes for Phillips Co., 0 vote(s) against
Legal provision: Equal Protection

None