property tax

Armour v. City of Indianapolis

Issues

Does a city violate the Equal Protection Clause when it forgives the outstanding debt of taxpayers who elected to pay an assessment over the course of several years but refuses to refund similarly situated taxpayers who paid the tax in full?

Court below

 

The Supreme Court will resolve whether a local taxing authority violated the Equal Protection Clause when it forgave the outstanding debt of taxpayers who elected to pay a special assessment over the course of several years while refusing to refund similarly situated taxpayers who paid in full. The Indiana Supreme Court determined that Indianapolis did not violate the Equal Protection Clause despite the large disparity in tax obligations of identically situated taxpayers. Petitioners Christine Armour and other taxpayers argue that where a state has made a determination to treat a group of properties as the same class, it must treat the taxpayers of those properties with rough equality. They assert that forgiving the outstanding debt of some taxpayers without issuing refunds to those who made a single full payment violates the Equal Protection Clause. Respondent City of Indianapolis maintains that the differing treatment is based on legitimate governmental interests and is constitutionally valid.

Questions as Framed for the Court by the Parties

Whether the Equal Protection Clause precludes a local taxing authority from refusing to refund payments made by those who have paid their assessments in full, while forgiving the obligations of identically situated taxpayers who chose to pay over a multi-year installment plan.

Indiana’s Barrett Law allows municipalities to fund public improvements through special assessments levied against and apportioned equally among benefited properties. See City of Indianapolis v. Armour, 946 N.E.2d 553, 556–57 (Ind.

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DaimlerChrysler Corp. v. Cuno; Wilkins v. Cuno

Issues

Does either the investment tax credit or the property tax exemption at issue violate the Commerce Clause of the United States Constitution or the Equal Protection Clauses of the United States or Ohio State Constitutions by discriminating in favor of businesses locating new investments in Ohio and against incumbent businesses or those locating elsewhere?

Do the Respondents here (and plaintiffs below) have standing as the state and municipal taxpayers to challenge the tax incentive programs at issue?

 

The Ohio State investment tax credit (Ohio Revised Code ? 5733.33) encourages development in economically depressed areas by providing tax breaks to companies or individuals that choose to locate in such areas and to install new manufacturing machinery and equipment. The personal property tax incentive, under Ohio Rev. Code Ann. ?? 5709.62 and 5709.631, permits municipalities to grant property tax exemptions to corporations that develop in economically depressed areas and meet certain employment and investment levels. Together, these two statutes create incentives for corporate development in Ohio in otherwise unfavorable locations. Respondents, state and non-state taxpayers and one Ohio business forced to relocate upon the construction of a DaimlerChrysler plant, argue that this tax-incentive scheme is unconstitutional under the dormant Commerce Clause, which prohibits state taxes from discriminating against interstate commerce. Petitioners assert that (1) the Respondents lack standing to bring the suit, and (2) the dormant Commerce Clause prevents only state taxes which discourage companies from doing businesses in other states and not incentives that encourage companies to locate within the state.

Questions as Framed for the Court by the Parties

DaimlerChrysler Corp. v. Cuno (04-1704):

Whether Ohio's investment tax credit, Ohio Revised Code ? 5733.33, which seeks to encourage economic development by providing a credit to taxpayers who install new manufacturing machinery and equipment in the State, violates the Commerce Clause of the United States Constitution.

Whether Respondents have standing to challenge Ohio's investment tax credit, Ohio Rev. Code Ann. ? 5733.33.

Wilkins v. Cuno (04-1724):

Does the dormant Commerce Clause allow a State to attempt to attract new business investment in the State by offering credits against the State's general corporate franchise or income tax, where the amount of the credit is based on the amount of a business's new investment in the State?

Whether Respondents have standing to challenge Ohio's investment tax credit, Ohio Rev. Code Ann. ? 5733.33.

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Factual Background

DaimlerChrysler contracted with the City of Toledo, Ohio in 1998, to construct a new vehicle-assembly plant in exchange for tax incentives. See Cuno v. DaimlerChrysler, Inc., 386 F.3d 738, 741. DaimlerChrysler forecasted its total investment in the project to be about $1.2 billion, which would result in tax incentives totaling an estimated $280 mil

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Polar Tankers, Inc. v. Valdez, Alaska

Issues

Whether a city's property tax only on large vessels using the city's ports violates the Tonnage Clause of the Constitution, and whether a state's inclusion of certain out-of-state activities in its calculations of percentage value violates the Commerce and Due Process Clauses of the Constitution.

Court below

 

In 1999, the city of Valdez imposed a tax on vessels using its harbors. This case concerns the constitutionality of that tax and the apportionment methodology used to assess the tax. Petitioner Polar Tankers claims that the tax is a tonnage duty prohibited by the Constitution's Tonnage Clause. Polar Tankers argues that the apportionment methodology utilized by Respondent Valdez distorts a vessel's value, and that the effect of the distortion is to allow Valdez to make revenue that is grossly disproportionate to the amount of time a vessel actually spends using Valdez' ports. Furthermore, Polar Tankers argues that Valdez' apportionment scheme creates a risk of double taxation for vessels. Valdez, however, claims that the tax is nothing more than an ad valorem property tax. Valdez argues that the Tonnage Clause does not apply to ad valoremtaxes, and that its apportionment scheme is based on a vessel's productive activity in Valdez. Lastly, in response to the charge of creating a risk of double taxation for vessels, Valdez states that domicile states do not have exclusive authority to tax vessels for time spent on the high seas. Thus, the outcome of this case will affect taxation as it relates to interstate commerce.

Questions as Framed for the Court by the Parties

1. Whether a municipal personal property tax that falls exclusively on large vessels using the municipality's harbor violates the Tonnage Clause of the Constitution, art. I, § 10, cl. 3.

2. Whether a municipal personal property tax that is apportioned to reach the value of property with an out-of-State domicile for periods when the property is on the high seas or otherwise outside the taxing jurisdiction of any State violates the Commerce and Due Process Clauses of the Constitution.

Situated on the terminus of the Trans Alaska Pipeline System, Respondent the City of Valdez ("Valdez") serves as a crucial link in the transportation of crude oil from Alaskan oil fields to refineries. See City of Valdez v.

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