States and Localities Score Victory with Supreme Court DecisionThe Supreme Court handed a victory to states and localities with its decision in Armour v. City of Indianapolis, Indiana. The court found that the City of Indianapolis did not violate the Equal Protection Clause of the U.S. Constitution when it forgave the assessments of homeowners who paid for sewer improvements in multi-year installments, but issued no refunds to homeowners who paid for the same improvements in a lump sum. Lump-sum payers had sued the city, arguing that the different treatment amounted to a violation of the constitution’s equal protection clause. The court found that the city did not violate the equal protection clause, however, because it had a rational basis—administrative considerations—for distinguishing between lot owners who already paid for their share of the sewer improvements and those who had not. The court held that city had a rational basis for treating those who had already paid differently from those who had not, namely, sparing itself the “complex and expensive” administrative cost of adopting a different approach.
The court’s decision should be helpful to state and local taxing authorities because it contains strong language reaffirming prior Court precedent, making clear the substantial deference that should be given to state and local tax classifications.
Click here to read the court’s opinion.
|
