U.S. Supreme Court
Supreme Court to Decide Tax Fairness Case Involving Sewer Fee Forgiveness
Posted Nov 14, 2011 12:43 PM CST
By Debra Cassens Weiss
The U.S. Supreme Court will decide a case involving the interplay of sewer taxes and the equal protection clause.
At issue is whether the city of Indianapolis violated the equal protection clause when it forgave future payments by taxpayers paying a sewer hook-up fee in installments, but refused to issue refunds to those who had paid in full, SCOTUSblog reports.
According to the cert petition (PDF), 31 property owners who paid a fee of about $9,000 up front are claiming a constitutional violation. Those who had their future payments forgiven in 2005 had paid only $309 if they were on the 30-year payment plan, $464 if they were on the 20-year plan, and $928 if they were on the 10-year plan.
The Indiana Supreme Court had upheld the refusal to give rebates in a 3-2 decision (PDF). The court said the city was aiding lower- and middle-income taxpayers who were more likely to be paying by installment plan. The court also found the city had “a legitimate interest in not emptying its coffers to provide refunds.”
The Tax Foundation notes the cert grant at its Tax Policy Blog. It had filed an amicus brief in the case. “Tax policy widely perceived as unusual and unfair threatens to bolster a general disenchantment with the government, creating tensions between the law and citizens,” the Foundation had argued.