Supreme Court Hears Investment Tax Credits Case

By Parkhurst, David | Nation's Cities Weekly, March 13, 2006 | Go to article overview
Save to active project

Supreme Court Hears Investment Tax Credits Case

Parkhurst, David, Nation's Cities Weekly

The Supreme Court recently heard oral arguments in an important case for municipalities and states on whether the use of investment tax credits is constitutional.

The result in Wilkins, et al. v. Cuno, et al. (No. 04-1724) and its companion case, DaimlerChrysler Corp. v. Cuno et al. (No. 04-1704), could affect whether the courts or legislatures set economic development policy.

In questions to the attorneys, the justices seemed wary of the argument that Ohio's tax incentives thwarted interstate commerce.

The Supreme Court's first hurdle, however, is to decide whether the taxpayers challenging the tax incentives have legal standing to do so.

The justices used the majority of the hour-long argument to pepper the attorneys on this procedural question. Theodore Olsen, representing DaimlerChrysler, argued that the individual taxpayers and small business owner who challenged the incentives could not bring a general grievance against the use of tax incentives because they did not suffer a direct injury that a decision in their favor would remedy.

Counsel for the taxpayers countered with an inventive argument that the tax incentive question should be "bootstrapped" onto a particular claim arising from the matter that the courts below granted standing. The justices appeared to reject this argument because it would require the court to deviate from precedent dramatically.

The Cuno case concerns a 1998 agreement negotiated between the City of Toledo and the DaimlerChrysler Corporation. Under the agreement, DaimlerChrysler would construct a new $1.2 billion vehicle-assembly plant near an existing facility located in an economically distressed area, which would provide the Toledo region several thousand new jobs. In return, the city and two local school districts agreed to provide approximately $280 million through local property tax exemptions and an Ohio investment tax credit.

The Court of Appeals for the Sixth Circuit, which includes Ohio, Michigan, Tennessee and Kentucky, upheld the property tax exemptions, but ruled for the taxpayers and overturned Ohio's investment tax credit as unconstitutional.

The rest of this article is only available to active members of Questia

Sign up now for a free, 1-day trial and receive full access to:

  • Questia's entire collection
  • Automatic bibliography creation
  • More helpful research tools like notes, citations, and highlights
  • Ad-free environment

Already a member? Log in now.

Notes for this article

Add a new note
If you are trying to select text to create highlights or citations, remember that you must now click or tap on the first word, and then click or tap on the last word.
Loading One moment ...
Project items
Cite this article

Cited article

Citations are available only to our active members.
Sign up now to cite pages or passages in MLA, APA and Chicago citation styles.

Cited article

Supreme Court Hears Investment Tax Credits Case


Text size Smaller Larger
Search within

Search within this article

Look up

Look up a word

  • Dictionary
  • Thesaurus
Please submit a word or phrase above.
Print this page

Print this page

Why can't I print more than one page at a time?

While we understand printed pages are helpful to our users, this limitation is necessary to help protect our publishers' copyrighted material and prevent its unlawful distribution. We are sorry for any inconvenience.
Full screen

matching results for page

Cited passage

Citations are available only to our active members.
Sign up now to cite pages or passages in MLA, APA and Chicago citation styles.

Cited passage

Welcome to the new Questia Reader

The Questia Reader has been updated to provide you with an even better online reading experience.  It is now 100% Responsive, which means you can read our books and articles on any sized device you wish.  All of your favorite tools like notes, highlights, and citations are still here, but the way you select text has been updated to be easier to use, especially on touchscreen devices.  Here's how:

1. Click or tap the first word you want to select.
2. Click or tap the last word you want to select.

OK, got it!

Thanks for trying Questia!

Please continue trying out our research tools, but please note, full functionality is available only to our active members.

Your work will be lost once you leave this Web page.

For full access in an ad-free environment, sign up now for a FREE, 1-day trial.

Already a member? Log in now.

Are you sure you want to delete this highlight?