Tuesday, March 21, 2006

Free Speech Case with a Tax Angle

I was going through my daily tax happenings, as I do in the mornings, and I ran across a 6th Circuit case that was decided yesterday. I was confused as to how a speech case turned up in my tax news, so I read the case. Sure enough, there's a minor tax angle.

The case is ACLU of Tennessee v. Bredesen. The ACLU and others sued the state to enjoin the issuing of premium-priced license plates (vanity plates) with "Choose Life" inscribed on them. The ACLU's position was that because the state didn't also offer a Pro-Choice themed plate, the state was violating the first amendment. The district court granted summary judgment to the ACLU and enjoined the issuing of the plates. Defendant appealed and the 6th Circuit reversed the district court.

The tax angle is not as interesting as the speech part of the case. The appellant (defendant) argued that the $35 fee for the plate was a tax, and that because it was a tax the Tax Injunction Act deprived the district court of subject matter jurisdiction. The Circuit Court dismissed this argument fairly quickly, citing the Supreme Court in New Jersey v. Anderson (203 US 483, 1906).

I have never heard of the Tax Injunction Act before. I've got a bit of work to do before class at 10, so I can't really look into it now, but I'll check it out later and be back with a brief summary.


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