Tuesday, May 16, 2006

SCOTUS holds taxpayers have no standing to challenge corporate tax breaks

In Daimler Chrysler v. Cuno, the city of Toledo and State of Ohio sought to encourage the current manufacturer of Daimler Chrysler to expand its Jeep operation in Toledo, by offering local and state tax benefits for new investment. Taxpayers in Toledo sued, alleging that their local and state tax burdens were increased by the tax breaks for DaimlerChrysler, tax breaks that they asserted violated the Commerce Clause. The Sixth Circuit agreed that a state tax credit offered under Ohio law violated the Commerce Clause.

The Supreme Court, however, held that the taxpayers--suing merely as taxpayers--lacked standing. Hence, it did not reach the commerce clause issue

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