TaxProf Blog

Editor: Paul L. Caron
Pepperdine University School of Law

Friday, January 21, 2005

6th Circuit Denies Rehearing in Ohio Investment Tax Credit Case

We previously blogged the Sixth Circuit's decision in Cuno v. Daimler-Chrysler, Inc., No. 00-07247 (6th Cir. Sept. 2, 2004), holding that Ohio's investment tax credit is unconstitutional because it grants preferential tax treatment to companies to expand within the state rather than in other states.  The Sixth Circuit this week denied the defendants' petition for rehearing en banc.  The panel's decision, if followed in other circuits, would invalidate investment tax credits in 40 other states.  (Tax Prof Peter Enrich (Northeastern) is counsel for the appellants.)   For press coverage of the Sixth Circuit's order, see:

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Interesting. What would be the impact on attracting foreign businesses, ostensibly unrelated to interstate commerce (in that they are not within a different state as of yet). Also, its interesting to note that our nation bestows "favored nation status" on certain countries. No one has opined that this is discrimination, yet, in a free market context, its nothing other than discrimination. There is the much touted issue of federalism. How far can the fed. gov't go to impact upon state affairs? Lastly, since these our tax benefits, which, presumably, are the burden of a state's taxpayers, how can the fed gov't tell the citizenry of a given state how to use their money, constitutionally?

Posted by: William G. Osta | Jan 24, 2005 9:20:22 AM