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Monday, December 5, 2005

Hickman on State Tax Incentives for Economic Development

Kristin_hickman_headshot_oc_1 Ssrn_logo_67 Kristin Hickman (Minnesota) has posted on SSRN two papers from the conference she hosted at the University of Minnesota in October, State Tax Incentives for Economic Development [bloged here]:

In 2004, in Cuno v. DaimlerChrysler, Inc., 386 F.3d 738 (6th Cir. 2004), the Sixth Circuit invalidated the Ohio investment tax credit on dormant Commerce Clause grounds while upholding a property tax waiver by the City of Toledo and local school boards against a similar challenge. The Supreme Court granted DaimlerChrysler's petition for certiorari on the Ohio investment tax credit issue only while ordering the parties to brief whether the Cuno plaintiffs have standing to sustain their challenge. The Cuno plaintiffs' petition for certiorari on the property tax waiver issue remains pending. On October 7, 2005, scholars and other experts gathered at the University of Minnesota Law School to discuss issues raised by the Cuno case. The purpose of this essay is to introduce and provide background for essays produced in connection with a conference on DaimlerChrysler Corp. v. Cuno, as the case is known on the Supreme Court's docket.

In granting certiorari in the case of DaimlerChrysler Corp. v. Cuno, the Supreme Court asked the parties to brief whether respondents have standing to challenge Ohio's investment tax credit. Looking at the posture of the case, this essay argues that the Supreme Court is likely sending a signal that it hopes to overturn the Sixth Circuit decision on standing grounds and avoid the more difficult question of whether the tax credit is unconstitutional based on the dormant Commerce Clause. This essay applies modern standing doctrine to the Cuno case and concludes that the Cuno plaintiffs do not have standing to raise their claims in federal court. First, this essay examines a circuit split over whether state taxpayers have standing to challenge state taxation and spending. The answer, the essay argues, is that standing limits the ability of state taxpayers like the Cuno plaintiffs to challenge state laws in federal court. Second, this essay further argues that the Court could alternatively overturn the Sixth Circuit's decision on grounds of causation, redressability, or zone-of-interests analysis.

http://taxprof.typepad.com/taxprof_blog/2005/12/hickman_on_stat.html

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