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Supreme court rules on equal protection in taxation

The US Supreme Court [official website] on Monday ruled 6-3 [opinion, PDF] in Armour v. Indianapolis [SCOTUSblog backgrounder] that a tax amnesty program did not violate the Fourteenth Amendment [text] rights of those citizens who had already paid the taxes in full. The case involved an Indianapolis tax scheme that was changed mid-project such that several residents were forgiven the remainder of their balances on that tax. The petitioners, a group of citizens who paid their taxes in full, argued that this program violates their rights to Equal Protection under the law. The majority held that the Indianapolis program satisfied the rational basis requirement under the 14th Amendment: "This Court has long held that 'a classification neither involving fundamental rights nor proceeding along suspect lines ... cannot run afoul of the Equal Protection Clause if there is a rational relationship between the disparity of treatment and some legitimate governmental purpose.'" Chief Justice Roberts, joined by Justices Scalia and Alito, filed a dissenting opinion: "Indiana law promised neighboring homeowners that they would be treated equally. ... The City then ended up charging some homeowners 30 times what it charged their neighbors. ... The equal protection violation is plain."

The court heard oral arguments [JURIST report] in March. The petitioners had appealed from an Indiana Supreme Court [official website] ruling for the city [opinion text]. Indianapolis assessed a property tax [SCOTUSBlog report] on citizens in a certain residential area to fund a new sanitation project in 2001. Residents were given the option of paying the $9,278 tax in full, or paying it in increments over several decades. Several paid in full, while others paid considerably under the installment plan. In 2005, the city decided to revise the tax policy to fund the plan, and forgave the remaining balances on all of the residents. This put many in the position where they had paid above the new $2,500 fee for the sanitation project. The city government refused to refund those taxes, but property owners were refunded in a private suit. They then pursued litigation against the forgiveness policy that had allowed other property owners to pay below the initial tax.

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