The US Supreme Court ruled Thursday that the government cannot keep the profits of properties sold to pay off tax debts. The court reached this decision in the case of Tyler v. Hennepin County, Minnesota, et al., wherein a local Minnesota government sold off a woman’s condo to satisfy her tax bill.
The case centered around Geraldine Tyler, a 94-year-old woman, whose condo was sold by Hennepin County, Minnesota to satisfy her tax bill. Tyler originally purchased the condo in 1999, and lived there alone until 2010 when her family moved her into a senior assisted living community. When she moved out of the condo, the property tax bill was forgotten by the family. By 2015, the condo had incurred $2,300 in unpaid property taxes and $13,000 in interest and penalties.
In 2015, Hennepin County seized the property, as permitted under Minnesota Statute §§281.18, 282.07, and sold it for $40,000. The county used $15,000 to pay off the property tax debt, but kept the excess $25,000 for their own use. The county cited Minnesota Statute §282.08, which states that any proceeds in excess during the sale of a seized property may be kept by the county. Tyler argued, however, that this was unconstitutional under the Takings Clause of the US Constitution’s Fifth Amendment.
The majority agreed with Tyler.Writing for the majority opinion, Chief Justice Roberts stated:
The Takings Clause “was designed to bar Government from forcing some people alone to bear public burdens which, in all fairness and justice, should be borne by the public as a whole.” Armstrong, 364 U. S., at 49. A taxpayer who loses her $40,000 house to the State to fulfill a $15,000 tax debt has made a far greater contribution to the public fisc than she owed. The taxpayer must render unto Caesar what is Caesar’s, but no more.
The court cited support from several precedent cases and noting that the majority of states would not uphold such a statute. The court concluded that, by keeping the excess profit, the county was essentially performing a taking of private property, which is regulated by the Takings Clause.