Monday, June 14, 2004

Likely lost among the hubub of the Supreme Court’s pledge of allegiance opinion issued today is its 5-4 ruling in Hibbs v. Winn that taxpayers can use federal courts to challenge state taxes. The specific state statute at issue was an Arizona tax credit for payments to nonprofit “school tuition organizations” (STOs) that award scholarships to students in private elementary or secondary schools. 40 states and the Bush Administration had argued that suits challenging state taxes belong in state, not federal, court under the Tax Injunction Act (TIA), 28 U. S. C. §1341, which prohibits lower federal courts from restraining “the assessment, levy or collection of any tax under State law where a plain, speedy and efficient remedy may be had in the courts of such State.” Ginsburg wrote the majority opinion. Kennedy dissented, joined by Rehnquist, Scalia, and Thomas, arguing that the majority was concerned that “state courts are second rate constitutional arbiters, unequal to their federal counterparts. State courts are due more respect than this. Dismissive treatment of state courts is particularly unjustified since the TIA, by express terms, provides a federal safeguard: The Act lifts its bar on federal court intervention when state courts fail to provide ‘a plain, speedy, and efficient remedy.’”