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1 Joseph Henchman & Laura Lieberman, Taxpayers Who Pay a Cancelled Tax Should Get Refunds: Armour v. City of Indianapolis 1 (2011)

handle is hein.taxfoundation/ffcibxz0001 and id is 1 raw text is: FOUNDATION September 10, 2011 No. 281 Taxpayers Who Pay a Cancelled Tax Should Get Refunds: Armour v. City of Indianapolis By Joseph Henchman & Laura Lieberman Executive Summary When Indianapolis reduced its sewer tax in 2005, the city forgave all future payment obligations by those who were paying the tax in installments. Taxpayers who paid it up front were given no refund. * The Indiana Supreme Court upheld the City's arbitrary refund policy, arguing that it is conceivable that such a policy would administrative burdens and help the poor. * Courts must evaluate whether claimed justifications have any rational connection to the stated policy, particularly where there is a strong perception of unfairness and arbitrary action. * If allowed to stand, the Indiana decision will undermine business certainty, tax compliance, and respect for the law. Introduction The Tax Foundation today filed a brief with the U.S. Supreme Court, asking them to hear an appeal from an Indiana decision to give tax refunds to some taxpayers but not others. The case involves the Indianapolis city sewer tax, which taxpayers had to pay either (a) in full or (b) in installments. In 2005, the city reduced the tax and forgave all future obligations by taxpayers paying in installments. Taxpayers who paid in full requested a prorated refund but were denied. The Indiana Supreme Court upheld the City's refusal in a 3-2 decision, holding that it did not violate constitutional guarantees of equal protection.' Our brief urges the U.S. Supreme Court to take the case and reverse that conclusion. Joseph Henchman is Vice President of State & Legal Projects at the Tax Foundation and Laura Lieberman is Law Clerk at the Tax Foundation. ' City of Indianapolis v. Armour, 946 N.E.2d 553, 560 (Ind. 2011).