Lesley Stedman Weidenbener has an article in the Louisville Courier Journal on the class action tax lawsuit filed by attorney John Price against the State. The State is basically arguing that taxpayers can’t go stampeding directly to the tax court – they have to exhaust administrative remedies first. In the context of this suit, I’m not sure if it means going through the Dept. of Local Government Finance or perhaps through the local Property Tax Board of Appeals and then the Board of Tax Review. In any case, Price on behalf of the citizens he represents says that going the administrative route would be a waste of time. A cynical lawyer might suggest that this often seems to be the point of requiring administrative exhaustion. But, I don’t know any cynical lawyers.
The lawsuit also challenges the authority of Gov. Mitch Daniels and the Department of Local Government Finance to extend a deadline for local governments to impose income taxes as a way to reduce property taxes next year.
A law passed by the General Assembly in the spring set the deadline as Aug. 1, but Daniels and the agency extended it to the end of the year.
Price said the constitution prohibits Daniels from arbitrarily changing a state law.
Attorneys for the state didn’t argue the merits of that issue yesterday. Instead, Andrew Swain, chief counsel for the Indiana Attorney General’s tax section, said none of the plaintiffs had the right to challenge the state action because the matter is between the state and the counties.
In the back of my mind, I thought maybe there was some kind of safety valve the legislature had given the DLGF that ended up allowing the Governor to extend the deadlines. Apparently not. The Governor is just winging it. I imagine county councilors around the state will be a little hesitant to pass an income tax based on deadlines extended by the Governor without clear authority. (I don’t think they’d be eager to pass a tax increase in the first place – this would just add to the natural reluctance to raise taxes.)
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