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DaimlerChrysler Tax Break Case Returned To Lower Court

by Glen Shapiro, for LawAndTax-News.com, New York

17 May 2006

Ruling on disputed tax breaks offered by the Ohio state authorities to DaimlerChrysler, the US Supreme Court on Monday stated that the taxpayer group which brought the action did not have the legal authority to do so.

The long-running dispute centred on a 10 year exemption from property taxes and investment tax credits offered to the auto manufacturer in order to encourage it to locate a Jeep assembly plant in the state.

The group of local taxpayers, headed by law professor Peter D. Enrich, argued that the tax breaks were unconstitutional, as they adversely affected interstate commerce.

However, sending the matter back to Ohio's state courts on Monday, the unanimous Supreme Court panel ducked the constitutionality issue by arguing that the taxpayers were not directly affected by the tax incentive scheme, and that they did not therefore have the legal standing to bring the matter before the federal courts.

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