Daily Tax Report: State provides authoritative coverage of state and local tax developments across the 50 U.S. states and the District of Columbia, tracking legislative and regulatory updates,...
The state of Ohio filed a petition March 29 asking a federal appeals court to rehear its lawsuit challenging the Affordable Care Act’s transitional reinsurance program, a taxing mechanism set up to reimburse some health insurers for coverage provided to higher risk patients ( Ohio v. U.S. , 6th Cir., 16-3093, petition for rehearing en banc 3/29/17 ).
Ohio’s March 29 request for the entire U.S. Court of Appeals for the Sixth Circuit to rehear the case comes after a three-judge panel of the court rejected the state’s argument that tax provisions of the transitional reinsurance program should be construed to apply to private employers only.
A three-judge panel of the court held Feb. 17 that the text of ACA showed Congress’ intent to subject governmental employers to the tax, and that the program didn’t amount to a commandeering of Ohio’s regulatory apparatus because its provisions required the state to comply with a federal regulatory program rather than to implement one.
Ohio was joined in the lawsuit by several public entities inside the state. The case also attracted friend-of-the-court briefs filed by 13 other states.
In its petition for rehearing, Ohio claims that the panel’s ruling had turned the court’s previous approach to federal taxation of state activities on its head. Where before the court insisted that federal taxation of state activities may be allowed only where Congress has explicitly stated its intention to do so, now the panel holds that federal taxation may apply where Congress has failed to explicitly exempt state activity from the tax, the petition said.
The state also argues in the petition that the panel’s ruling gives federal authorities “unprecedented scope to hide behind state taxing power” in funding federal projects. It also disregards the U.S. Supreme Court’s concerns about accountability shifting that are given substance in the anti-commandeering doctrine and the intergovernmental-tax immunity doctrine.
To contact the reporter on this story: Christopher Brown in St. Louis at ChrisBrown@bna.com
To contact the editor responsible for this story: Ryan C. Tuck at firstname.lastname@example.org
Text of the petition for rehearing, which includes the panel's Feb. 17 ruling as an appendix, is at http://src.bna.com/ntj.
Copyright © 2017 Tax Management Inc. All Rights Reserved.
All Bloomberg BNA treatises are available on standing order, which ensures you will always receive the most current edition of the book or supplement of the title you have ordered from Bloomberg BNA’s book division. As soon as a new supplement or edition is published (usually annually) for a title you’ve previously purchased and requested to be placed on standing order, we’ll ship it to you to review for 30 days without any obligation. During this period, you can either (a) honor the invoice and receive a 5% discount (in addition to any other discounts you may qualify for) off the then-current price of the update, plus shipping and handling or (b) return the book(s), in which case, your invoice will be cancelled upon receipt of the book(s). Call us for a prepaid UPS label for your return. It’s as simple and easy as that. Most importantly, standing orders mean you will never have to worry about the timeliness of the information you’re relying on. And, you may discontinue standing orders at any time by contacting us at 1.800.960.1220 or by sending an email to email@example.com.
Put me on standing order at a 5% discount off list price of all future updates, in addition to any other discounts I may quality for. (Returnable within 30 days.)
Notify me when updates are available (No standing order will be created).
This Bloomberg BNA report is available on standing order, which ensures you will all receive the latest edition. This report is updated annually and we will send you the latest edition once it has been published. By signing up for standing order you will never have to worry about the timeliness of the information you need. And, you may discontinue standing orders at any time by contacting us at 1.800.372.1033, option 5, or by sending us an email to firstname.lastname@example.org.
Put me on standing order
Notify me when new releases are available (no standing order will be created)