Will U.S. Supreme Court, in Levin v. Commerce Energy, Expand or Restrict State Taxpayers’ Access to Federal Forum?

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,...

For nearly 70 years, the Tax Injunction Act (TIA) barred federal district courts from hearing most state tax cases. In 2004, the U.S. Supreme Court ruled, in Hibbs v. Winn, that the act applied only to those cases that would disrupt the flow of state tax revenues. Following Hibbs, the states began to argue for another barrier to the federal forum—the doctrine of “comity.” A form of legal reciprocity, comity is the central issue in Levin v. Commerce Energy, in which several out-of-state natural gas suppliers charge that Ohio's taxing scheme discriminates in favor of in-state suppliers. In this article, authors Charolette F. Noel and Bryan D. Lammon, of Jones Day, trace the evolution of the comity doctrine and discuss the U.S. Supreme Court's likely options for refining its scope.

This article is available to subscribers of the Weekly State Tax Report. For more information or to take a trial to the report, click here.