When can Federal Courts Entertain Challenges to State Tax Laws?
Decided June 14, 2004 Sure, everyone knows Judge Reinhardt wrote the Pledge decision that had El Nino and the Knights of Columbus roaring, but it is his interpretation of the federal Tax Injunction Act (TIA)–upheld in Hibbs v Winn–that will have a greater impact on American federalism. Justice Ginsburg, writing in Hibbs, seconded Judge Reinhardt’s narrow interpretation of the TIA, guaranteeing the increased use of federal courts to challenge state tax policy. Neither Judge Reinhardt or Justice Ginsburg was inconvenienced by the TIA’s text, which unambiguously removes state tax law, in most cases, from federal court jurisdiction: “The District Courts shall not enjoin, suspend, or restrain the assessment, levy or collection of any tax under state law where a plain, speedy and efficient remedy may be had in the courts of such state.” Justice Kennedy, joined by Justices Rehnquist, Scalia, and Thomas in dissent, offers a logical objection: “the TIA protects the responsibility of the State
