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U.S. Supreme Court

Case Status

Decided

Docket Number

Term

Cert. Denied

Lower Court Opinion

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Questions Presented

Under the Due Process Clause, a law enlarging tax liability may be applied retroactively only insofar as it rationally furthers a legitimate legislative objective.  See, e.g., United States v. Carlton, 512 U.S. 26, 30-31 (1994). Applying that test, this Court has never endorsed a retroactive period of more than a year or two - that is, a period covering the year preceding the legislative session in which the law was enacted - as a rational means of furthering revenue goals or correcting asserted legislative mistakes in drafting tax laws. In the only case it has heard involving a longer period (twelve years), this Court invalidated the law. Nichols v. Coolidge, 274 U.S. 531, 542-43 (1927).

The question presented is whether, or under what circumstances, imposing additional tax beyond the year preceding the legislative session in which the law was enacted violates due process.

Case Updates

Cert. petition denied

October 13, 2015

U.S. Chamber urges Supreme Court to review case regarding retroactive taxation

July 29, 2015

The U.S. Chamber filed a brief urging the Supreme Court to grant certiorari to address whether a state statute imposing eight years of retroactive tax liability violates due process.

In its brief, the Chamber argues that retroactive application of tax laws for several years destroys settled expectations and chills investment. The brief also notes that the prevalence of states attempting to use retroactive taxation to fill budget gaps reinforces the need for Supreme Court review.

Pratik A. Shah, Z.W. Julius Chen, and Matthew A. Scarola of Akin Gump Strauss Hauer & Feld LLP served as co-counsel for the U.S. Chamber of Commerce on behalf of the U.S. Chamber Litigation Center.

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