The Supreme Court has agreed to determine whether Ohio’s tax system discriminates against out-of-state natural gas suppliers.
Commerce Energy, a Costa Mesa, Calif.-based retail natural gas supplier, filed a lawsuit that accuses the state of unfairly offering tax exemptions to in-state gas suppliers.
Ohio Tax Commissioner Richard Levin sought to dismiss the lawsuit, arguing that federal tax law prohibits state tax disputes from being heard in federal courts.
The U.S. District Court for the Southern District of Ohio agreed, but a three-judge panel on the 6th U.S. Circuit Court of Appeals revered.
The court found that neither the Tax Injunction Act nor the general principles of comity barred the claim.
On Nov. 2, the Supreme Court agreed to hear the case. Oral arguments will take place later this winter.
Question presented: Does either the Tax Injunction Act, 28 U.S.C. § 1341, or comity principles bar federal court jurisdiction over a case alleging federal equal protection and dormant commerce clause claims when the plaintiffs do not challenge their own tax assessment and the relief sought is directed to specific tax exemptions or exclusions applicable to only four other taxpayers?
