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State Tax Notes

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St. Tax Notes



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We are engaged in a two-part exploration. The previous installment of our column reviewed the perennial question of whether a given state or local exaction should be classified as a tax or something else. It rehearsed the contexts in which the issue has arisen in state and local tax controversies, the practical stakes involved in those controversies, and the criteria courts have developed to distinguish between truces and other types of governmental levies.

The previous installment also said that a new source of guidance as to the “what constitutes a tax?” question is developing: litigation over the individual mandate and shared responsibility payment (SRP) portions of the Patient Protection and Affordable Care Act of 2010 (PPACA), so-called Obamacare. The current installment of our column details how the PPACA litigation sheds light on what constitutes a tax.

The first part of this installment lays the foundation by developing how the tax classification issue arises under challenges to the PPACA. The second part sketches prominent arguments that have been advanced in the PPACA litigation to date regarding whether the SRP constitutes a tax. The third part describes the principal effects that the PPACA arguments may have on future state and local litigation on the “what is a tax?” question.


© 2012 Steve R. Johnson


First published in State Tax Notes.

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