LSCP, LLLP v. Kay-Decker

At issue in this appeal was the constitutionality of the statutory framework under which Iowa taxes the delivery of natural gas at variable tax rates depending on volume and the taxpayer’s geographic location within the state. Plaintiff filed with the Iowa Department of Revenue a claim for a refund of replacement tax Plaintiff paid for certain tax years, asserting that the replacement tax in Iowa Code 437A.5(2) violates the federal Equal Protection Clause, Iowa Const. art. I, 6, and the dormant Commerce Clause because it is based on the natural gas competitive service area in which a taxpayer is located. An administrative law judge denied Plaintiff’s refund claims and rejected the constitutional challenges to the replacement tax. The district court also denied each of Plaintiff’s constitutional challenges. The Supreme Court affirmed, holding (1) a rational basis exists for the variable excise tax imposed on the delivery of natural gas under section 437A.5, and therefore, Plaintiff failed to establish a violation of the Fourteenth Amendment or Iowa Const. art. I, 6; and (2) the natural gas delivery tax framework does not violate the dormant Commerce Clause. View "LSCP, LLLP v. Kay-Decker" on Justia Law