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Keywords

plaintiffdiscriminationcorporationlegislative intent
plaintiffdiscriminationtax law

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Anderson v. Tiemann, 182 Neb. 393, 155 N.W.2d 322

Facts

The plaintiffs, which included domestic corporations and both resident and non-resident individuals, challenged the constitutionality of sections 14 through 137 of L.B. 377, enacted by the 1967 Legislature, claiming it violated the privileges and immunities and equal protection clauses of the Fourteenth Amendment. The District Court dismissed the petition, affirming the validity of the majority of the Act, with one exception regarding a portion of section 115 which was deemed invalid but severable.

The plaintiffs' first contention is that those provisions of L.B. 377 which attempt to make future laws of the United States relating to the federal income tax automatically effective as a part of the state income tax law are unconstitutional.

Issue

Whether the Nebraska Revenue Act of 1967, specifically the provisions limiting the food sales tax credit to residents, constitutes unjust discrimination under the privileges and immunities and equal protection clauses of the Fourteenth Amendment.

The allowance and limitation of the food sales tax credit only to residents does not constitute unjust or unreasonable discrimination under the privileges and immunities and equal protection clauses of the Fourteenth Amendment.

Rule

The court held that a tax classification, though discriminatory, is not arbitrary nor violative of the equal protection clause if any state of facts reasonably can be conceived that would sustain it.

A tax classification, though discriminatory, is not arbitrary nor violative of the equal protection clause of the Fourteenth Amendment if any state of facts reasonably can be conceived that would sustain it.

Analysis

The court analyzed the legislative intent behind the food sales tax credit and determined that the classification between residents and non-residents was based on reasonable distinctions. The court found that the legislature had valid reasons for limiting the credit to residents, as food purchases for personal use are closely related to the state of residence, particularly concerning the imposition of a state sales tax.

The cumulative effect of all these considerations is convincing. We think the clear purport and intent of the constitutional amendment was to grant the Legislature the authority to do exactly what it did.

Conclusion

The Supreme Court affirmed the District Court's decision, holding that the allowance and limitation of the food sales tax credit only to residents did not constitute unjust or unreasonable discrimination under the privileges and immunities and equal protection clauses of the Fourteenth Amendment.

Affirmed.

Who won?

The State of Nebraska prevailed in the case, as the court upheld the constitutionality of the Nebraska Revenue Act of 1967, finding that the provisions did not violate constitutional protections.

The district court held that sections 14 to 137, L.B. 377, were valid in all respects, with one exception dealing with a portion of section 115 which was held invalid but severable, and dismissed the plaintiffs' petition.

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