States Are Not Entitled to Windfalls in Tax Disputes, Supreme Court Rules
The Supreme Court unanimously ruled on Thursday that states which seize and sell private property to recoup unpaid taxes violate the Constitution’s takings clause if they retain more than what the taxpayer owed.
The case concerned a 94-year-old woman in Minnesota who had stopped paying property taxes on her condominium after moving into an assisted-living center.
By the time Hennepin County seized the property, the woman, Geraldine Tyler, owed about $2,000 in taxes and another $13,000 in penalties and interest. The county sold the condo at auction for $40,000, and it kept not only the $15,000 that all agreed it was due but also the remaining $25,000.
Retaining the entire value of a confiscated property, even when the debts owed amounted to a small portion of it, is authorized by Minnesota law.
Source: The New York Times
