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US Supreme Court to review incentives


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Sorry Vic, this case doesn't impact any of our incentives programs, as far as I can tell. I just looked it up.

The case is "DaimlerChrysler Corp. v. Cuno" and it relates to the "investment tax credit" in the Ohio Rev. Code section 5733.33. It is an industrial tax credit for purchasing manufacturing equipment - specifically car manufaturing machinery, in this case. From what I saw in the code, it is not analogous to any incentives program Jacksonville has used.

Also, the Federal Appeals Court has already ruled against these incentives (for that district). So the Supreme Court wouldn't be doing any further reigning in. The Supreme Court would either be upholding the previous ruling - thus keeping the status quo - or rejecting the ruling, thus once again expanding incentives. Even a Supreme Court affirmation wouldn't make most incentives programs invalid, in my estimation. The only incentives programs that would become presumptively invalid are those directly analogous to the Ohio program ... which I don't think they are.

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Well, I'm no lawyer, but if the Supreme Court upholds the lower court ruling, then the 'reigning in' that the lower court decided would be a change from the situation previously (in which tax credits were given) . Also, it could be used as a precedent for other court cases on similiar grounds. What is to prevent a court case on those grounds, using this case in the plantiff's argument?

Jax and FL do offer incentives for equipment in Enterprize Zones. See the link and read the part regarding Morris Communications.

Incentives for Morris Communications

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Well, the Ohio Federal Appeals court had ruled that those incentives were unconstitutional (within their jurisdiction). So those types of incentives are already illegal in Ohio, and whatever other states are in that federal district. So the Supreme Court's purpose isn't to decide whether to make incentives illegal. Rather, they are deciding whether it was constitutional for the lower court to declare those incentives illegal! It's an important distinction. Also, the motion for the Supreme Court to hear the case was made by the pro-incentives side (obviously, since they lost) - which at least theoretically suggests that by granting the motion the Supreme Court might be pre-disposed to reverse, not affirm. Otherwise, why even take the case at all? Perhaps if they wanted to "ban" incentives, but considering this is the court that just decided the Kelo emminent domain case ... I'm betting on "reverse."

But you are correct, if the Supreme Court affirms, the decision could spread to the entire country. It would really depend on how broadly the majority defines the issue in their opinion, I guess. For example, if the SC affirms - but does so by merely deciding that the Ohio court had the right to do what it did - the decision wouldn't impact the rest of the county. Whereas, if the SC affirms by declaring that something in the incentives statute inherently violates the constitution - then it could spread to the whole country. So it's an issue of whether the SC is reviewing a substantive or procedural issue. Based on the language of the motion, i suspect they are only concerned with procedure. (It would really really help if I bothered to research some more, but I've only looked at the motion and statute, not all the lower court cases.)

Does all that make sense? If it sounds convoluted, it probably is. The law is a stupid stupid thing.

Maybee Riversidegator can correct any blatant errors in my legal understanding.

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