Fitzgerald v. Racing Association of Central Iowa, 539 U.S. 103, 5 (2003)

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Cite as: 539 U. S. 103 (2003)

Opinion of the Court

State shall . . . deny to any person . . . the equal protection of the laws," 1. The law in question does not distinguish on the basis of, for example, race or gender. See, e. g., Loving v. Virginia, 388 U. S. 1 (1967); United States v. Virginia, 518 U. S. 515 (1996). It does not distinguish between in-state and out-of-state businesses. See, e. g., Metropolitan Life Ins. Co. v. Ward, 470 U. S. 869 (1985). Neither does it favor a State's long-time residents at the expense of residents who have more recently arrived from other States. Cf. Hooper v. Bernalillo County Assessor, 472 U. S. 612 (1985). Rather, the law distinguishes for tax purposes among revenues obtained within the State of Iowa by two enterprises, each of which does business in the State. Where that is so, the law is subject to rational-basis review:

"[T]he Equal Protection Clause is satisfied so long as there is a plausible policy reason for the classification, the legislative facts on which the classification is apparently based rationally may have been considered to be true by the governmental decisionmaker, and the relationship of the classification to its goal is not so attenuated as to render the distinction arbitrary or irrational." Nordlinger v. Hahn, 505 U. S. 1, 11-12 (1992) (citations omitted).

See also id., at 11 (rational-basis review "is especially defer-ential in the context of classifications made by complex tax laws"); Allied Stores of Ohio, Inc. v. Bowers, 358 U. S. 522, 527 (1959) (the Equal Protection Clause requires States, when enacting tax laws, to "proceed upon a rational basis" and not to "resort to a classification that is palpably arbitrary").

The Iowa Supreme Court found that the 20 percent/36 percent tax rate differential failed to meet this standard because, in its view, that difference "frustrated" what it saw as the law's basic objective, namely, rescuing the racetracks from economic distress. 648 N. W. 2d, at 561. And

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