ILNews

Court: business license fee not a tax

Rebecca Berfanger
January 1, 2008
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The Indiana Court of Appeals today affirmed summary judgment for the city of Hammond, where an attorney who practices law there contested an ordinance that would charge a fee to have a business license. The lawyer claimed the fee was tantamount to a tax.

In the opinion, David Paul Allen v. City of Hammond, 45A03-0708-CV-372, it states that on July 28, 2005, Allen filed a complaint for declaratory judgment against the city to invalidate the ordinance requiring businesses to have a license.

On Sept. 29, 2006, he filed a motion for partial summary judgment. The city responded and moved for summary judgment Nov. 21, 2006. The trial court conducted a hearing June 7, 2007, on the cross-motions for summary judgment. On July 3, 2007, the trial court denied Allen's motion for summary judgment and granted the city's motion for summary judgment. Allen appealed.

If the city was charging an additional tax to business owners, it would not be allowed under Indiana's Home Rule Act, which states the city is not permitted to impose a tax that is "greater than that reasonably related to the administrative cost of exercising a regulatory power," according to Indiana Code 36-1-3-8(a).

The parties agreed about the Home Rule Act but disagreed as to whether the business license fee is a valid regulatory fee and not a tax, and if the fee is greater than that reasonably related to the cost of exercising the regulatory power.

Allen claimed that prior to filing his complaint, he requested access to various public records including committee reports and calculations of the administrative costs associated with regulating business. Allen was unable to obtain these documents because the city did not have such documents.

Allen claimed that the absence of this information prior to the enactment of Ordinance 8590 showed that the $100 fee was a revenue measure and not a valid license fee.

However, in her affidavit, the city controller stated that the 2006 annual budget for the police department was more than $20 million, fire department was almost $15 million, and the budget for code enforcement was $474,000. The business license fees generated $50,300 in 2006.

The city also presented evidence from the license clerk, a person who works in accounts receivable, a police officer, and the chief fire inspector as to the administrative costs associated with the issuance of business licenses.

"We will not compute the difference between administrative costs and the amounts collected to determine the reasonableness of the $100 business license fee," Judge Michael Barnes wrote.

The Court of Appeals affirmed the trial court's July 3, 2007, decision to deny Allen's motion for summary judgment and grant the city's motion for summary judgment, concluding that "Allen has not established that ordinance 8590 is invalid," wrote Judge Barnes.

"Because there are no genuine issues of material fact and the city has established it is entitled to judgment as a matter of law, the trial court properly granted the city's motion for summary judgment and denied Allen's motion for summary judgment. We affirm."
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  3. The practitioners and judges who hail E-filing as the Saviour of the West need to contain their respective excitements. E-filing is federal court requires the practitioner to cram his motion practice into pigeonholes created by IT people. Compound motions or those seeking alternative relief are effectively barred, unless the practitioner wants to receive a tart note from some functionary admonishing about the "problem". E-filing is just another method by which courts and judges transfer their burden to practitioners, who are the really the only powerless components of the system. Of COURSE it is easier for the court to require all of its imput to conform to certain formats, but this imposition does NOT improve the quality of the practice of law and does NOT improve the ability of the practitioner to advocate for his client or to fashion pleadings that exactly conform to his client's best interests. And we should be very wary of the disingenuous pablum about the costs. The courts will find a way to stick it to the practitioner. Lake County is a VERY good example of this rapaciousness. Any one who does not believe this is invited to review the various special fees that system imposes upon practitioners- as practitioners- and upon each case ON TOP of the court costs normal in every case manually filed. Jurisprudence according to Aldous Huxley.

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  5. Can we get full disclosure on lobbyist's payments to legislatures such as Mr Buck? AS long as there are idiots that are disrespectful of neighbors and intent on shooting fireworks every night, some kind of regulations are needed.

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