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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  1. Indianapolis employers harassment among minorities AFRICAN Americans needs to be discussed the metro Indianapolis area is horrible when it comes to harassing African American employees especially in the local healthcare facilities. Racially profiling in the workplace is an major issue. Please make it better because I'm many civil rights leaders would come here and justify that Indiana is a state the WORKS only applies to Caucasian Americans especially in Hamilton county. Indiana targets African Americans in the workplace so when governor pence is trying to convince people to vote for him this would be awesome publicity for the Presidency Elections.

  2. Wishing Mary Willis only God's best, and superhuman strength, as she attempts to right a ship that too often strays far off course. May she never suffer this personal affect, as some do who attempt to change a broken system: https://www.youtube.com/watch?v=QojajMsd2nE

  3. Indiana's seatbelt law is not punishable as a crime. It is an infraction. Apparently some of our Circuit judges have deemed settled law inapplicable if it fails to fit their litmus test of political correctness. Extrapolating to redefine terms of behavior in a violation of immigration law to the entire body of criminal law leaves a smorgasbord of opportunity for judicial mischief.

  4. I wonder if $10 diversions for failure to wear seat belts are considered moral turpitude in federal immigration law like they are under Indiana law? Anyone know?

  5. What a fine article, thank you! I can testify firsthand and by detailed legal reports (at end of this note) as to the dire consequences of rejecting this truth from the fine article above: "The inclusion and expansion of this right [to jury] in Indiana’s Constitution is a clear reflection of our state’s intention to emphasize the importance of every Hoosier’s right to make their case in front of a jury of their peers." Over $20? Every Hoosier? Well then how about when your very vocation is on the line? How about instead of a jury of peers, one faces a bevy of political appointees, mini-czars, who care less about due process of the law than the real czars did? Instead of trial by jury, trial by ideological ordeal run by Orwellian agents? Well that is built into more than a few administrative law committees of the Ind S.Ct., and it is now being weaponized, as is revealed in articles posted at this ezine, to root out post moderns heresies like refusal to stand and pledge allegiance to all things politically correct. My career was burned at the stake for not so saluting, but I think I was just one of the early logs. Due, at least in part, to the removal of the jury from bar admission and bar discipline cases, many more fires will soon be lit. Perhaps one awaits you, dear heretic? Oh, at that Ind. article 12 plank about a remedy at law for every damage done ... ah, well, the founders evidently meant only for those damages done not by the government itself, rabid statists that they were. (Yes, that was sarcasm.) My written reports available here: Denied petition for cert (this time around): http://tinyurl.com/zdmawmw Denied petition for cert (from the 2009 denial and five year banishment): http://tinyurl.com/zcypybh Related, not written by me: Amicus brief: http://tinyurl.com/hvh7qgp

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