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. by the time anybody gets to such files they will probably have been totally vacuumed anyways. they're pros at this at universities. anything to protect their incomes. Still, a laudable attempt. Let's go for throat though: how about the idea of unionizing football college football players so they can get a fair shake for their work? then if one of the players is a pain in the neck cut them loose instead of protecting them. if that kills the big programs, great, what do they have to do with learning anyways? nada. just another way for universities to rake in the billions even as they skate from paying taxes with their bogus "nonprofit" status.

  2. Um the affidavit from the lawyer is admissible, competent evidence of reasonableness itself. And anybody who had done law work in small claims court would not have blinked at that modest fee. Where do judges come up with this stuff? Somebody is showing a lack of experience and it wasn't the lawyers

  3. My children were taken away a year ago due to drugs, and u struggled to get things on track, and now that I have been passing drug screens for almost 6 months now and not missing visits they have already filed to take my rights away. I need help.....I can't loose my babies. Plz feel free to call if u can help. Sarah at 765-865-7589

  4. Females now rule over every appellate court in Indiana, and from the federal southern district, as well as at the head of many judicial agencies. Give me a break, ladies! Can we men organize guy-only clubs to tell our sob stories about being too sexy for our shirts and not being picked for appellate court openings? Nope, that would be sexist! Ah modernity, such a ball of confusion. https://www.youtube.com/watch?v=QmRsWdK0PRI

  5. LOL thanks Jennifer, thanks to me for reading, but not reading closely enough! I thought about it after posting and realized such is just what was reported. My bad. NOW ... how about reporting who the attorneys were raking in the Purdue alum dollars?

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