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. Employers should not have racially discriminating mind set. It has huge impact on the society what the big players do or don't do in the industry. Background check is conducted just to verify whether information provided by the prospective employee is correct or not. It doesn't have any direct combination with the rejection of the employees. If there is rejection, there should be something effective and full-proof things on the table that may keep the company or the people associated with it in jeopardy.

  2. Unlike the federal judge who refused to protect me, the Virginia State Bar gave me a hearing. After the hearing, the Virginia State Bar refused to discipline me. VSB said that attacking me with the court ADA coordinator had, " all the grace and charm of a drive-by shooting." One does wonder why the VSB was able to have a hearing and come to that conclusion, but the federal judge in Indiana slammed the door of the courthouse in my face.

  3. I agree. My husband has almost the exact same situation. Age states and all.

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  5. Andrew, if what you report is true, then it certainly is newsworthy. If what you report is false, then it certainly is newsworthy. Any journalists reading along??? And that same Coordinator blew me up real good as well, even destroying evidence to get the ordered wetwork done. There is a story here, if any have the moxie to go for it. Search ADA here for just some of my experiences with the court's junk yard dog. https://www.scribd.com/document/299040062/Brown-ind-Bar-memo-Pet-cert Yep, drive by shootings. The lawyers of the Old Dominion got that right. Career executions lacking any real semblance of due process. It is the ISC way ... under the bad shepard's leadership ... and a compliant, silent, boot-licking fifth estate.

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