Tax News

CCH (cch.taxgroup.com) reports:

The North Carolina Court of Appeals has upheld a superior court's dismissal of an action that challenged the constitutionality of corporate income, corporate franchise, sales and use, and property tax benefits and other economic incentives and subsidies granted to Dell, Inc., a private-sector computer manufacturing corporation.
Although the Court of Appeals reversed the trial court's ruling that the plaintiffs lacked standing to bring their claims under the Public Purpose and Exclusive Emoluments Clauses, it upheld the trial court's finding that the plaintiffs had failed to state a claim for relief. In Maready v. City of Winston-Salem , 342 N.C. 708, 467 S.E.2d 615 (1996), the North Carolina Supreme Court held that economic incentives offered by governmental entities to a private business for the purposes of job creation and economic development fulfills a public purpose. In addition, the offering of such incentives does not constitute a prohibited exclusive emolument even though a private company might benefit from the incentives. As the plaintiffs failed to distinguish this case from Maready , the holding in Maready
controls.
The Court of Appeals also upheld the trial court's decision that the plaintiffs lacked standing under the state Uniformity of Taxation Clauses and the federal Dormant Commerce Clause as the plaintiffs failed to demonstrate that they belonged to a class that was prejudiced by the challenged statute.
Subscribers to CCH Tax Research NetWork may view the decision.
Blinson v. State of North Carolina , North Carolina Court of Appeals, NO. COA06-1258, October 16, 2007.