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Illegality or Waste is Essential to Taxpayer Standing Analysis

By E.L. Lipman

A panel of the Minnesota Court of Appeals held today that absent evidence of an actual injury-in-fact, a taxpayer does not have standing (based upon his status as taxpayer) to challenge the constitutionality of an economic-development program which provides tax exemptions to other, specially-favored taxpayers.

Appellants Alec G. Olson and Butterworth Limited Partnership sought declarative and injunctive relief against state officials, seeking to bar them from ?acting as authorized by the Job Opportunity Building Zone Program and the Biotechnology and Health Sciences Industry Zone Program.? A lower court dismissed the suit on the grounds that the taxpayers lacked a sufficient injury to mount the challenge.

While the taxpayer-appellants argued that they had standing to challenge legislative actions which created an increase in the overall tax burden, the panel disagreed, holding that there must be a link between the taxpayer challenge and an ?illegal expenditure or waste of tax monies? in order for the taxpayers to meet the requirements of an injury-in-fact.

The panel?s complete analysis is accessible here.

Full post as published by Within the Scope on December 18, 2007 (boomark / email).