Amicus Brief — Limbach v. Hooven & Allison Co.

we

a >

yw No. 83-96

In Tue

Supreme Court of the United States

Ocroser Term, 1982

a: pee

JOANNE LIMBAOH,

TAX COMMISSIONER OF OHIO,

Petitioner,

vs.

THE HOOVEN & ALLISON COMPANY,

Respondent.

On Petition For Writ Of Certiorari To

The Supreme Court Of Ohio

MOTION FOR LEAVE TO FILE BRIEF AMICUS CURIAE

AND BRIEF AMICUS CURIAE OF THE

INTERNATIONAL ASSOCIATION OF ASSESSING OFFICERS

JAMES F. GOSSETT

Association Counsel

International Association

of Assessing Officers

1313 East 60th Street

Chicago, Illinois 60637-9990

(312) 947-2053

Attorney for Amicus Curiae, 1AAO

nL STS

Midwest Law Printing Co., Chicago 60611, (818) 321-0820

In Tue

Supreme Court of the United States

Ocroser Term, 1982

JOANNE LIMBAOCH,

TAX COMMISSIONER OF OHIO,

Petitioner,

vs.

THE HOOVEN & ALLISON COMPANY,

Respondent:

————

On Petition For Writ Of Certiorari To

The Supreme Court Of Ohio

MOTION FOR LEAVE TO FILE

BRIEF AMICUS CURIAE OF

THE INTERNATIONAL ASSCCIATION

OF ASSESSING OFFICERS

The International Association of Assessing Officers

hereby respectfully moves for leave to file a brief amicus

curiae in the above-captioned case in support of the Peti-

tioner. The consent of the attorneys for the Petitioner has

been obtained, and they have advised counsel for the

International Association of Assessing Officers in tele-

phone conversations that they will forward their written

consent to the Clerk of the Supreme Court. The consent

of the attorney for the Respondent was sought, but he

a

did not return phone calls placed by counsel for the Inter-

national Association of Assessing Officers.

The International Association of Assessing Officers (LAAO)

has approximately 7,800 members. Most of the members are

employees of state and local governments. The members

reside in all 50 states and other countries. The Associ-

ation is primarily interested in property tax assessment.

The eight objectives of IAAO as stated in the IAAO Con-

stitution, Art. 1, Sec. 2, amended as of November 15,

1982, are as follows: (1) to improve the standards of

assessment practice; (2) to educate those engaged in

assessment practice; (3) to elevate the standards of per-

sonnel requirements in assessment offices; (4) to educate

the general public in matters relating to assessment prac-

tice; (5) to engage in research and to publish the results

of studies in assessment administration; (6) to provide a

clearing-house for the collection and distribution of useful

information relating to assessment practice; (7) to co-

operate with other public and private agencies interested

in improving assessment administration; and (8) to pro-

mote justice and equality in the distribution of the prop-

erty tax burden.

Although most of the members_of the Association are

engaged in assessment administration for property tax

purposes at the state and local levels of government, the

Association is not a “trade union” for assessors, but rather,

is a nonprofit, educational institution interested in pro-

moting proper and equitable property taxation. In that

role, the Association has often been invited to present tes-

timony to Congress and to state and local legislative bodies

when proposals relating to the property tax have been

considered. In a related effort, the Association also sub-

mits amicus curiae briefs in court cases that might have

a substantial impact on the property tax and/or the assess-

ment profession.

ion

The case before the Court could have such a substan-

tial impact. As noted in the Petition for Writ of Certiorari

(p. 16), the decision of the Supreme Court in the instant

case could have a significant detrimental effect upon the

finances of the State of Ohio if the Court rules for the

Respondent. Other states could be affected in a similar

manner, since at least 18 of them, according to the Associ-

ation’s records, levy taxes on raw materials like the sub-

ject property in the instant case. The state and local

governments which employ most of the members of the

amicus Association would lose much badly needed revenue

if the Court’s decision in this case results in the auto-

matic exemption of imported raw materials from ad

valorem taxation where the imports remain in their

original packages, or if the Court holds that collateral

estoppel prevents Ohio from levying such taxes in the case

at bar. In either event, litigation expenses associated

with assessment appeals resulting from the resuscitation

of the “original package” doctrine would also drain state

and local treasuries, since assessing officers have believed

for years that the original package doctrine was justifiably

put to death by this Court in Michelin Tire Corp. v.

Wages, 423 U.S. 276 (1976), and have not referred to that

doctrine in determining whether imports should be taxed,

even where identical goods under identical ownership

were held exempt from taxation under the original

package doctrine in court cases preceding the Michelin

decision.

Aside from the financial impact the instant case could

have upon state and local government, the amicus Associ-

ation anticipates gross inequities in ad valorem property

tax burdens resulting from a decision for the Respondent

in the case at bar. Imported raw materials stored in their”

original packages could be exempted from taxation, while

sail

imported raw materials removed from their original pack-

ages, or not packaged at all, would be subject to taxes,

along with domestically produced manufacturers’ inven-

tories. Raw materials belonging to property owners who

were in operation before the Michelin decision, and who

successfully appealed assessments on identical materials,

obtaining a judicial ruling that the goods were exempt

under the original package doctrine, could not be taxable

by state and local governments, while all other imported

raw materials would be taxable.

Exemptions of the sort proposed by the Respondent for

its raw materials also tend to result in increased taxa-

tion of non-exempt properties and/or a reduced level of

state and local government services to the citizenry. Such

developments are of vital interest to all state and local

government employees, and particularly those who ad-

minister the property tax, as well as others who have

dedicated themselves to making the property tax a more

viable and equitable method of taxation.

The amicus Association is in a unique position to assess

for the Court the probable impact of a decision for the

Respondent in this case. The Association is aware of the

extent to which property has already been exempted from

taxation in the United States and around the world, and

of the damage, in terms of assessment inequity and re-

duced state and local government services, which has been

partly caused by current exemptions. Yet the Association

is aware that responsible and humane public policy re-

quires that many property tax exemptions continue to

exist, and the iation can view the potential costs and

benefits of a ruling for the Respondent in this case with

a certain objectivity that neither of the parties to the case

can be expected to demonstrate.

naliiics

Because of the Association’s interest in the outcome of

this case and because the Petitioner cannot fairly be ex-

pected to address in a complete fashion the broader impli-

cations of the Respondent’s contentions, the International

Association of Assessing Officers respectfully requests

leave to file the attached brief amicus curiae. The argu-

ments set forth in the brief amicus curiae are relevant

to disposition of this case.

Respectfully submitted,

JAMES F. GOSSETT

Association Counsel

International Association

of Assessing Officers

1313 E. 60th Street

Chicago, Illinois 60637-9990

(312) 947-2053

Attorney for Amicus Curiae, [AAO

TABLE OF CONTENTS

TABLE OF AUTHORITIES ................. ii

INTEREST OF AMICUS CURIAE ..........

SUMMARY OF ARGUMENT ................ 3

ARGUMENT:

1.

THIS COURT SHOULD HOLD THAT THE

PETITIONER’S LEVYING OF AN AD

VALOREM PERSONAL PROPERTY TAX

UPON THE SUBJECT IMPORTED RAW MaA-

TERIALS BELONGING TO THE RESPOND-

ENT IS NOT BARRED BY THE DOCTRINE

OF COLLATERAL ESTOPPEL ............ 5

2.

THIS COURT SHOULD HOLD THAT THE

PETITIONER’S LEVYING OF AN AD

VALOREM PERSONAL PROPERTY TAX

UPON THB SUBJECT IMPORTED RAW MA.-

TERIALS BELONGING TO THE RESPOND-

ENT IS NOT PROHIBITED BY THE IMPORT-

EXPORT CLAUSE OF THE UNITED STATES

CRIUPEEEEUIN Woo cccccosTevestevecdsece 10

ET Sancericcine kedenseaneusddinene’ 13

ii

TABLE OF AUTHORITIES

Cases

Blair v. Commissioner, 30 U.S. 5 (1937) ...... 8

Commissioner v. Sunnen, 333 U.S. 591 (1948) . passim

Hooven & Allison Co. v. Evatt, 324 U.S. 652

CN ois cp bok ba huknes Cae Rake ee 3,5

Low v. Austin, 80 U.S. (13 Wall.) 29 (1872) .. 6,7, 11

Michelin Tire Corp. v. Wages, 423 U.S. 276

SEPTEE daccaus Wheladiievaccseuseeyeyuaan ie passim

Tait v. Western Md. R. Co., 289 U.S. 620 (1933) . 8

Constitutional Provisions

Article I, Section 10, clause 2, United States Con-

stitution, Import-Export Clause .......... 4, 10, 13

Other Authorities

American Law Reports Annotated, 150 A.L.R. 38,

s. 162 A.L.R. 1211, 92 L.2d 940 ........... 9

Ix Tue

Supreme Court of the United States

Ocroser Term, 1982

JOANNE LIMBACH,

TAX COMMISSIONER OF OHIO,

Petitioner,

vs.

THE HOOVEN & ALLISON COMPANY,

Respondent.

On Petition For Writ Of Certiorari To

The Supreme Court Of Ohio

BRIEF AMICUS CURIAE OF

THE INTERNATIONAL ASSOCIATION

OF ASSESSING OFFICERS

INTEREST OF AMICUS CURIAE

The International Association of Assessing Officers (LAAO)

has approximately 7,800 members. Most of the members are

employees of state and local governments. The members

reside in all 50 states and in other countries. The Associ-

ation is primarily interested in property tax assessment.

ols:

The eight objectives of IAAO as stated in the IAAO

Constitution, Art. 1, Sec. 2, amended as of November

15, 1982, are as follows: (1) to improve the standards

of assessment practice; (2) to educate those engaged in

assessment practice; (3) to elevate the standards of per-

sonnel requirements in assessment offices; (4) to educate

the general public in matters relating to assessment prac-

tice; (5) to engage in research and to publish the results

of studies in assessment administration; (6) to provide a

clearing-house for the collection and distribution of useful

information relating to assessment practice; (7) to co-

operate with other public and private agencies interested

in improving assessment administration; and (8) to pro-

mote justice and equity in the distribution of the prop-

erty tax burden.

The Association is not a “trade union’ for assessors,

but rather, is a nonprofit educational institution interested

in promoting proper and equitable property taxation.

Consequently, IAAO is concerned about assessment in-

equities that will result if the Court adopts the Respond-

ent’s theory that imported raw materials in their original

packages and held for use in manufacturing within the

state cannot be subjected to non-discriminatory ad

valorem property taxation, along with other raw materials

stored for use in manufacturing. [AAO is concerned about

the inequities that will result if the Court affirms the deci-

sion of the Supreme Court of Ohio, which misinterprets

the doctrine of collateral estoppel and the ruling of the

Supreme Court of the United States in Commissioner v.

Sunnen, 333 U.S. 591 (1948), so as to make one manu-

facturer perpetually immune from ad valorem property

taxation on its imported raw materials while all other

businesses’ imported goods, including raw materials, are

subject to nondiscriminatory ad valorem property taxation

sails:

because of a change in the controlling legal principles ap-

plicable to imports, announced by the Supreme Court of

the United States in Michelin Tire Corp. v. Wages, 423

U.S. 276 (1976). IAAO is concerned about the mountain

of costly litigation that will result if the “original package”’

doctrine, rightly considered by most state and local gov-

ernment officials as buried by the Supreme Court of the

United States in the Michelin case, is resurrected through

a decision favoring the Respondent in the case at bar.

Finally, IAAO is concerned about the loss of badly needed

revenue which state and local governments may suffer if

the Respondent prevails in this case. IAAO believes that

neither the collateral estoppel doctrine, nor the U.S. Con-

stitution prohibits Ohio’s levying of non-discriminatory ad

valorem personal property taxes on the Respondent’s im-

ported raw materials, and that the Court should rule

accordingly.

SUMMARY OF ARGUMENT

We submit that the Supreme Court of Ohio erred in

concluding that the Petitioner’s levying of taxes upon the

Respondent’s imported raw material inventory was col-

laterally estopped by a decision of the Supreme Court of

the United States in Hooven & Allison Co. v. Evatt, 324

U.S. 652 (1945) (Hooven I) Under the principles enunci-

ated by the Court in Commissioner v. Sunnen, 333 U.S.

591 (1948), application of the collateral estoppel doctrine

in the case at bar was precluded by the Court’s decision

in Michelin Tire Corp. v. Wages, 423 U.S. 276 (1976),

which so altered the legal atmosphere relative to the

lies

constitutionality of personal property taxation of imports

as to eviscerate the Respondent’s collateral estoppel

claims. The application of the Sunnen ruling in this case

is not foreclosed simply because the Michelin Court did

not specifically overrule Hooven I, and the application of

the Sunnen ruling in the case at bar is, in fact, required

in order to avoid inequalities in the administration of the

revenue laws, discriminatory distinctions in tax liability,

and litigious confusion. Accordingly, the Court should hold

that the Petitioner’s levying of an ad valorem tax upon

the subject imported raw materials belonging to the Re-

spondent is not barred by the doctrine of collateral

estoppel.

The amicus IAAO also submits that the Court should

decide the constitutional issues raised by the parties in

favor of the Petitioner. The Michelin Court held that im-

position of a non-discriminatory ad valorem personal prop-

erty tax on imported goods held for sale is not within

the constitutional prohibition against laying ‘any Imposts

or Duties on Imports.” The same analysis that led the

Michelin Court to its decision also leads to the conclu-

sion that imported raw materials may be subjected to non-

discriminatory taxation of the sort imposed by Ohio in

the case at bar, and such a determination is required in

order that assessment inequities may be avoided and

much needed revenue will not be denied to hard-pressed

state and local governments. Therefore, the Court should

hold that the Petitioner’s levying of an ad valorem per-

sonal property tax upon the subject imported raw ma-

terials belonging to the Respondent is not prohibited by

the Import-Export Clause of the Constitution.

a a

ARGUMENT

1

THIS COURT SHOULD HOLD THAT THE PETI-

TIONER’S LEVYING OF AN AD VALOREM PERSONAL

PROPERTY TAX UPON THE SUBJECT IMPORTED RAW

MATERIALS BELONGING TO THE RESPONDENT IS

NOT BARRED BY THE DOCTRINE OF COLLATERAL

ESTOPPEL.

In this proceeding involving the Respondent’s applica-

tion for a review and redetermination of the Petitioner’s

decision that the value of the Respondent’s imported raw

material inventory is subject to non-discriminatory ad

valorem personal property taxes, the Supreme Court of

Ohio found that the Petitioner’s levying of taxes upon the

subject property was collaterally estopped by a decision

of the Supreme Court of the United States in Hooven &

Allison Co. v. Evatt, 324 U.S. 652 (1945) (hereafter re-

ferred to as Hooven I). In that case, the Court, relying

upon the “original package’”’ doctrine, held that the Re-

spondent could not be taxed based upon the value of im-

ported raw materials stored in their original packages in

the Respondent’s warehouses. Hooven I, 324 U.S. 652,

668.

Where the Supreme Court of Ohio erred was in reject-

ing the Petitioner’s argument that the decision of this

Court in Michelin Tire Corp. v. Wages, 423 U.S. 276

(1976), so altered the “legal atmosphere” relative to the

constitutionality of personal property taxation of imports

as to eviscerate the Respondent’s collateral estoppel

claims. A careful reading of the Michelin decision and the

decision of this Court in Commissioner v. Sunnen, 333

U.S. 591 (1948), provides ample evidence that collateral

estoppel should not have been applied in the case at bar.

ili

In the Sunnen case, the Supreme Court limited applica-

tion of the collateral estoppel doctrine, holding that the

doctrine is inapplicable where decisions of the Supreme

Court intervening between the earlier and later litigation

have changed the pertinent legal principles upon which

the earlier court decision was based. Commissioner v.

Sunnen, 333 U.S. 591, 599-601. Thus, the decision of the

Court in Sunnen precludes application of collateral estop-

pel in the case at bar, since the Court in Michelin, inter-

vening between Hooven I and the current litigation, aban-

doned the original package doctrine upon which Hooven

I was based, at least with respect to its application in

cases involving non-discriminatory property taxes (Miche-

lin Tire Corp. v. Wages, 423 U.S. 276, 296-97), and specifi-

cally overruled Low v. Austin, 80 U.S. (13 Wall.) 29 (1872),

the case from which the original package doctrine sprung

(Michelin Tire Corp. v. Wages, 423 U.S. 276, 301). A better

example of a case changing the legal principles upon which

an earlier decision was based would be difficult to imagine,

although it must be admitted that only the theory sup-

porting the Hooven I decision was a casualty of the

Michelin case. Hooven I itself was not specifically over-

ruled in Michelin, probably because the two cases in-

volved somewhat different fact situations and the over-

ruling of Hooven I was not immediately required.

The Supreme Court of Ohio, in its decision below, seems

to indicate that the Sunnen case does not control resolu-

tion of the collateral estoppel question in the case at bar

because the Michelin Court did not specifically overrule

Hooven I. But it is in just such cases as the instant one,

where the earlier court decision involving the same par-

ties has not been specifically overruled by the interven-

ing decision of the Supreme Court, that the Sunnen deci-

sion was meant to be controlling. In Sunnen itself, no in-

tervening reversal of the earlier decision, but a “change

= Ss

in the legal picture,” involving a “‘clarification and

growth” of principles, and arising from several interven-

ing U.S. Supreme Court decisions, made the doctrine of

collateral estoppel inapplicable. Commissioner v. Sunnen,

333 U.S. 591, 602-606. No intervening reversal of the

earlier decision was even mentioned in the Sunnen Court’s

opinion, which is significant considering that any such in-

tervening reversal would certainly have controlled the

Sunnen case. Had there been a specific reversal of

the earlier decision when the Court decided the interven-

ing cases, the Court would have had a much easier time

disposing of the Sunnen case, and would not have been

required to articulate at length the “changing legal prin-

ciples” limitation upon collateral estoppel.

It should also be noted that the reasoning of the court

below would require the Supreme Court of the United

States, whenever it overruled a leading case like Low v.

Austin, to specifically overrule each and every other case

decision relying upon the leading case, in order to pre-

vent application of collateral estoppel in later cases in-

volving the same parties and issues. This heavy burden

the Sunnen Court possibly sought to avoid by its develop-

ment of the “changing legal principles” limitation.

In developing its own very important limitation upon

the collateral estoppel doctrine, the Sunnen Court was

aware that many inequalities and much unnecessary ex-

pense could result from improper application of collateral

estoppel. The Court warned of certain harmful conse-

quences of collateral estoppel much like those the Peti-

tioner and the amicus IAAO are trying to avoid in the

instant case, writing as follows, 333 U.S. at 599:

‘““A taxpayer may secure a judicial determination of

a particular tax matter, a matter which may recur

without substantial variation for some years there-

after. But a subsequent modification of the signifi-

ae

cant facts or a change or development in the con-

trolling legal principles may make that determination

obsolete or erroneous, at least for future purposes.

If such a determination is then perpetuated each suc-

ceeding year as to the taxpayer involved in the

original litigation, he is accorded a tax treatment

ifferent from that given to other taxpayers of the

same class. As a result, there are inequalities in the

administration of the revenue laws, discriminatory

distinctions in tax liability, and a fertile basis for

litigious confusion (citations omitted). Such con-

sequences, however, are neither necessitated nor

justified by the principle of collateral estoppel. That

principle is designed to prevent repetitious lawsuits

over matters which have once been decided and

which have remained substantially static, factually

and legally. It is not meant to create vested rights

in decisions that have become obsolete or erroneous

with time, thereby causing inequities among tax-

payers.”

Keeping in mind that “collateral estoppel must be used

with its limitations carefully in mind so as to avoid in-

justice,” 333 U.S. at 599, the Swnnen Court reviewed the

limitations that had been placed upon collateral estoppel

in prior judicial decisions. Citing Tait v. Western Md. R.

Co., 289 U.S. 620 (1933), the Court noted that the use

of the collateral estoppel doctrine must be confined to situ-

ations where the matter raised in the second suit is iden-

tical in all respects with that decided in the first pro-

ceeding and where the controlling facts and applicable

legal rules remain unchanged. 333 U.S. at 599-600. The

Sunnen Court also noted that in Blair v. Commissioner,

30 U.S. 5 (1987), it was held that an intervening state

court decision could ‘‘so change the legal atmosphere as

to render the rule of collateral estoppel inapplicable.” 333

U.S. at 600. Then, the Suwnnen Court expanded upon the

Blair ruling by declaring that “the intervening decision

veil

need not necessarily be that of a state court, as it was

in the Blair case. While such a state court decision may

be considered as having changed the facts for federal tax

litigation purposes, a modification or growth in legal prin-

ciples as enunciated in intervening decisions of this Court

may also effect a significant change in the situation. Tax

inequality can result as readily from neglecting legal

modulations by this Court as from disregarding factual

changes wrought by state courts. In either event, the

supervening decision cannot justly be ignored by blind

reliance upon the rule of collateral estoppel.’ 333 U.S.

at 600.!

The Sunnen Court did not ignore the ‘“supervening”’

decisions facing it, and neither should the Court in the

case at bar. Matters involving taxation of imported in-

ventories have not remained ‘‘substantially static’”’ since

Hooven I, and the Court must hold that the Sunnen deci-

sion precludes application of collateral estoppel in the case

1 Authorities supporting other limitations upon the doctrine of

collateral estoppel, some of which seem to be applicable to the

case at bar, are noted in 150 A.L.R. 38, s. 162 A.L.R. 1211, 92

L.2d 940. Among these are cases supporting the notion that col-

lateral estoppel can only be applied properly when the facts that

are the basis of the issue in the subsequent proceeding are not

- only substantially identical, but also, in period of time, are the

very same facts that, as the subject of the former litigation, were

before the court rendering the former judgment. 150 A.L.R. 38,

43-45. In addition, there are cases supporting the principle that

collateral estoppel cannot be pee ia to questions of law,

as opposed to questions of fact. 150 A.L.R. 38, 47. In the case

a bar, the facts are not the very same facts that faced the Court

in Hooven I, in that different shipments of substantially identical

raw materials are involved; and the question to which collateral

estoppel was applied by the Supreme Court of Ohio—whether non-

discriminatory ad valorem taxes on imported raw materials stored

in their original packages for future manufacturing use are

constitutional—is a question of law, not fact.

=u.

at bar to prevent the very same kinds of inequalities in

tax administration and litigious confusion that the Sun-

nen Court feared. Therefore, the amicus IAAO respect-

fully submits that the Court should hold that the Peti-

tioner’s levying of an ad valorem personal property tax

upon the subject imported raw materials belonging to the

Respondent is not barred by the doctrine of collateral

estoppel.

2

THIS COURT SHOULD HOLD THAT THE PETI-

TIONER’S LEVYING OF AN AD VALOREM PERSONAL

PROPERTY TAX UPON THE SUBJECT IMPORTED RAW

MATERIALS BELONGING TO THE RESPONDENT IS

NOT PROHIBITED BY THE IMPORT-EXPORT CLAUSE

OF THE UNITED STATES CONSTITUTION.

Although the Supreme Court of Ohio declined to address

constitutional issues raised by the Respondent in its ap-

plication for review and redetermination because the Ohio

court held that the Petitioner was collaterally estopped

from collecting the disputed taxes, the Petitioner has

raised the question of whether the levying of an ad

valorem personal property tax upon the subject raw

materials belonging to the Respondent was prohibited by

the Import-Export Clause of the United States Constitu-

tion (art. 1, §10, cl. 2). The amicus IAAO believes that

a non-discriminatory ad valorem tax like Ohio’s, applied

to imported raw materials stored in their original pack-

ages for future use in manufacturing, is not prohibited

by the Import-Export Clause, and that this Court should

so hold.

As noted above, the Michelin Court largely repudiated

the original package doctrine, which the Respondent

would use to shield its raw materials from taxation.

ee | on

Michelin Tire Corp. v. Wages, 423 U.S. 276, 296-97. In

fact, the Michelin Court held that Georgia’s imposition

of a non-discriminatory ad valorem personal property tax

on an inventory of tires in storage was not within the

constitutional prohibition against laying “any Imposts or

Duties on Imports,” without addressing the question of

whether the Georgia Supreme Court was correct in hold-

ing that the tires had lost their status as imports. 423

U.S. 276, 279. The Court was able to reach this conclu-

sion because its own independent study persuaded the

Court that a non-discriminatory ad valorem property tax

is not the type of state exaction which the framers of the

U.S. Constitution had in mind as being an “‘impost” or

“duty.” 423 U.S. 276, 283.

The case at bar, like Hooven I, does not deal with taxes

on “goods” for sale, like tires, but with taxes on raw ma-

terials to be used in manufacturing. This fact may explain

why the Michelin Court did not specifically overrule

Hooven I when it overruled Low v. Austin, 80 U.S. (13

Wall.) 29 (1872), another decision involving “goods” (wine).

Perhaps, the Michelin Court wanted to reserve judgment

on the question of whether ad valorem taxes on raw ma-

terials should be treated in the same way as the taxes

on the “goods” in Michelin for purposes of Import-Export

Clause analysis.

In any event, the same analysis that led the Michelin

Court to conclude that non-discriminatory ad valorem

property taxes on “goods” are not “imposts”’ or “duties”

also leads to the conclusion that imported raw materials

may be subjected to non-discriminatory taxation. Nothing

in the Constitution itself, or in the authorities cited in

the Michelin decision, supports a distinction between

“goods” and raw materials for purposes of determining

the constitutionality of ad valorem property taxes under

the Import-Export Clause of the Constitution. If the

Import-Export Clause “cannot be read to accord imported

goods preferential treatment that permits escape from uni-

form taxes imposed without regard to foreign origin for

services which the State supplies,” 423 U.S. at 287, the

Import-Export Clause likewise accords no preferential

treatment to imported raw materials.

It is preferential treatment, however, that the Respond-

ent is seeking in the case at bar. Should the Court rule

for the Respondent, holding that the Petitioner’s non-

discriminatory ad valorem property tax cannot constitu-

tionally be levied on the Respondent’s inventory of raw

materials, the Court would be approving an exemption

from property taxation that would ultimately discriminate

against other raw materials produced in the United

States, other imported raw materials no longer in their

original packages, other imported raw materials not

packaged at all, and inventories other than raw materials,

creating assessment inequities at the state and local level,

producing mountains of litigation, and at the same time

denying much needed revenue to hard-pressed state and

local governments.

Added to the enormous amount of property that is

already exempt from state and local taxation, the prop-

erty which the Respondent proposes to exempt, belong-

ing to itself and to other manufacturers, would constitute

a burden to state and local governments, and the exemp-

tion would likely contribute to the constant raising of

taxes on nonex¢mpt property, and the reduction of state

and local government services, which have accompanied

the sizeable increases we have seen lately in the types

of property and the types of property owners that are

eligible for ad valorem tax exemptions.

When one property is exempted from taxation, owners

of other property tend to bear a greater tax burden as

a result. Thus, not only will owners of other inventories

not exempted from taxation be at a disadvantage as a

result of a ruling for the Respondent in the case at bar,

but also, owners of nonexempt property in general will

be at a disadvantage. Further promoting of this kind of

assessment inequity, which allows some property owners

to pay no tax at all, while their neighbors are forced to

settle for a reduction in state and local government serv-

ices, or bear more than their fair share of the ever-

increasing cost of government services, should be done

only with the very greatest care, and there is no reason

for such action in the case at bar.

CONCLUSION

We respectfully conclude that this Court should hold

that the Petitioner’s levying of an ad valorem personal

property tax upon the subject imported raw materials

belonging to the Respondent is not barred by the doc-

trine of collateral estoppel or prohibited by the Import-

Export Clause of the United States Constitution (art. 1,

§10, cl. 2).

Respectfully submitted,

JAMES F. GOSSETT

Association Counsel

International Association

of Assessing Officers

1313 E. 60th Street

Chicago, Illinois 60637-9990

(312) 947-2053

Attorney for Amicus Curiae, IAAO

(THIS PAGE INTENTIONALLY LEFT BLANK)