# Amicus Brief — Limbach v. Hooven & Allison Co.

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URL: https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40385011_0099%3A7

## Record

- **Collection:** Supreme Court brief
- **Document type:** Amicus Brief
- **Published:** January 1, 1984
- **Citation:** 466 U.S. 353

## Text

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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

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Source: Frix Law Library, https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40385011_0099%3A7. Public record. Not legal advice.