Hibbs v. Winn

PETITIONER: J. Elliott Hibbs, Director, Arizona Department of Revenue
RESPONDENT: Kathleen M. Winn, et al.
LOCATION: Guantanamo Bay, Cuba

DOCKET NO.: 02-1809
DECIDED BY: Rehnquist Court (1986-2005)
LOWER COURT: United States Court of Appeals for the Ninth Circuit

CITATION: 542 US 88 (2004)
GRANTED: Sep 30, 2003
ARGUED: Jan 20, 2004
DECIDED: Jun 14, 2004

Deputy Solicitor General Hungar - argued the cause for the United States as amicus curiae urging reversal
Marvin S. Cohen - argued the cause for Respondents
Samuel Goddard - argued the cause for Petitioner
Terry Goddard - for petitioner
Thomas G. Hungar - argued the cause for Petitioner, on behalf of the United States, as amicus curiae

Facts of the case

Several Arizona residents challenged in federal district court an Arizona statute that allows tax credits for money spent toward parochial schools. They alleged that the statute violates the religious establishment clause of the U.S. Constitution's First Amendment.

The district court dismissed the case and ruled that it lacked jurisdiction for two reasons: First, the federal Tax Injunction Act (TIA) prohibits federal district courts from ruling on the "assessment, levy or collection of any tax under state law where a plain, speedy and efficient remedy may be had in the courts of such state." And second, the court pointed to the comity doctrine - that is, the deference that federal courts should generally give to state tax laws. The Ninth Circuit Court of Appeals reversed, ruling that neither the TIA nor comity place the case outside federal jurisdiction. The court reasoned that the TIA was inapplicable because invalidating a tax credit would not harm Arizona's ability to raise revenue.


Do the federal Tax Injunction Act and comity principles require federal district courts to dismiss (for lack of jurisdiction) constitutional challenges to state tax credits that directly affect a state's tax system?

Media for Hibbs v. Winn

Audio Transcription for Oral Argument - January 20, 2004 in Hibbs v. Winn

Audio Transcription for Opinion Announcement - June 14, 2004 in Hibbs v. Winn

Ruth Bader Ginsburg:

The opinion of the Court in two cases will be announced by Justice Ginsburg.

The first case is Hibbs versus Winn.

Respondents here plaintiff below, are Arizona tax payers who filed suit in Federal Court against the Director of Arizona’s Department of Revenue.

The suit sought to enjoin the operation of a provision of Arizona’s income tax law on First Amendment Establishment Clause grounds.

Arizona’s law authorizes an income tax credit for payment to non-profit school tuition organizations.

Those organizations, called STOs, awards scholarships to students attending private elementary or secondary schools.

Arizona’s statute allows STOs to designate schools that provide religious instruction or maintain religion-based admissions preferences.

The question presented for our review, does a Federal District Court have authority to adjudicate respondent’s constitutional challenge?

To be more specific a federal law, the Tax Injunction Act of TIA, prohibits a Federal District Court from restraining the assessment, levy, or collection of any tax under state law.

Does that Act bar this suit?

Arizona’s Revenue Director thinks it does.

He moved to dismiss the case urging that a federal injunction would restrain the assessment of taxes under state law.

The District Court agreed and granted the motion.

The Court of Appeals for the Ninth Circuit reversed holding that the TIA does not bar the federal proceeding.

Affirming the judgment of the Ninth Circuit, we now hold that respondent’s suit is not the kind TIA proscribes.

In decisions spanning a near half century including civil rights challenges, the state action aimed at circumventing ground of the Board of Education, courts in the federal system including this court, as a reviewer of lower court’s decisions have entertained challenges to tax credits authorized by state law without viewing the TIA as a jurisdictional barrier.

On this first occasion squarely to confront the issue, we confirm the authority Federal Court exercised in those cases.

The Director argues in effect that we and other Federal Courts were wrong to adjudicate those challenges.

He contends that the TIA trumps 42 U.S.C. Section 1983 which authorizes civil actions for deprivation of federal rights under color of state law.

The TIA, the Director maintains, bars all lower court interference with state tax systems even when the plaintiff is not trying to avoid paying the tax imposed on him and no matter that the state revenue would increase should the plaintiff prevail.

The alleged jurisdictional bar which the Director asserts has existed since the TIA’s enactment in 1937, was not even imagined by juror’s in pathmarking civil rights cases just mentioned, or by the defendants in those cases who had every interest in defeating Federal Court adjuticatorial authority.

Our prior decisions command no respect, the Director maintains, because they are mere silent holdings.

We reject that assessment.

This suit implicates neither the TIA’s conception of the tax assessment nor any of the Act’s underlying purposes.

Taking account of the prospective nature of the relief requested, does respondent’s suit in the TIA’s words seek to enjoin, suspend, or restrain the assessment, levy, or collection of any tax under state law?

The answer turns on the meaning of the term assessment as employed in the TIA.

For Internal Revenue Code purposes an assessment involves a recording of the amount the tax payer owes the government, rather than reading the word assessment in isolation, we follow the cardinal rule that statutory language must be read in context.

In the TIA and tax law generally, an assessment is closely tied to the collection of a tax.

The assessment is the official recording of liability that triggers levy and collection efforts.

A court should also interpret the statute to effectuate all its provisions, if as the Director asserts, the term assessment by itself signify the entire plan of taxation the TIA would not need the words levy or collection.