Cuno argued before U.S. Supreme Court.

• Author: Matson, Gregory S.

On March 1, 2006, the Supreme Court heard oral arguments in Cuno v. DaimlerChrysler, the case challenging Ohio's manufacturing investment tax credit, in which Tax Executives Institute filed a "friend of the court" brief. (TEI's brief was reprinted in the November-December 2005 issue of The Tax Executive. Gregory S. Matson, a member of TEI's legal staff, attended the oral argument and prepared the following report.

It is not usual for a tax case to be front page news in a national, general circulation newspaper. But there are several aspects of Cuno v. DaimlerChrysler that are far from usual (including the States' and multijurisdictional businesses' finding themselves on the same side). Hence, while unusual, it was not really a surprise that the tax case merited a cover story in the Money section of USA Today's March 1 edition--the morning the Supreme Court of the United States held oral argument in the case. For many, the newspaper's decision to publish a photograph of Charlotte Cuno--the named plaintiff in a case that has roiled the waters of state taxation by challenging the constitutionality of state tax incentives--put a face with the name that has become shorthand for the most important tax issue confronting the Supreme Court in recent years.

That the Cuno case was heard by the Supreme Court is itself unusual given the Court's seeming reluctance in recent years to accept state business tax cases. TEI was among many amici curiae that urged the Court to review the decision of the U.S. Court of Appeals for the Sixth Circuit striking down Ohio's investment tax credit as discriminatory in violation of the Commerce Clause. (TEI's brief in support of DaimlerChysler's petition appeared in the July-August 2005 issue of The Tax Executive.) The Court agreed to hear the case, and, in addition to the Commerce Clause issue, asked the parties to address the issue of "standing," which refers to the requirement that parties have a sufficient stake in the outcome (for example, sustained a sufficient injury) to justify their case being heard.

The March 1 oral argument focused primarily on the standing issue, an issue fully covered by TEI in its brief while other "friends of the court" eschewed the issue in the apparent hope that the Court might address the Commerce Clause issue if they ignored the standing prerequisite. In its brief, TEI pointed out the standing and Commerce Clause issues conflated in Cuno in that the taxpayer group challenging Ohio's...