States warned against using "bait-and-switch" tactics in denying refunds of unconstitutionally collected taxes.

• Jurisdiction: United States
• Date: 01 June 1998
• Author: Todd, Glenn D.

The Supreme Court has once again held that a state may not deny properly filed refund claims of an unconstitutionally collected tax simply because the state provided adequate pre-deprivation remedies (i.e., remedies available before payment) (Newsweek, Inc. v. Florida Dep't of Revenue, 118 Sup. Ct. 904 (1998)). In 1990, the Florida Supreme Court declared a state sales tax statute that exempted sales of newspapers but not magazines unconstitutional (Dep't of Revenue v. Magazine Publishers of America, Inc., 565 So 2d 1304 (Fla. 1990)). After this ruling, Newsweek sought a refund of sales tax paid under the unconstitutional statute for tax years 1988 through 1990. Florida denied Newsweek's claim, asserting that the claim was barred because Newsweek did not avail itself of the pre-deprivation remedies available under state law.

In the past, the US. Supreme Court has interpreted the Due Process Clause to require "meaningful backward-looking relief" when a taxpayer is forced to pay a tax before having the opportunity to establish its...