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Taxation: Tax Credits – Taxpayer Standing

Where taxpayers who live in a statutorily defined distressed community brought a constitutional challenge to the distressed areas land assemblage tax credit act, which gives tax credits to redevelopers, the trial court properly found that the taxpayers lacked standing to bring the challenge because the tax credits created by the act are not government expenditures, so they do not have a sufficient effect on the taxpayers to confer standing.

Unnecessary harm

Concurring opinion by Wolff, J.: “‘First, do no harm’ – a fundamental precept of medicine – needs to be applied to this judicial decision, which may cause unnecessary harm to Missouri’s law that freely grants standing to taxpayers to challenge governmental spending.

“In determining that the taxpayer plaintiffs did not show that the tax credits in this case are an expenditure of public funds – which they are – the principal opinion takes the liberty, unnecessarily in my view, of distorting Missouri’s case law on standing.

“Although the principal opinion and Judge Stith’s concurring opinion leave the door open to get the law right in some future case, there is no principled reason not to get the law right in this case, or – at the very least – to leave the law of standing undisturbed….

“I think it is both unnecessary and unwise to engage in a muddled discussion of standing when the use of tax credits in the redevelopment of north St. Louis can be justified as being for a ‘public purpose.’ Although I have doubts about the reliance on ‘public purpose’ to justify challenges under Article III, section 38(a) to the granting of public funds to a private entity, that is the current law and it suffices to justify the expenditures under the Distressed Land Assemblage Act that the taxpayers challenge in this case.”

Judgment is affirmed.

Manzara v. State of Missouri, et al. (MLW No. 62539/Case No. SC91025 – 46 pages) (Supreme Court of Missouri, Russell, J.; Breckenridge and Fischer, JJ., concur; Wolff, J., concurs in separate opinion filed; Teitelman, C.J., and Price, J., concur in opinion of Wolff, J.; Stith, J., concurs in principal opinion and concurs in part in opinion of Wolff, J., in separate opinion filed) Appealed from circuit court, Cole County, Joyce, J. (Irene J. Smith, St. Louis, for appellants) (James R. Layton and Maureen Beekley, Jefferson City, and Paul J. Puricelli and Robb E. Hellwig, St. Louis, for respondents).

Read the full text of this opinion. (PDF)