Under the so-called JOBZ program, approved by the legislature in 2003, businesses that move into designated tax-free zones, or expand in them, pay almost no taxes. That includes paying no sales taxes, no taxes on property improvement or on equipment purchases, or income taxes.

Through January, the state lists the total number of JOBZ deals at 125, representing about 2,900 retained jobs, 1,932 new ones and $165.8 million in capital investment. Many of those deals have been approved with little local controversy.

The lawsuit claims JOBZ and the similar bioscience program violate the state's constitution by surrendering the legislative power of taxation to state and local economic development officials. The lawsuit also claims the programs violate the federal constitution's interstate commerce clause by using tax exemptions to induce businesses to expand in Minnesota rather than in some other state. The lawsuits argues that tax incentive programs are unfair to state taxpayers who have to pay more to make up for tax giveaways that benefit a select few.