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Cuno Ruling Supports Tax Incentives

WASHINGTON, DC-In a unanimous decision, the Supreme Court dismisses the challenge to Ohio's tax incentive regime. The court rules that the plaintiffs--a group of taxpayers and local businesses--had not established proper standing.

By Erika Morphy | Updated on May 16, 2006

(To read more on the debt and equity markets, click here.)

WASHINGTON, DC-The US Supreme Court ruled 9 to 0 that a group of Ohio taxpayers and local businesses could not challenge the tax credits and incentives state and city officials had granted to an auto manufacturer for expanding its manufacturing operations. The case, Cuno v. DaimlerChrysler, had been a source of concern to developers, companies and the municipalities that use such incentives to promote investment and development in their localities.

“Plaintiffs have not established their standing to challenge the state franchise tax credit. Because they have no standing to challenge that credit, the lower courts erred by considering their claims on the merits,” the decision read. The rules says that the principal claim that the franchise tax credit “depletes state funds to which they contribute through their taxes, and thus diminishes the total funds available for lawful uses and imposes disproportionate burdens on them, is insufficient to establish standing… .”

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