Document Type

St. John's Law Review Commentary


The Tax Injunction Act forbids federal courts from interfering with the “assessment, levy, or collection” of a state tax as long as a “plain, speedy, and efficient remedy” is available in state court. Effectively, this prevents federal courts from hearing challenges to state taxes based on constitutional grounds. Prior to and after the enactment of the Tax Injunction Act, federal courts used the principle of comity to decline jurisdiction over lawsuits that challenged state taxes, even if the Tax Injunction Act itself would not forbid such a lawsuit. In a 2004 decision, Hibbs v. Winn, the Supreme Court narrowed the scope of the Tax Injunction Act, holding that the Act applied only to claims which would disrupt the flow of state tax revenue. Afterwards, a circuit split arose regarding the scope of the Hibbs decision. Some courts believed that the decision restricted the both Tax Injunction Act and the comity doctrine; the Fourth Circuit held that only the Tax Injunction Act was affected. The Supreme Court resolved the split in a 2010 decision, Commerce Energy, Inc. v. Levin. There, the Court held that Hibbs only applied to lawsuits challenging a state tax benefit enjoyed by a third party, and therefore comity precluded federal courts from hearing the lawsuit. The Court declined to address whether the Tax Injunction Act applied to Commerce Energy. Given the history of the comity doctrine, the Court incorrectly applied the doctrine in Hibbs, and in Commerce Energy did not go far enough in limiting the holding of Hibbs. The Court also incorrectly applied Sinochem International Co. v. Malaysia International Shipping Corp. when it declined to address whether the Tax Injunction Act applied to Commerce Energy. The Court should have considered if Tax Injunction Act applied and dismissed on those grounds if appropriate.



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