Taxpayers Will Get 'Standing' To Sue If Bill Becomes Law | Eastern North Carolina Now

    Publisher's note: The author of this post is Barry Smith, who is an associate editor to the Carolina Journal, John Hood Publisher.

House Bill 457 will let citizens challenge taxes and local government actions

    RALEIGH     The state House today will consider a bill that would make it easier for North Carolina citizens to challenge tax laws in court.

    Dubbed the Taxpayer Standing Act, House Bill 457, sponsored by Rep. Hugh Blackwell, R-Burke, would give "standing" -- or the right to sue -- to individuals and corporations that pay taxes if there's a belief that a governmental body violated a constitutional or statutory provision.

    Blackwell said that the bill, if it becomes law, would allow a taxpayer to sue without having to show that he was singled out for special treatment by a tax or spending act.

    "Taxpayers who want to invest their time and their money and get an attorney to take the case ought to be able to have the case heard and not thrown out on they grounds that they're not uniquely affected by that," Blackwell said.

    A House Judiciary subcommittee has given the bill its blessing. This past week, H.B. 457 passed Appropriations Committee muster after a fiscal analysts estimated that the change could result in costs of about $300,000 per year to the judicial system.

    Blackwell earlier told the Judiciary subcommittee that the bill would help taxpayers get cases to court so that they could be decided on the "merits of the argument as to the constitutionality or the appropriateness of the actual law or statute in question."

    Under current law, courts have held that taxpayers don't have a right to sue in many cases. Nor does a taxpayer have standing to challenge sales and use tax exemptions based on the fact that the person pays North Carolina income and sales and use taxes.

    The bill would give an individual or corporation that pays taxes standing to sue the taxing jurisdiction for violating a constitutional or statutory provision, or for misusing or misappropriating public funds. Standing also would be given to those challenging what they believe is an unlawful tax exemption, deduction, or credit.

    At the committee, Rep. Deborah Ross, D-Wake, questioned why it was more important for a citizen to be able to get a judgment on a tax issue than a constitutional issue.

    "There are other rights that we have that have been held more dear," Ross said.

    Rep. Darren Jackson, D-Wake, also questioned the cost to the court system, particularly business court, for such a change.

    "Is our committee going to consider new judges basked on this statute?" he asked.

    Darren said he has no particular opposition to the concept of the bill, he's concerned about caseloads.

    "I'm just more concerned about overloading the judges that we've already got," Jackson said.

    Blackwell said that the bill has the potential of saving taxpayer money if lawsuits result in stopping unconstitutional spending or activity.

    "It might would offset the legal cost involved," Blackwell said.

    If H.B. 457 becomes law, Blackwell said that among the types of cases that could be headed to court would be those challenging corporate incentives or local governments acting in opposition to state law.