Columbus, OH – On Friday, The Buckeye Institute filed its amicus brief in Arizona v. Yellen calling on the United States District Court for the District of Arizona to stop enforcement of the federal tax mandate, which was included in the American Rescue Plan Act (ARPA).

“When Congress adopted the American Rescue Plan Act, it imposed a vague and open-ended requirement that functionally required states to relinquish their rights to determine their own tax policy,” said Robert Alt, president and chief executive officer of The Buckeye Institute. “Without clear and unambiguous language of what the states are permitted and what they are forbidden, the Biden administration’s sweeping disregard for the principle of federalism must be overturned.”

As it did in Ohio v. Yellen, The Buckeye Institute agreed that Congress lacks the authority to usurp state taxing authority, but Buckeye also noted that the court does not have to rule on that question given the vagueness of the text in the ARPA. “Whatever the extent of Congress’s power in this area in the abstract, this enactment falls far short of the clarity required for Congress to intrude on States’ traditional sovereign authorities.”

Buckeye’s brief goes on to highlight the serious questions the federal tax mandate raises about Arizona’s recently-enacted Senate Bill 1752. That law cut state taxes on unemployment benefits and PPP emergency loan forgiveness to conform Arizona’s tax code to the federal tax code in a commonsense act that nonetheless could be construed as a violation of the ARPA mandate. “The fact that a state can’t even harmonize its tax policies with the federal system without running afoul of the tax mandate demonstrates the absurdity of ARPA,” said Robert Alt.

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UPDATE: On July 22, 2021, the United States District Court for the District of Arizona concluded that Arizona failed to demonstrate a concrete injury and, therefore, lacked standing.

UPDATE: On May 19, 2022, the United States Court of Appeals for the Ninth Circuit reversed the District Court’s dismissal of the case and remanded the case back to the District Court to be heard on the merits.

UPDATE: On October 24, 2022, The Buckeye Institute refiled its amicus brief with the United States District Court for the District of Arizona, calling on the court to stop enforcement of the federal tax mandate, which was included in the American Rescue Plan Act.