Recently the Kansas Supreme Court handed-down a decision ruling that the City of Mission had imposed an illegal excise tax in violation of Kansas law. This marks the consummation of a contentious legal fight in the Kansas courts, in which NFIB Legal Center weighed in with multiple friend of the court briefs. In the end, the Supreme Court agreed with NFIB—which is, of course, good news for small business landowners in Kansas.
This all started when the City of Mission sought to impose a tax on all developed properties, imposing different rates for commercial, residential homes and apartment complexes. The tax was styled as a “fee” imposed to cover maintenance to local roads. But in actuality it was a “tax” because the money was not used to defray the property owner’s direct impact on public infrastructure, but instead to offset the City’s general costs in maintaining roads used by the entire community.
We discuss Heartland v. City of Mission in greater depth here. And as explained in that post, the issues raised in this case are somewhat common. Local and state governments often look for creative ways to bring in revenue without having to comply with the procedural requirements for enacting taxes. So hopefully this decision will serve as persuasive authority when similar issues are raised in other jurisdictions. But in any event, the decision in Heartland is important because—if the City had prevailed—you can rest assured that municipalities would have begun adopting similar schemes throughout the state. And that would have meant greater financial burdens for already struggling small businesses.
