At the Appellate Level, NFIB Amicus Brief Argues Against Tax Mandate in American Rescue Plan

Date: October 20, 2021

NFIB filed an amicus brief in the case Ohio v. Yellen at the United States Court of Appeals for the Sixth Circuit, supporting Ohio in its challenge to the provision of the American Rescue Plan Act of 2021 (ARPA). The challenged provision prevents states from using ARPA funds for tax relief, either directly or indirectly. NFIB’s brief argues the court of appeals should affirm the Ohio district court, which correctly determined that the tax mandate was unconstitutional. 

“Small businesses are still working to recover from the effects of the global pandemic that arose from government-mandated orders and shutdowns,” said Karen Harned, Executive Director of NFIB’s Small Business Legal Center. “ARPA’s Tax Mandate prevents states from implementing measures that will foster a healthy business community and promote recovery from COVID-19’s economic devastation, which disproportionately harmed certain industries and carried particularly harsh effects for small businesses.”

ARPA made funds available to states on the condition that they give up their sovereign tax power—that is, they agreed to not pass any laws or take any administrative actions that decrease their net revenue, preventing them from providing tax relief for small businesses. NFIB believes the Sixth Circuit should affirm the Ohio district court’s permanent injunction against enforcement of this unprecedented and clearly unconstitutional government overreach.

“Ohio’s economy is recovering from a pandemic that seemingly touched every fabric of society. As the heart of their local communities, small business owners are seeing a light at the end of the tunnel. But many still need the assistance that ARPA restricts. By affirming the district court, the court of appeals would be paving the way for Ohio to provide much-needed relief,” said Roger Geiger, executive director for NFIB in Ohio.

NFIB filed the brief with the U.S. Chamber of Commerce. Additionally, there are 21 state Attorneys General who have expressed concern over the unconstitutionality of this provision.

The NFIB Small Business Legal Center protects the rights of small business owners in the nation’s courts. NFIB is currently active in more than 40 cases in federal and state courts across the country and in the U.S. Supreme Court.

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