KLAFTER LESSER LLP ANNOUNCES THAT THE DISTRICT OF COLUMBIA LAW BY WHICH IT HAS REQUIRED NON-RESIDENT (BUT NOT RESIDENT) SEMIPUBLIC INSTITUTIONS TO PAY SALES AND HOTEL TAXES HAS BEEN HELD TO VIOLATE THE U.S. CONSTITUTION
RYE BROOK, N.Y., April 4, 2024 /PRNewswire/ -- On February 13, 2024, the Superior Court of the District of Columbia (Tax Division) ruled that the provision of District law that gave "semipublic institutions" ? principally, nonprofit scientific, educational and charitable organizations ? that have offices in the District a hotel and sales tax exemption but did not give non-DC semipublic institutions such an exemption, violates the U.S. Constitution's Commerce Clause. That Clause prohibits a state, including the District, from discriminating against out-of-state entities when they participate in its economy. Thus, the District, in favoring its own resident organizations, was found to have discriminated un-Constitutionally against such entities from other states. Not a single other state imposes a residency requirement on semipublic institutions in order to obtain a tax exemption when engaging in commerce in it.
Despite this ruling, the District continues to unlawfully refuse to provide non-resident semipublic institutions with a tax exemption when engaging in commerce in the District. It therefore continues to unlawfully collect sales and hotel taxes from out-of-District not-for-profit entities. The District has also refused to agree to refund the unlawful taxes it has already collected. According to Jeffrey Klafter, the principal lawyer prosecuting this case, "It is most telling for the District, which has long aspired to full statehood, to have violated the very provision of the Constitution which requires it to treat the residents of the 50 States equally in trade and commerce, to have been found to have discriminated unconstitutionally against semipublic institutions from those other states."
The ruling was issued in a class action lawsuit known as American Philosophical Association et al. v. District of Columbia, Civil Case No. 2019 CVT 000003, which was commenced in 2017 by two non-resident semipublic institutions, the American Philosophical Association and American Anthropological Association.
The case will now proceed to determining the damages the District must pay due its long-term and continuing violation of the U.S. Constitution, which will be assessed by the claims submitted by class members. Plaintiffs will be asking the Court to approve the mailing of claim forms to potential class members. All non-resident semipublic institutions that held meetings in the District since December 12, 2016, and that paid sales and/or hotel taxes in connection with such meetings should submit a claim for a refund of the taxes they paid. The notice that will accompany the claim form will explain how to make a claim.
More information concerning this lawsuit is available at www.klafterlesser.com/news. You can also contact us from that website or you can call us at 914/934-9200 x 307.
Klafter Lesser LLP has extensive experience in prosecuting class actions and the founding partners of the firm, who have extensive class action experience, have recovered over $1 billion for the benefit of classes in numerous cases. Please visit our website for more information about the Firm.
Contact:
Jeffrey Klafter
KLAFTER LESSER LLP
2 International Drive, Suite 350
Rye Brook, NY 10573
(914) 934-9200
SOURCE Klafter Lesser LLP
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