Court Upholds Ban on DC Commuter Tax

By on November 7, 2005 in Current Events with 0 Comments

The U.S. Court of Appeals for the D.C. Circuit has weighed in the long-running effort of the District of Columbia to impose a commuter tax on residents of Maryland and Virginia who work in the District.

Congress is empowered by the United States Constitution with exclusive legislative authority over all matters relating to the District of Columbia. In its exercise of this power, Congress imposed a restriction on the government of the District preventing them from imposing such a commuter tax.

In the just-decided Banner v. United States of America, No. 04-5190, November 4, 2005, the appeals court sided with a lower court decision that upheld the authority of Congress to impose such a restriction on the D.C. Government. (See the lower court decision at Banner v. United States of America, U.S.D.C.D.C., No. 03cv01587, )

Plaintiffs in this case include several residents of the District, its Mayor, the D.C. Council and its members, and the District of Columbia. The plaintiffs’ position is supported in a “friend of the court” brief filed by the D.C. Affairs Section of the District of Columbia Bar. Arrayed against the plaintiffs are the Department of Justice as well as the states of Maryland and Virginia. In a nutshell, plaintiffs asked the court to declare the restriction imposed by Congress on the D.C. government to be unconstitutional. If successful, this would clear the way for a commuter tax to be imposed. Both the district court and now the appeals court rejected the arguments and dismissed the complaint.

There’s a lot of money at stake in this dispute. Plaintiffs estimate that the total salary earned in the District by Maryland and Virginia commuters amounts to some $30 billion a year. At current D.C. tax rates, this could bring into D.C. coffers some $1.4 billion in tax revenues. Therefore, expect that there will be another round in this case in the form of a petition for review by the United States Supreme Court.

That raises an interesting side note in the case. When it was briefed and argued before the United States Court of Appeals for the D.C. Circuit, John Roberts was a member of that court. He is now Chief Justice of the Supreme Court and serves as Circuit Justice over the D.C. Circuit. In this capacity he participated in the per curiam decision handed down by the court.

© 2016 Susan McGuire Smith. All rights reserved. This article may not be reproduced without express written consent from Susan McGuire Smith.

About the Author

Susan McGuire Smith spent most of her federal legal career with NASA, serving as Chief Counsel at Marshall Space Flight Center for 14 years. Her expertise is in government contracts, ethics, and personnel law.