Q&A – Are Property Taxes Unconstitutional?
Each day I feature a listener question sent by one of these methods.
Email: brianmudd@iheartmedia.com
Social: @brianmuddradio
iHeartRadio: Use the Talkback feature – the microphone button on our station page in the iHeart app.
Today’s entry: @brianmuddradio Property taxes should be illegal!!! Keeping preaching! Has SCOTUS ever ruled on property taxes?
Bottom Line: This is an excellent question amid Governor DeSantis’s effort to put an end to property taxes, on at least homestead property, in Florida next year. The answer is that the Supreme Court has taken up numerous cases over time that have challenged aspects of property taxation, with the most recent case being in 2023 - in a ruling that reigned in property tax abuse by a local government. I’ll come back to that case in a moment. However, and perhaps notably, the U.S. Supreme Court has not taken up a direct challenge to the constitutionality of property taxation itself as a general practice (at least that I could find and I pulled all SCOTUS cases involving property taxes).
The earliest Supreme Court ruling that I could find that had implications for property taxes was the 1830 Providence Bank v. Billings case. Without getting into the weeds with this nearly 200-year-old case, the Supreme Court upheld the right of states to broadly impose taxation under the 10th Amendment provided the taxation doesn’t violate federal clauses.
Since the 1830 ruling, the Supreme Court has taken up a smattering of cases that have involved procedural challenges to aspects of property taxation, but seemingly with the premise that property taxes are a legitimate exercise of state taxing power, provided they comply with constitutional protections like the Fifth Amendment’s Takings Clause or the Fourteenth Amendment’s Due Process and Equal Protection Clauses... or basically that everyone within a jurisdiction is treated equally under the law for a like property type.
Now I mentioned that the most recent related ruling took place in 2023... In the case Tyler v. Hennepin County, Minnesota – the Supreme Court issued a unanimous 9-0 decision in limiting a government’s ability to seize and sell a property to satisfy tax debt. In the case in question, the county foreclosed on a property, sold it, and realized a $25,000 surplus in excess of outstanding obligations.
The owner sued under the Fifth Amendment’s “Taking’s Clause”, which states property may not be taken by a government without just compensation. This is the clause that comes up anytime governments seize property under the guise of imminent domain. The court found in favor of the owner with a broad ruling establishing precedent that more property, or value from seized property, may not be seized by governments than is owed.
So, what we’ve seen most historically is a Supreme Court that’s permitted property taxation as a “states right” issue, with a current Supreme Court that’s taken a strong stance to limit potential abuses by local governments through property taxation.
With that said I’d argue property taxes are fundamentally un-American. After all, do you every really own your property if the government can take it away from you for not paying taxes annually to retain it? And for that reason, I believe they’re also fundamentally unconstitutional.
Property rights are protected under both the Fifth and Fourteenth Amendments. The fifth states: No person shall be ... deprived of life, liberty or property without due process of law; nor shall private property be taken for public use, without just compensation. The 14th states: No State shall make or enforce any law which shall abridge the privileges or immunities of citizens of the United States; nor shall any State deprive any person of life, liberty, or property, without due process of law; nor deny to any person within its jurisdiction the equal protection of the laws.
Well, if property taxes are imposed that cannot be afforded by the owner of the property, is that not depriving a person of that property without due process?
Property taxes predate our country as the first records of imposed property taxes date back to 1634 when taxes were imposed on settlers for land and livestock in the Massachusetts Bay Colony. It’s one of the taxes that should have been ended with the American Revolution. If nothing else, hopefully in Florida we’ll have the opportunity to end them on homesteaded properties next year.