Legislators are warning of a deluge of lawsuits after the Iowa Supreme Court has ruled it’s unconstitutional to have a two-tiered rate for the state’s gambling enterprises. The state has taxed riverboats at a lower rate than race tracls, and Senate President Jeff lamberti, a republican from Ankeny who’s a lawyer, says other taxpayers will challenge other state taxing structures. Lamberti says the court will be inundated with tax cases, as other taxpayers ask the court to rule their tax rates unconstitutional. Senate Republican Leader Stewart Iverson of Dows expects commercial property owners to be among the first to sue, because their tax rate is higher than the rate for ag land. Iverson says there are different income tax and sales tax rates, and the decision “opens up that door” to have those challenged in court. Lamberti says the court ruled the way it did because it had been “shamed” when the U.S. Supreme Court voted nine-to-nothing last year, saying their previous decision was wrong. Lamberti says the Iowa Supreme Court put “saving face above making good law.” He says that’s a disservice to the people of Iowa. Governor Tom Vilsack comes to a different conclusion. He says the court narrowly ruled on gambling taxation. Vilsack says the court, in its ruling, did not create a separate framework for other taxing structures. Attorney General Tom Miller, though, says it’s too soon to say what the impact of the ruling may be on other lawsuits. Miller says “only time will tell” whether other file lawsuits challenging the entire state tax structure. Some suggest the state Supreme Court’s decision will ultimately lead to the unraveling of the entire state tax system as dozens of lawsuits are filed to protest tax rates under the “equal protection” argument. Miller says he “can’t rule that out.” Miller says the Iowa Supreme Court’s decision is “unusual” and what happens from here is anybody’s guess. Miller and his staff are reviewing the opinion to see if there’s a way to appeal, again to the U.S. Supreme Court to overturn it.
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