The Iowa Supreme Court has ruled in a case involving interest on unpaid taxes. Prosecutors reached a plea agreement with Marc Hagen, a dentist from Waverly, and he pled guilty failing to pay his state taxes from 2006 through 2009.

Hagen however balked when the Iowa Department of Revenue filed a claim seeking around $10,000 in penalties and interest along with $10,000 in back taxes. Hagen claimed the state was not a “victim” for purposes of restitution. The Bremer County District Court ruled in his favor.

The Iowa Supreme Court ruled the order to pay interest is not punitive, “but rather it reflects the lost value of the use of the money awarded.” The Supreme Court sent the case back to district court to figure the amount of penalties and interest owed by Hagen.

See the full ruling here: Tax interest ruling PDF