Donaldson/guin obtains groundbreaking consitutional rulings in MUNICIPAL BOND tax cases

As reported in The Wall Street Journal on September 6, 2006 ("Kentucky Suffers Setback in Muni-Bond Tax Case"), Donaldson & Guin, LLC "recently won a courtroom battle in a case that is stirring widespread interest among municipal-bond investors and state government officials." Donaldson/GUIN brought several cases, including Davis v. Dept. of Rev. of State of Kentucky and Dunn v. State of North Carolina, asserting that Kentucky and North Carolina violate the Commerce Clause of the United States Constitution by charging state income tax on interest earned on municipal bonds issued in other states, while exempting from state income tax the interest earned on their own state's bonds. 
 
The Kentucky Court of Appeals overturned the trial court's decision in favor of the state and the Kentucky Supreme Court refused to review the well-reasoned opinion by the Kentucky Court of Appeals.  The State of Kentucky has petitioned the U.S. Supreme Court for a writ of certiorari. On January 16, 2007, we filed our response in opposition to Kentucky's petition. On that same day, the National Association of State Treasurers filed an amicus curiae brief supporting Kentucky's request for Supreme Court review, but declining to state a position on the merits of our constitutional arguments. The Supreme Court has set the petition for a cert. conference on February 16, 2007, and a decision by the Court whether to grant or deny review is anticipated on Tuesday, February 20, 2007. 
 
In North Carolina, the trial court certified a class of taxpayers and the State appealed to the North Carolina Court of Appeals.  On October 17, 2006, the N.C. appellate court rejected the State's arguments and affirmed the trial court's class certification decision.  For a copy of the decision, click here (pdf doc). North Carolina has petitioned the North Carolina Supreme Court to grant discretionary review of that affirmance of class certification.

David Guin and Tammy Stokes handled these cases for Donaldson & Guin, LLC. Our firm, which has extensive experience in municipal bond litigation, is prosecuting similar cases in a number of other states that permit classwide claims for tax refunds and will also pursue individual refunds for trusts and high-wealth individuals in states that do not permit class actions for tax refunds.  For more information, contact David Guin.