Discounts on deductions and state courts on out-of-state businesses

Petitions of the week

This week, we highlight cert petitions that ask the Supreme Court to consider, among other things, whether a 2017 law’s cap of $10,000 for the deduction of state and local taxes on federal income tax returns violates the Constitution in constraining state tax policies, and whether state courts may exercise jurisdiction over companies located out of state based on their registration as foreign companies.

The 2017 cap on the federal tax deduction for state and local taxes

New York vs Yellen deals with the constitutional division of the power to tax between the federal government and the state governments. In 2017, Congress passed a tax law that allowed taxpayers to deduct from federal income tax up to $10,000 of state and local taxes. Previously, taxpayers could deduct all or nearly all state and local taxes — and in 2015, the average deduction for state and local taxes claimed by the 3.3 million New Yorkers who itemized their deductions on their federal tax returns was $21,943. Then-President Donald Trump described the 2017 law as an “incentive” for taxpayers “to say, hey, make sure your politicians are doing a good job running your state.” New York, Connecticut, Maryland and New Jersey filed suit, arguing that the new law violates the Constitution — specifically Article I, Section 8 and the 10th and 16th Amendments — because it interferes with the sovereign fiscal authority of States by unduly constraining them. changing their sovereign fiscal policies and denying them equal sovereignty.

The U.S. District Court for the Southern District of New York dismissed the states’ claims, ruling that the negative economic effects of the $10,000 cap were not so severe as to impermissibly compel states to change their policies. The district court also ruled that a fixed dollar cap on the deduction was not illegal. The United States Court of Appeals for the 2nd Circuit upheld, finding that Congress even had the constitutional power to eliminate the deduction. In their petition, the states argue that the 2017 law departs from 150 years of history and introduces a new question about federal taxing power.

General Jurisdiction of State Courts Over Out-of-State Businesses

In Cooper Tire & Rubber Company v. McCall, a tire manufacturer is objecting to the exercise of jurisdiction by Georgian courts based on its compliance with Georgia’s foreign company registration law. Tyrance McCall, a Florida resident, sued Cooper Tire & Rubber Company, a Delaware company headquartered in Ohio, after a 2016 accident in Florida that resulted from the alleged failure of a tire made by Cooper in Arkansas. Cooper’s activities in Georgia were unrelated to McCall’s claims against Cooper, meaning the Georgian courts had no “specific jurisdiction” over Cooper (the issue of jurisdiction in the last term Ford Motor Company v. Montana Eighth Judicial District Court). Instead, the Georgia Supreme Court upheld “general jurisdiction” over Cooper on the grounds that Cooper, by registering as a foreign corporation in Georgia, had consented to sue in Georgia as a condition of doing business. in the state. Although the Supreme Court of Georgia recognized recent Supreme Court case law that a corporation consents to general jurisdiction in the states where it is incorporated (here, Delaware) and has its head office (here, Ohio), the court ruled that the Supreme Court did not formally overturn previous case law supporting the theory that registration supports general jurisdiction.

These and others petitions of the week are below:

Thacker v. United States
Publish: If a district court can consider the 2018 amendment to the penalties prescribed by 18 USC § 924(c) to determine whether an accused has demonstrated “extraordinary and compelling reasons” for a reduced sentence under 18 USC § 3582(c)(1)(A)(i).

Gore vs. Oklahoma
Publish: Whether McGirt v. Oklahoma applies retroactively to convictions which were final when McGirt has been decided.

Martin v. Johnson
Publish: Did the United States Court of Appeals for the 10th Circuit violate the retrospective nature of Section 2254(d) of the Antiterrorism and Effective Death Penalty Act of 1996 and the clear mandates announced by the Supreme Court in Sexton v. Beaudreaux, Cullen vs Pinholster, and Harrington v. Richter when he considered — and based his final decision on — an argument that the respondent, Alonzo Cortez Johnson, never made to the Oklahoma Court of Criminal Appeals on a direct appeal.

Cooper Tire & Rubber Company v. McCall
Publish: If the Due Process Clause of the 14th Amendment allows a state to assert personal jurisdiction over an out-of-state corporation, for claims not arising out of or related to contact between the corporation and the forum state , on the ground that the company registering to do business in the state is deemed to consent to the general jurisdiction of that state.

Stirling v Stokes
Problems: (1) Did the United States Court of Appeals for the 4th Circuit violate the fundamental principles of Strickland vs Washington when he failed to reassess all of the evidence in his harm analysis in Sammie Stokes’ habeas action to determine whether there was a reasonable likelihood of a different outcome; (2) whether the 4th Circuit erred in granting relief on a trial attorney’s ineffective request for assistance when the trial attorney had reasonable strategic reasons not to pursue a defense of mitigation of “bad education” and that collateral counsel had reasonable strategic reasons not to pursue a request for ineffective assistance from trial counsel; and (3) alternatively, whether such matter should be held pending the outcome of Shinn vs. Ramirez, pleaded on December 8, 2021.

New York vs Yellen
Publish: Whether Congress’ imposition of a $10,000 cap on the deduction of state and local property and income taxes from federal taxable income violates Article I, Section 8 and the 10th and 16th Amendments of the Constitution of the United States.


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