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Nordlinger v. Hahn

Supreme Court of the United States · 1992 · Constitutional Law

Constitutional LawEqual ProtectionState TaxationProperty Tax AssessmentEqual Protection ClauseFourteenth Amendmentrational basisproperty tax

Facts

California's Proposition 13 amended the state constitution to cap real property taxes at 1% of full cash value and to limit annual assessment increases to no more than 2%, while reassessing property to current appraised value upon new construction or a change in ownership. This acquisition-value system caused long-term owners of similar properties to pay much lower taxes than newer owners. Nordlinger bought a Los Angeles home in 1988 for about $170,000, after which it was reassessed upward because of the change in ownership and her tax bill increased substantially. She alleged that she paid about five times more in property taxes than some neighbors with comparable homes who had owned since 1975.

Issue

Whether California's Article XIIIA, which assesses newly purchased property at current value while allowing long-held comparable property to retain lower, historically based assessments, violates the Equal Protection Clause of the Fourteenth Amendment. Also, whether heightened scrutiny applied based on an asserted right-to-travel theory.

Rule

Unless a classification jeopardizes a fundamental right or uses a suspect classification, the Equal Protection Clause requires only that the classification rationally further a legitimate state interest. In the tax context, this review is especially deferential, and a state may use an acquisition-value property tax system if there is a plausible policy reason supporting the distinction and the distinction is not arbitrary or irrational.

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One of 10 multiple-choice questions for this case. Pick an answer to see why.

Oregon adopts a statewide property-tax system under which real property is initially assessed at its purchase price, annual assessment increases are capped at 2%, and reassessment to current appraised value occurs only upon sale or new construction. After buying a bungalow in Portland, Elena Ruiz learns she pays far more in property taxes than neighbors with nearly identical homes who bought years earlier.

If Elena brings an Equal Protection challenge to the statewide scheme, what is the most likely standard of review?

Explanation. The majority held that, absent a suspect classification or infringement of a fundamental right, equal protection requires only that the classification rationally further a legitimate state interest. In taxation, that review is especially deferential, with states enjoying broad latitude in drawing lines. A distinction between newer and older property owners does not itself trigger heightened scrutiny.