IMT, Inc. v. City of Lumberton

The parties in this case were the City of Lumberton and four companies that ran promotional sweepstakes as part of their business plans. In 2010, the City amended its existing privilege license tax on businesses that utilized electronic machines to conduct sweepstakes. The prior tax for these companies was $12.50 per year. The new law made the minimum tax owed by these businesses $7,500. This change imposed a 59,900% minimum increase per business location. The trial court granted summary judgment in favor of the City, finding the new tax to be constitutional. Addressing the Just and Equitable Tax Clause of the North Carolina Constitution, the court of appeals affirmed, determining that the tax did not amount to a prohibition of the companies' businesses. The Supreme Court reversed, holding that the City's privilege license tax violated the Just and Equitable Tax Clause as a matter of law, as the present tax transgressed the boundaries of permissible taxation. View "IMT, Inc. v. City of Lumberton" on Justia Law