Taxes are perpetually a source of debate in this country, from federal taxes right down to the water and sewer taxes charged by local municipalities. Legal disputes often arise when certain taxpayers feel they are paying more than their fair share. In Armour v. Indianapolis, a group of Indiana taxpayers took their tax fight all the way to the U.S. Supreme Court when a switch in tax policy benefited some more than others.

The Facts of the Case 

Indiana’s Barrett Law allows municipalities to fund public improvements through special assessments apportioned equally among abutting properties. Under this law, the City of Indianapolis funded the Brisbane/Manning Sanitary Sewers Project. The City levied a $9,278 special assessment that could either be paid in a lump sum or in monthly installments.

One year after levying the special assessment, Indianapolis adopted the Septic Tank Elimination Program (STEP), which financed projects in part through bonds. After switching to the new financing method, the city forgave the debts owed by the property owners who paid in installments. However, the City did not refund any portion of amounts already paid.

A group of taxpayers who paid in full argued that by forgiving the outstanding debt of some taxpayers without issuing refunds to those who made a single full payment, the City of Indianapolis had violated the Equal Protection Clause.