State appealing gambling tax decision

Wednesday, April 7, 2004 | 9:06 a.m.

DES MOINES, Iowa -- The state again will appeal an Iowa Supreme Court ruling that Iowa's two-tiered tax system for racetracks and riverboat casinos was unconstitutional, the attorney general's office said Tuesday.

The appeal was filed Tuesday with the U.S. Supreme Court, which ruled last summer that the different tax rates paid by riverboat casinos and racetrack casinos was not a violation of the equal protection clause of the U.S. Constitution.

The case was sent back for reconsideration to the Iowa Supreme Court, which stuck to its earlier decision that the two-tiered tax was unconstitutional. It left the state owing the racetracks as much as $165 million in overpaid taxes.

"The latest Iowa Supreme Court decision ... is indeed inconsistent with the U.S. decision," Iowa Attorney General Tom Miller said in a statement.

The Iowa court applied the Iowa Constitution to the case but used the federal equal protection standard and analysis, rejecting the U.S. Supreme Court's reasoning as "illogical," "insufficient" and lacking support either "in the record" or "common knowledge."

"The Iowa Supreme Court applied the same federal principles set forth in the U.S. Supreme Court opinion, but it simply disagreed with the U.S. Supreme Court conclusions," Miller said.

"That violates the mandate issued by the nation's top court in remanding the case to the Iowa Court."