CHARLESTON — West Virginia Attorney General Patrick Morrisey has announced a West Virginia-led coalition had secured a key victory in the U.S. Court of Appeals for the 11th Circuit in Atlanta.
The January 20 decision, which West Virginia argued in September, stemmed from the Biden administration’s appeal of a November 2021 victory that had protected the well-established authority of states to lower taxes for their citizens.
In April 2022, Morrisey led a 13-state bipartisan coalition in suing the Biden administration to stop the “tax mandate” buried in the American Rescue Plan Act of 2021. The coalition argued federal treasury officials cannot force states to relinquish control of their taxing authority in return for much-needed economic aid related to COVID-19.
The AGs said that by broadly preventing all 50 states from exercising their tax powers effectively, the stimulus bill provision amounted to one of the most egregious power grabs by the federal government in the nation’s history.
“This decision will provide significant additional flexibility to the State Legislature as it debates how best to cut taxes,” Morrisey said. “There should be no excuses about whether to cut taxes anymore — my office is providing the legal tools to the legislature and governor to be very aggressive in providing tax relief to our people.”
The district court in November held the tax mandate violates the U.S. Constitution’s Spending Clause. The court said Congress must be clear if it intends to impose a condition on the granting of federal monies — that is, it must do so unambiguously. The U.S. Department of the Treasury and the Secretary of the Treasury appealed that decision in January of last year.
“I’m pleased the Eleventh Circuit saw the case the way we did: it’s about states’ sovereignty,” Morrisey said. “Our lawsuit was designed to protect West Virginia from federal overreach. We have fought back against that overreach with the November 2021 win in district court, but the Biden administration kept on insisting their interpretation of the law is correct.
“It was not, and the court agreed.”
Morrisey's office said the ruling could have a big impact on current tax issues being debated at the West Virginia Legislature.
“The Constitution does not give the federal government authority to require states to enact the laws or policies that Congress prefers," the appeals court wrote in the ruling. "Allowing Congress to run roughshod over the States’ sovereign rights would threaten dual sovereignty and would be a step toward ‘vest[ing] power in one central government.’”
Among other things, the coalition had argued that the tax mandate violates the Spending Clause because it is ambiguous, coercive in tying this condition to billions in funds to the states, unrelated to APRA’s purpose of repairing the pandemic’s economic damage, and independently unconstitutional.
West Virginia co-led the coalition with Alabama and Arkansas with support from Alaska, Florida, Iowa, Kansas, Montana, New Hampshire, Oklahoma, South Carolina, South Dakota and Utah.