Sioux City Bridge Co. v. Dakota County

Background

A private bridge company that owns part of a bridge across the Missouri River in Nebraska disputed local tax assessments. For years the Nebraska portion was listed at $600,000. In 1918 the county assessor listed the same amount, but when the company appealed, the county Board of Equalization raised the assessment by $100,000. The company then sued in state court claiming the higher assessment was excessive and that other property in the county had been intentionally assessed at much lower percentages of true value.

Reasoning

The Supreme Court asked whether taxing officials had denied the company equal protection and due process by taxing the bridge at full value while other property was taxed at a substantially lower percentage. The Nebraska courts accepted a rule that the proper remedy was to raise the under-assessed property rather than reduce the properly assessed property. The U.S. Supreme Court rejected that approach where intentional systematic undervaluation exists. It held that when it is impossible to have both correct valuation and equal treatment, uniformity must prevail, and a taxpayer unfairly singled out for full assessment may have its assessment reduced to match the lower effective rate.

Real world impact

The Court reversed the Nebraska decision and sent the case back for further proceedings to determine whether intentional discrimination in assessments occurred. Practically, this means a taxpayer who can show others were intentionally undervalued may get its tax bill reduced to the same effective rate, rather than being forced to bar such relief because other property was under-taxed.