Territory of Alaska v. American Can Co.

Background

Alaska, while still a Territory, passed a law in 1949 taxing all real and personal property at one percent. The tax was challenged in earlier lawsuits; some taxpayers paid and others became delinquent. In 1953 the territorial legislature repealed the 1949 tax law. The Territory then filed these suits to collect taxes owed for 1949 through 1952, but a District Court dismissed the suits and the Court of Appeals agreed, prompting review because the issue mattered to Alaska’s finances.

Reasoning

The key question was whether repealing the tax law wiped out liability for taxes that had already accrued. The Court looked first to Alaska’s general rule that repeal does not destroy rights already accrued. It then examined a specific savings clause, §2(a), in the repealing Act and concluded that clause only protected taxes owed to municipalities, school districts, or public utility districts and only those already levied or to be levied in the current fiscal year. The Court also noted legislative history showing the Legislature removed a proposed provision that would have canceled all accrued unpaid taxes. On that basis the Court reversed the Court of Appeals and sent the case back for further proceedings.

Real world impact

The decision means the Territory may pursue unpaid property taxes from 1949–1952 rather than having those liabilities erased by the repeal. It affects delinquent property owners and Alaska’s fiscal recovery of past revenues. The case was remanded so lower courts can proceed consistent with the Court’s interpretation.