Opinion ID: 1937110
Heading Depth: 1
Heading Rank: 1

Heading: Review of Pertinent Background Facts and Proceedings.

Text: This action was commenced by the appellant, Racing Association of Central Iowa (RACI), to enjoin the collection of that portion of taxes it was required to pay on adjusted gross receipts from gambling in excess of the tax charged to excursion boats on such receipts. See generally 1989 Iowa Acts ch. 67 (authorizing gambling on excursion boats). RACI claimed the tax was unconstitutional under the Equal Protection Clauses of the United States and Iowa Constitutions. RACI operates a pari-mutuel horse racetrack and casino known as Prairie Meadows Racetrack and Casino in Altoona, Iowa. Appellant, Dubuque Racing Association, Ltd., which intervened in RACI's lawsuit, operates a pari-mutuel dog racetrack and casino known as Dubuque Greyhound Park and Casino in Dubuque, Iowa. Another intervenor, appellant Iowa West Racing Association, holds the gaming license and owns the slot machines for Bluffs Run Racetrack and Casino in Council Bluffs, Iowa. The fourth appellant, Iowa Greyhound Association, intervened to protect the interests of its members, greyhound owners who race at the Dubuque and Council Bluffs dog tracks. The tax statute challenged by these parties is Iowa Code section 99F.11 (1999), which imposes a tax on the adjusted gross receipts received annually from gambling games. The maximum rate is twenty percent. See Iowa Code § 99F.11. The statute has an exception, however, for the adjusted gross receipts ... from gambling games at racetrack enclosures. Id. The tax rate on racetrack gambling receipts began at twenty-two percent in 1997, and has automatically increased by two percent each year to a maximum rate of thirty-six percent in 2004. See id. In our first consideration of this case, we held this differential tax violated the Equal Protection Clause of the United States Constitution and article I, section 6 of the Iowa Constitution. See RACI, 648 N.W.2d at 562. [1] As already mentioned, the United States Supreme Court reversed our decision to the extent it rested on federal constitutional grounds. See Fitzgerald, 539 U.S. at ___, 123 S.Ct. at 2161, 156 L.Ed.2d at 105. It did not, however, consider the legality of the differential tax rates under the Iowa Constitution. Thus, the case was remanded for further proceedings not inconsistent with [the Court's] opinion. Id. Notwithstanding the fact the Supreme Court did not discuss the validity of the statute under the Iowa Constitution, we find it appropriate to reconsider our ruling on the state constitution claim since our court applied the federal rational basis test in determining whether the tax violated the Iowa Constitution. See RACI, 648 N.W.2d at 558. Thus, we again address, in light of the Court's certiorari ruling on the federal claim, whether section 99F.11 violates the Iowa equality provision. See generally Chicago & N.W. Ry. v. Fachman, 255 Iowa 989, 996, 125 N.W.2d 210, 214 (1963) (labeling article I, section 6 of the Iowa Constitution the `equality' provision); Sperry & Hutchinson Co. v. Hoegh, 246 Iowa 9, 19, 65 N.W.2d 410, 416 (1954) (same). Before doing so, however, we consider the effect of the Court's decision on our analysis.