Opinion ID: 2792832
Heading Depth: 2
Heading Rank: 1

Heading: lscp.

Text: 1. Equal protection. LSCP first contends the natural gas replacement tax violates both the Federal Equal Protection Clause and article I, section 6 of the Iowa Constitution. LSCP asserts it is similarly situated to other directly connected ethanol plants within the state, but is taxed at a different rate than other such plants solely because of its geographic location within a particular CSA. See Racing Ass’n of Cent. Iowa v. Fitzgerald (RACI I), 648 N.W.2d 555, 559 (Iowa 2002) (focusing on the main activity being taxed—slot machine gambling—rather than dissimilar scenery surrounding different facilities), rev’d, Fitzgerald v. Racing Ass’n of Cent. Iowa, 539 U.S. 103, 110, 123 S. Ct. 2156, 2161, 156 L. Ed. 2d 97, 105 (2003); see also Racing Ass’n of Cent. Iowa v. Fitzgerald (RACI II), 675 N.W.2d 1, 15 (Iowa 2004) (“In the end, we return to the fact that the item taxed—gambling revenue—is identical.”). In particular, LSCP compares itself to a biorefining plant located in Emmetsburg. Like LSCP, the Emmetsburg plant is directly connected, but because it is situated within two miles of the city of Emmetsburg, it is in the Emmetsburg CSA and therefore benefits from a replacement tax 8 rate of zero. 4 See Iowa Code § 437A.3(22)(a)(1)(j) (establishing the Emmetsburg CSA). This disparity of taxation, LSCP posits, violates our constitutional command that “[a]ll persons in like situations should stand equal before the law.” Chi. & Nw. Ry. v. Fachman, 255 Iowa 989, 1002, 125 N.W.2d 210, 217 (1963). 2. Limitations period for refund claims. LSCP contends the shorter limitations period for refund claims based on a constitutional objection also violates the Federal Equal Protection Clause and article I, section 6 of the Iowa Constitution. In LSCP’s view, the shorter limitations period draws a classification between constitutional claims and other types of claims, and therefore impedes its fundamental right of meaningful access to the courts to resolve constitutional claims. Because it contends a fundamental right is at stake, LSCP urges our application of strict scrutiny analysis rather than the less demanding rational basis standard. 3. Dormant Commerce Clause. Finally, LSCP posits that the natural gas replacement tax penalizes consumers purchasing natural gas from nonresident suppliers. The penalty arises, LSCP asserts, because LDCs have freedom to allocate their replacement tax burden among their customers at different rates—and, because LDCs often do allocate the tax burden differently, many high-volume LDC customers pay tax at a lower rate than does LSCP. Because there are no natural gas suppliers in Iowa, LSCP contends the statutory framework establishing the higher rate it pays as a directly connected consumer is applied only to 4A witness for the Department explained that the replacement tax formula under sections 437A.5(3)(a)–(c) utilizes only “centrally assessed” tax liability. See Iowa Code § 437A.5(3)(a). Because municipalities are locally assessed, the witness explained, the numerator in the fraction prescribed in section 437A.5(3) would always be zero for many municipal CSAs. 9 transactions involving nonresident suppliers in violation of the dormant Commerce Clause.