Judge Gerard Lynch
Plaintiffs’ nuclear power plant is the sole entity taxed under Vermont’s “Generating Tax” imposing a charge on electricity produced by every generating facility in Vermont with a capacity of at least 200,000 kilowatts. The Generating Tax was imposed after a 2012 federal ruling denying Vermont’s bid to shut the plant. Second Circuit affirmed district court’s dismissal—for lack of jurisdiction under the Tax Injunction Act (TIA)—of plaintiffs’ suit challenging the Generating Tax’s constitutionality under the U.S. Constitution’s Supremacy, Commerce and Equal Protection Clauses. Discussing Travelers Insurance v. Cuomo and the three factor test in San Juan Cellular Telephone v. Public Service Commission, the court concluded the Generating Tax was for general revenue purposes—and not a punitive fine or regulatory fee as plaintiffs argued—and thus qualified as a tax for TIA purposes. The circuit further concluded that Vermont’s procedures offered an adequate opportunity to challenge the constitutionality of the Generating Tax in state court. Citing case law, the circuit rejected as without merit plaintiffs’ argument that Vermont’s judicial review procedure does not grant taxpayers the opportunity to raise constitutional challenges.
