by Mitch Kokai
Senior Political Analyst, John Locke Foundation
A case involving partisan gerrymandering has grabbed the headlines, but the U.S. Supreme Court already has ruled this month against the state of North Carolina in a different dispute. Specifically, a unanimous high court ruled that the N.C. Department of Revenue was wrong to assess $1.3 million in income tax against a family trust.
The Revenue Department argued it was entitled to the tax because a trust beneficiary lived in North Carolina, even though that beneficiary “received no income from the trust in the relevant tax year, had no right to demand income from the trust in that year, and could not count on ever receiving income from the trust.”
The state Revenue Department lost at every stage of the case.