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State and Local Tax Law: Local Tax

What is Local Tax?

Just as the federal and state governments collect revenue, so too do local governments, in the form of taxes and fees to fund various services, like schools, sewers, garbage collection and water.  Taxes might be imposed on property, purchases (sales tax) and sometimes on income.  Fees might be imposed, among other things, on the user of a service or to offset a cost or burden.

Look to a state's constitution and and statutory code for guidance on what powers are conferred -- or not, as the case may be -- to the local governments to tax. Code sections, for example, might be titled something like "Local Power to Tax".  

Taxes vs. fees

The distinction between taxes and fees is not always clear.  For more on the subject, including the Supreme Court's perspective, see:

  • Hugh D. Spitzer, Taxes vs. Fees: A Curious Confusion, 38 Gonz. L. Rev. 335 (2003).
  • Koontz v. St. Johns River Water Management District, 570 U.S. __ (2013).

Selected Resources

Check out some of these texts or websites to assist with your local tax research:

Local Government Law (Ch. 23 - Taxation) -- Available on Westlaw Next 

  • Treatise discusses sources of authority for the taxing function, kinds of taxes, state constitutional limitations, federal limitations, tax disputes, taxpayer remedies, and more.

McQuillin: The Law of Municipal Corporations (Ch. 44 - Taxation) -- Available on Westlaw Next

  • Sections include municipalities' power to tax and limitations on taxation, plus levies, assessments, tax liens, remedies for nonpayment of taxes and remedies for wrongful taxation.

Mass.Gov - Department of Revenue - Division of Local Services  

  • Division of the Massachusetts' tax administrator looks at local property tax, local accounting and treasury management, interprets state laws affecting local governance and "maintains a comprehensive databank on local finances" among other functions.  Other states' tax administrators will likely have similar divisions.

Refer to the Secondary Sources page in this guide for additional recommendations.