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Press Release

Alaska Attorney General Taylor Joins 13-State Coalition to Sue Biden Treasury Dept., Seek to Protect State Tax Cuts

April 1, 2021

(Anchorage, AK) – Attorney General Treg Taylor joined a 13-state, bipartisan coalition in filing suit Wednesday to protect the well-established and critical taxing authority of states – in this case, the power to lower state taxes for their residents.

The lawsuit – led by West Virginia Attorney General Patrick Morrisey, Alabama Attorney General Steve Marshall, and Arkansas Attorney General Leslie Rutledge – argues federal treasury officials cannot force states to relinquish control of their taxing authority in return for much-needed economic aid related to COVID-19. The States take specific issue with a stimulus bill provision that the coalition refers to as one of the most egregious power grabs by the federal government in the nation’s history.

“The American Rescue Plan Act is being challenged for impermissibly seizing taxing authority from the States," says Attorney General Treg Taylor. "This usurps the ability of the States to make their own decisions based on their own unique circumstances and the needs of their residents."

Attorneys general argue that the mandate could be used to claw back a share of a state’s stimulus allotment. This creates an impermissible chilling effect on state lawmakers’ willingness to reduce the tax burdens on their citizens.

Members of the coalition sought to avoid litigation by asking U.S. Treasury Secretary Janet Yellen to confirm the legislation would not strip states of their taxing authority, however, the lawsuit argues her response did not place limits on the vague provision – uncertainty that she admits exists in referring to the ambiguity as a “thorny” issue in testimony to Congress.

Attorneys general filed the lawsuit against the U.S. Department of Treasury, Secretary Yellen and the Department’s Acting Inspector General Richard K. Delmar, who would be responsible for seeking any potential claw back of federal funds.

The lawsuit sets forth charges of unconstitutional exercise of federal power, specifically violations of the 10th Amendment, the conditional spending doctrine and the anti-commandeering doctrine.

The attorneys general seek a court order that prohibits enforcement of the federal tax mandate and declares it unconstitutional.

Alaska joined the West Virginia-Alabama-and Arkansas-led lawsuit with support from Florida, Iowa, Kansas, Montana, New Hampshire, Oklahoma, South Carolina, South Dakota and Utah.

The lawsuit was filed in U.S. District Court for the Northern District of Alabama.

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Department Media Contact: Assistant Attorney General Maria Bahr or Assistant Attorney General Charlotte Rand.