SW Legal studies in Business

Different Tax Treatment of Properties Does Not Violate Equal Protection Clause

Iowa high court held that to subject rental apartment buildings to higher commercial tax rates than apply to owner-occupied condos does not violate equal protection because while the property may be similar, the ownership is different.

Topic Constitutional Law
Key Words

Equal Protection; Taxation; Housing

C A S E   S U M M A R Y

Timberland owns residential apartment buildings in Iowa. As apartment, the buildings are subject to higher tax rates as commercial property than the tax rates that would be paid on the properties if they were classified as residential. Timberland sued, contending that the discriminatory tax rate violated the equal protection clause. Condos are taxed as residential property while apartments are taxed as commercial property, but both are residential units that can be of similar construction. The district court held for the state. Timberland appealed..


Affirmed. The designation of the apartments as commercial rather than residential does not violate equal protection. Apartments and condos may be similar structures, but apartments are usually rental property and condos are usually individually owned and treated the same as single-family units even if located in a multi-unit building. For equal protection to be violated, similarly situated individuals must be subject to different treatment. That has not happened here. The basis for the difference is to separate all property that is primarily owner-occupied compared to property that is primarily commercially owned and rented.


Timberland Partners XXI v. Iowa Dept. of Revenue, 757 N.W.2d 172 (Sup. Ct., Iowa, 2008)

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