In a unanimous decision Monday, the U.S. Supreme Court ruled Iowa can charge a higher tax rate on racetracks slots profits than on profits from riverboat slots. Iowa charges a maximum 20% tax on riverboat slot machine profits, while racetrack slot machine profits are taxed on a graduated scale that is set to rise to 36% in 2004. The Iowa Supreme Court earlier ruled the tax rate difference violated the Equal Protection Clause of the U.S. Constitution, but the nation's highest court overturned the ruling yesterday.
Justice Stephen Breyer wrote the court's opinion on Fitzgerald, Treasurer of Iowa v. Racing Association of Central Iowa Et. Al. "We conclude that there is 'a plausible policy reason for the classification," the opinion reads. "Consequently, the State's differential tax rate does not violate the Equal Protection Clause."