TAXING AUTHORITY’S RETENTION OF TAX SALE PROCEEDS EXCEEDING TAX DEBT UNCONSTITUTIONAL

In an opinion issued May 25, 2023, the Supreme Court of the United States ruled that retention by a County of tax sale proceeds in excess of the amount of the tax debt for which the property was sold violated the Takings Clause of the Fifth Amendment to the Constitution of the United States.

The Court determined that while the County had the power to sell the property to recover the unpaid property taxes, it could not use the tax debt to confiscate more property than was due. Doing so effected a “classic taking in which the government directly appropriates private property for its own use.”