Tooele Associates, LP v. Tooele City (2011)

Utah Supreme Court

2011 UT 4, 247 P.3d 371

     A threshold question to determine the vailidity of a local fee is whether the charge is a “fee” or a “tax”  A fee is compensation for a service or benefit provided by a government agency, or is to defray the cost of regulation.  A tax raises revenue for general government purposes, and is not necessarily tied to a specific service or regulatory action. 

     A municipal fee is entitled to a presumption of constitutionality and validity.  A person may overcome that presumption by showing that the fee does not have a reasonable relationship to the cost of the regulation activity. 

    A fee may be challenged in one of two ways:  (1) By showing that the fee is actually a “tax” enacted for the purpose raising revenue; or (2) By showing that the fee is unreasonable because it is disproportionate either to the cost of the service rendered or the cost of regulating the activity. 

     A local government may use a multi-year approach to determine if a fee reasonably relates to the actual cost of the service or regulation. 

Full Text of Tooele Associates, LP v. Tooele City

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