Legal Definitions - McNary comity

McNary Comity is a legal principle that guides how federal courts interact with state tax systems. It dictates that a U.S. district court should generally not hear a lawsuit brought by a taxpayer that challenges the way a state administers its tax system, even if the challenge is based on alleged violations of civil rights. The principle emphasizes respect for state sovereignty and the idea that states should have the primary responsibility for managing their own tax affairs, with state courts being the appropriate venue for resolving disputes related to state taxes.

Here are some examples illustrating McNary Comity:

• A group of homeowners in a particular county believes their property tax assessments are unfairly inflated compared to other neighborhoods, and they allege this disparity is due to racial discrimination, violating their civil rights.

  In this scenario, if the homeowners attempt to file a lawsuit in a federal district court, McNary Comity would likely prevent the federal court from hearing their case. Even though their claim involves civil rights, the core issue is a challenge to the administration of a state's property tax system. The federal court would defer to the state's own administrative and judicial processes to resolve the dispute, requiring the homeowners to pursue their claims through state channels first.

• A small business owner claims that a new state sales tax policy, which imposes higher rates on certain types of goods, disproportionately harms businesses owned by specific ethnic minorities, thereby infringing upon their constitutional rights to equal protection.

  If the business owner tries to sue the state tax department in federal court to block the implementation of this policy, McNary Comity would typically apply. The federal court would likely decline to hear the case, reasoning that the challenge, despite its civil rights component, is fundamentally about the administration of a state's sales tax system. The expectation is that the state's own courts and administrative bodies are the proper forums to address such grievances.

• An individual alleges that a state income tax audit was initiated against them solely because of their political activism and public criticism of state policies, violating their First Amendment rights to free speech.

  Should this individual attempt to bring a lawsuit against the state tax authority in a federal district court, McNary Comity would likely come into play. The federal court would probably abstain from hearing the case, recognizing that the complaint, while framed as a civil rights violation, directly challenges the administrative actions within the state's income tax system. The principle directs that such matters should first be addressed within the state's own legal and administrative framework.