United States Fourth Circuit

District court's denial of defendants-insurance companies' motion for summary judgment in plaintiff's suit seeking declaration that municipalities are entitled to assess municipal business license taxes based on, or measured by, the total flood insurance premiums collected in the particular municipality by insurance companies under an arrangement with the Federal Emergency Management Agency (FEMA), is reversed, where said taxes imposed by the South Carolina municipalities contravene the principles of sovereign immunity, because: 1) the premiums belong to the federal government, and absent the federal government’s consent, these funds may not be taxed; 2) defendants, in their operation of and participation with the National Flood Insurance Program, are federal instrumentalities so closely connected with the federal government that they are immune from taxation; and 3) the federal government did not consent to this tax, and it is therefore invalid.

Appellate Information

• Decided 03/01/2013
• Published 03/01/2013

Judges

• GREGORY

Court

• United States Fourth Circuit

Counsel