Appeal from an order and judgment of the United States District Court for the Southern District of New York (Sullivan, J.), which granted Defendants' motion to dismiss Plaintiffs' complaint pursuant to Federal Rules of Civil Procedure 12(b)(1) and 12(b)(6).
The opinion of the court was delivered by: Wesley, Circuit Judge:
Joseph, et. al v. Hyman, et. al
Argued: September 12, 2011
Calabresi, Wesley, and Lohier, Circuit Judges.
The district court found 6 that comity precluded federal court adjudication of 7 Plaintiff's claims. We conclude that the district court 8 properly dismissed the complaint.
36 This case requires us to examine the role federal 37 courts should play in settling challenges to state tax 38 schemes. For the reasons that follow, we affirm the 39 district court's well-written opinion declining to exercise jurisdiction over plaintiffs' challenge to a New York state 2 tax scheme that exempted New York City residents from a tax 3 levied on parking services rendered in Manhattan. Pursuant 4 to Levin v. Commerce Energy, Inc., 130 S. Ct. 2323 (2010), 5 comity concerns counsel against federal court adjudication 6 of plaintiffs' claims.
New York State imposes, or authorizes New York City to 9 impose, taxes of 18.375% on parking lots and garages in 10 Manhattan. These taxes include various statewide, citywide, 11 and mass-transit-funding taxes. Also included in that rate 12 is a city-implemented 8% surtax on parking services rendered 13 in Manhattan. N.Y. Tax Law § 1212-A. In 1985, the state 14 legislature amended the tax law to provide an exemption from 15 the 8% surtax for Manhattan residents for one parking space 16 leased for one month or longer. N.Y. Tax Law § 1212- 17 A(a)(1). Appellants include a group of commuters from New 18 Jersey and New York outside of Manhattan, and a Queens 19 resident who does not commute to Manhattan. Appellants sued 20 New York City and the State, along with a number of city and 21 state officials, challenging the tax exemption granted to 22 Manhattan residents but not the 8% surtax.
The exemption is narrow. It exempts Manhattan residents from the 8% surtax only at their primary parking 2 location and only where the resident can demonstrate:
(1) that Manhattan is their primary residence; (2) that they 4 pay for parking services rendered on a monthly or 5 longer-term basis; (3) that the vehicle is not used to carry 6 on any trade, business, or commercial activity; and (4) that 7 the vehicle is registered to the individual's primary 8 residence in Manhattan. N.Y. Tax Law § 1212-A(a)(1)(i)(B); 9 N.Y.C. Admin. Code § 11-2051(d). Appellees filed a motion 10 to dismiss, arguing, among other things, that comity barred 11 the federal courts from hearing plaintiffs' challenge to the 12 state law; the district court granted the motion.
The 13 district court held that comity concerns, explained by the 14 Supreme Court in Levin v. Commerce Energy, Inc., 130 S. Ct. 15 2323 (2010), counseled against ...