Ordinance Challenge

How do I challenge an unconstitutional tax or impact fee?

Identify the legal theory — preemption (only states can authorize new taxes), Nollan/Dolan rough-proportionality challenge, or pure regulatory-takings claim — then preserve the record through formal protest, file in the appropriate forum, and pursue individual or class-action relief.

Municipal "fees" that function as taxes are unconstitutional under state delegated-authority law. Impact fees disproportionate to the development's impact are unconstitutional under Nollan/Dolan after Sheetz. Both are challengeable in court.

Step 1 — Identify the theory.

The legal theory drives the procedure. Three common theories:

• Preemption: state law alone can authorize new taxes; cities exceeding that authority impose unconstitutional levies.
• Nollan/Dolan: development exactions must have essential nexus and rough proportionality to the project's impact. Many flat-rate impact fees fail rough proportionality.
• Regulatory taking: where the fee is so extreme it functions as a taking, Fifth Amendment compensation applies.

Step 2 — Preserve the record.

Pay under protest. Document the protest in writing to the imposing authority. Many states have specific protest procedures that must be followed to preserve refund rights. Failure to protest can waive the claim.

Step 3 — Choose the forum.

Federal claims go to federal court after Knick (2019). Some state-law theories require state-court adjudication first; review the state's specific framework. Class actions are often the right vehicle for systemic schemes affecting many similarly situated owners.

Step 4 — Pursue the remedy.

Available remedies include refund of unconstitutional fees paid, injunctive relief against future collection, and attorney's fees under 42 U.S.C. § 1988 for federal civil rights theories.

We are currently prosecuting multiple Alabama unauthorized-tax claims. See our constitutional-claims practice for the firm's results.

Quick reference

1. Identify the theory. Preemption, Nollan/Dolan, or regulatory taking.
2. Preserve the record. Pay under protest in writing per state procedure.
3. Choose the forum. Federal court for federal claims; state court where required.
4. Pursue the remedy. Refund, injunction, and attorney's fees under § 1988.

Request a case evaluation · Ordinance Challenge practice page