DES MOINES (CN) – The Iowa Department of Revenue did not violate state and federal equal-protection clauses by taxing apartments more than condominiums, the Iowa Supreme Court ruled.
Timberland Partners XXI sued the state for classifying apartment buildings as commercial, but only classifying condominiums as commercial when they are used for a commercial venture. Condominiums are classified as residential when they are used for human living space.
Timberland wants apartments to be considered residential because the tax rate is lower than the commercial rate. The company argued that the tax code violated its right to equal protection.
Justice Baker ruled that the different tax classifications are appropriate because apartments and condominiums are not different enough not to be “similarly situated.”
“Although condominiums may be marketed and leased like apartments, each condominium unit is treated as a separate real estate parcel.” Baker wrote. “For classification purposes, condominiums are more like single-family residences than apartments.”