62 N.Y.2d 38 (1984)
A tax classification violates equal protection if the difference in treatment constitutes invidious discrimination or is palpably arbitrary, even if the legislature has broad latitude in establishing tax classifications.
Summary
This case addresses the constitutionality of a New York State Real Property Tax Law provision that created disparate treatment for similarly situated veterans regarding real property tax exemptions. The Court of Appeals held that the specific provision, section 458(5), was unconstitutional because it violated the equal protection clauses of the New York and United States Constitutions. The classification lacked a rational basis as it treated veterans differently based on arbitrary distinctions. The court invalidated the entire subsection because paragraphs (a) and (b) were intrinsically linked, representing a single legislative policy. The decision emphasizes that while legislatures have broad power in tax classifications, such classifications must not be arbitrary or discriminatory.
Facts
Section 458(5) of the Real Property Tax Law governed real property tax exemptions for veterans. The law contained provisions which resulted in different treatment for veterans based on when and where they served, and the policy preferences of local governments. This created a situation where similarly situated veterans did not receive equal tax exemptions.
Procedural History
The case originated in the lower courts, challenging the constitutionality of the tax law. The Appellate Division found the law unconstitutional. The case then went to the New York Court of Appeals.
Issue(s)
Whether subdivision 5 of section 458 of the Real Property Tax Law violates the equal protection clauses of the New York and United States Constitutions by creating disparate treatment of similarly situated veterans.
Holding
Yes, because the disparate treatment of similarly situated veterans lacks a rational basis, making the classification arbitrary and discriminatory.
Court’s Reasoning
The court recognized the Legislature’s broad latitude in establishing tax classifications, citing Madden v. Kentucky, but emphasized that this power is not unlimited. The court stated that “a statute should nevertheless be declared unconstitutional if the difference in treatment constitutes invidious discrimination or is palpably arbitrary.” The court agreed with the lower courts that the disparate treatment of veterans under section 458(5) lacked a rational basis, thus violating equal protection. The court then invalidated the entire subdivision 5, finding that paragraphs (a) and (b) were intrinsically linked. The court reasoned that the policy decision to grant or deny increases in veterans’ real property tax exemptions properly rests within the discretion of the local and State Legislatures.