FITZGERALD, TREASURER OF IOWA v. RACING ASSOCIATION OF CENTRAL IOWA et al.

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Syllabus
FITZGERALD, TREASURER OF IOWA v. RACING
ASSOCIATION OF CENTRAL IOWA et al.
certiorari to the supreme court of iowa
No. 02–695. Argued April 29, 2003—Decided June 9, 2003
An Iowa law that, among other things, authorized racetracks to operate
slot machines and imposed a graduated tax upon racetrack slot machine
adjusted revenues, with a top rate that started at 20 percent and would
automatically rise over time to 36 percent, left a 20 percent tax rate
on riverboat slot machine adjusted revenues in place. Respondents,
racetracks and a dog owners’ association, filed a state-court suit chal-
lenging the law on the ground that the 20 percent/36 percent tax rate
difference violated the Equal Protection Clause, U. S. Const., Amdt. 14,
§ 1. The District Court upheld the statute, but the Iowa Supreme
Court reversed.
Held:
1. This Court has jurisdiction to review the state court’s judgment,
which does not rest independently upon state law. The state court’s
opinion says that Iowa courts should apply the same analysis in consid-
ering either state or federal equal protection claims. In such circum-
stances, this Court considers a state-court decision as resting upon
federal grounds sufficient to support jurisdiction. P. 106.
2. Iowa’s differential tax rate does not violate the Federal Equal Pro-
tection Clause. A law, such as Iowa’s, which distinguishes for tax pur-
poses among revenues obtained within a State by two enterprises con-
ducting business in the State, is subject to rational-basis review. See
Nordlinger v. Hahn, 505 U. S. 1, 11–12. The Iowa law, like most laws,
might predominantly serve one general objective, e. g., rescuing race-
tracks from economic distress, while containing subsidiary provisions
that seek to achieve other desirable (perhaps even contrary) ends as
well, thereby producing a law that balances objectives but still serves
the general objective when seen as a whole. And this law, seen as a
whole, does what the state court says it seeks to do, namely, advance
the racetracks’ economic interests. A rational legislator might believe
that the law’s grant to the racetracks of authority to operate slot ma-
chines should help the racetracks economically—even if its simultaneous
imposition of a tax on revenues means less help than respondents might
like—and the Constitution grants legislators, not courts, broad author-
ity (within the bounds of rationality) to decide whom they wish to help

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104 FITZGERALD v. RACING ASSN. OF CENTRAL IOWA
Syllabus
with their tax laws and how much help those laws should provide.
Once one realizes that not every provision in a single law must share a
single objective, one has no difficulty finding the necessary rational sup-
port for the difference in tax rates here. Though harmful to the race-
tracks, it is helpful to the riverboats, which were also facing finan-
cial peril. This is not a case where the facts preclude any plausible
inference that the reason for the different tax rates is to help the river-
boat industry. Cf. Nordlinger, supra, at 16. Allegheny Pittsburgh
Coal Co. v. Commission of Webster Cty., 488 U. S. 336, distinguished.
Pp. 106–110.
648 N. W. 2d 555, reversed and remanded.
Breyer, J., delivered the opinion for a unanimous Court.
Thomas J. Miller, Attorney General of Iowa, argued the
cause for petitioner. With him on the briefs were Julie F.
Pottorff, Deputy Attorney General, and Jeffrey D. Farrell
and Jean M. Davis, Assistant Attorneys General.
Kent L. Jones argued the cause for the United States as
amicus curiae urging reversal. With him on the brief were
Solicitor General Olson, Assistant Attorney General O’Con-
nor, David English Carmack, and Judith A. Hagley.
Mark McCormick argued the cause for respondents.
With him on the brief were Thomas L. Flynn, Edward M.
Mansfield, Stephen C. Krumpe, and Lawrence P. McLellan.*
*Briefs of amici curiae urging reversal were filed for the State of Mis-
souri et al. by Jeremiah W. (Jay) Nixon, Attorney General of Missouri,
James R. Layton, State Solicitor, Alana M. Barraga´ n-Scott, Assistant
Attorney General, and by the Attorneys General for their respective juris-
dictions as follows: William H. Pryor, Jr., of Alabama, Michael A. Cox of
Michigan, Mike Hatch of Minnesota, Mike Moore of Mississippi, Patricia
A. Madrid of New Mexico, Anabelle Rodrı´guez of Puerto Rico, Larry
Long of South Dakota, Paul G. Summers of Tennessee, and William H.
Sorrell of Vermont; and for the City of Bettendorf, Iowa, et al. by Thomas
D. Waterman, Dennis W. Johnson, and Robert N. Johnson III.
Briefs of amici curiae urging affirmance were filed for the City of Du-
buque, Iowa, by Barry A. Lindahl; for Polk County, Iowa, by John P.
Sarcone; and for the Institute for Justice by Clint Bolick, William H.
Mellor, Dana Berliner, and Clark M. Neily.

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Opinion of the Court
Justice Breyer delivered the opinion of the Court.
Iowa taxes adjusted revenues from slot machines on ex-
cursion riverboats at a maximum rate of 20 percent. Iowa
Code § 99F.11 (2003). Iowa law provides for a maximum tax
rate of 36 percent on adjusted revenues from slot machines
at racetracks. §§ 99F.4A(6), 99F.11. The Iowa Supreme
Court held that this 20 percent/36 percent difference in tax
rates violates the Federal Constitution’s Equal Protection
Clause, Amdt. 14, § 1. 648 N. W. 2d 555 (2002). We dis-
agree and reverse the Iowa Supreme Court’s determination.
I
Before 1989, Iowa permitted only one form of gambling—
parimutuel betting at racetracks—the proceeds of which it
taxed at a six percent rate. Iowa Code § 99D.15 (1984). In
1989, it authorized other forms of gambling, including slot
machines and other gambling games on riverboats, though it
limited bets to $5 and losses to $200 per excursion. 1989
Iowa Acts ch. 67, §§ 3, 9(2); Iowa Code § 99F.3 (1996). Iowa
taxed adjusted revenues from slot machine gambling at
graduated rates, with a top rate of 20 percent. 1989 Iowa
Acts ch. 67, § 11; Iowa Code § 99F.11 (1996).
In 1994, Iowa enacted a law that, among other things, re-
moved the riverboat gambling $5/$200 bet/loss limits, 1994
Iowa Acts ch. 1021, § 19, authorized racetracks to operate
slot machines, § 13; Iowa Code §§ 99F.1(9), 99F.4A (1996), and
imposed a graduated tax upon racetrack slot machine ad-
justed revenues with a top rate that started at 20 percent
and would automatically rise over time to 36 percent, 1994
Iowa Acts ch. 1021, § 25; Iowa Code § 99F.11 (1996). The Act
did not alter the tax rate on riverboat slot machine adjusted
revenues, thereby leaving the existing 20 percent rate in
place. Ibid.
Respondents, a group of racetracks and an association of
dog owners, brought this lawsuit in state court challenging
the 1994 legislation on the ground that the 20 percent/36 per-

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cent tax rate difference that it created violated the Federal
Constitution’s Equal Protection Clause, Amdt. 14, § 1. The
State District Court upheld the statute. The Iowa Supreme
Court disagreed and, by a 4-to-3 vote, reversed the District
Court. The majority wrote that the “differential tax com-
pletely defeats the alleged purpose” of the statute, namely,
“to help the racetracks recover from economic distress,” that
there could “be no rational reason for this differential tax,”
and that the Equal Protection Clause consequently forbids
its imposition. 648 N. W. 2d, at 560–562. We granted cer-
tiorari to review this determination.
II
Respondents initially claim that the Iowa Supreme Court’s
decision rests independently upon state law. And they
argue that this state-law holding bars review of the federal
issue. We disagree. The Iowa Supreme Court’s opinion,
after setting forth the language of both State and Federal
Equal Protection Clauses, says that “Iowa courts are to
‘apply the same analysis in considering the state equal pro-
tection claims as . . . in considering the federal equal protec-
tion claim.’ ” Id., at 558. We have previously held that, in
such circumstances, we shall consider a state-court decision
as resting upon federal grounds sufficient to support this
Court’s jurisdiction. See Pennsylvania v. Muniz, 496 U. S.
582, 588, n. 4 (1990) (no adequate and independent state
ground where the court says that state and federal constitu-
tional protections are “ ‘identical’ ”). Cf. Michigan v. Long,
463 U. S. 1032, 1041–1042 (1983) ( jurisdiction exists where
federal cases are not “being used only for the purpose of
guidance” and instead are “compel[ling] the result”). We
therefore find that this Court has jurisdiction to review the
Iowa Supreme Court’s determination.
III
We here consider whether a difference in state tax rates
violates the Fourteenth Amendment’s mandate that “[n]o

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Opinion of the Court
State shall . . . deny to any person . . . the equal protection
of the laws,” § 1. The law in question does not distinguish
on the basis of, for example, race or gender. See, e. g., Lov-
ing v. Virginia, 388 U. S. 1 (1967); United States v. Virginia,
518 U. S. 515 (1996). It does not distinguish between in-
state and out-of-state businesses. See, e. g., Metropolitan
Life Ins. Co. v. Ward, 470 U. S. 869 (1985). Neither does it
favor a State’s long-time residents at the expense of resi-
dents who have more recently arrived from other States.
Cf. Hooper v. Bernalillo County Assessor, 472 U. S. 612
(1985). Rather, the law distinguishes for tax purposes
among revenues obtained within the State of Iowa by two
enterprises, each of which does business in the State.
Where that is so, the law is subject to rational-basis review:
“[T]he Equal Protection Clause is satisfied so long as
there is a plausible policy reason for the classification,
the legislative facts on which the classification is appar-
ently based rationally may have been considered to be
true by the governmental decisionmaker, and the rela-
tionship of the classification to its goal is not so attenu-
ated as to render the distinction arbitrary or irrational.”
Nordlinger v. Hahn, 505 U. S. 1, 11–12 (1992) (citations
omitted).
See also id., at 11 (rational-basis review “is especially defer-
ential in the context of classifications made by complex tax
laws”); Allied Stores of Ohio, Inc. v. Bowers, 358 U. S. 522,
527 (1959) (the Equal Protection Clause requires States,
when enacting tax laws, to “proceed upon a rational ba-
sis” and not to “resort to a classification that is palpably
arbitrary”).
The Iowa Supreme Court found that the 20 percent/36
percent tax rate differential failed to meet this standard
because, in its view, that difference “frustrated” what it
saw as the law’s basic objective, namely, rescuing the race-
tracks from economic distress. 648 N. W. 2d, at 561. And

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no rational person, it believed, could claim the contrary. Id.,
at 561–562.
The Iowa Supreme Court could not deny, however, that
the Iowa law, like most laws, might predominantly serve one
general objective, say, helping the racetracks, while contain-
ing subsidiary provisions that seek to achieve other desirable
(perhaps even contrary) ends as well, thereby producing a
law that balances objectives but still serves the general ob-
jective when seen as a whole. See Railroad Retirement Bd.
v. Fritz, 449 U. S. 166, 181 (1980) (Stevens, J., concurring in
judgment) (legislation is often the “product of multiple and
somewhat inconsistent purposes that led to certain compro-
mises”). After all, if every subsidiary provision in a law de-
signed to help racetracks had to help those racetracks and
nothing more, then (since any tax rate hurts the racetracks
when compared with a lower rate) there could be no taxation
of the racetracks at all.
Neither could the Iowa Supreme Court deny that the 1994
legislation, seen as a whole, can rationally be understood to
do what that court says it seeks to do, namely, advance the
racetracks’ economic interests. Its grant to the racetracks
of authority to operate slot machines should help the race-
tracks economically to some degree—even if its simultaneous
imposition of a tax on slot machine adjusted revenues means
that the law provides less help than respondents might like.
At least a rational legislator might so believe. And the
Constitution grants legislators, not courts, broad authority
(within the bounds of rationality) to decide whom they wish
to help with their tax laws and how much help those laws
ought to provide. “The ‘task of classifying persons for . . .
benefits . . . inevitably requires that some persons who have
an almost equally strong claim to favored treatment be
placed on different sides of the line,’ and the fact the line
might have been drawn differently at some points is a matter
for legislative, rather than judicial, consideration.” Id., at
179 (citation omitted). See also ibid. ( judicial review is “at

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an end” once the court identifies a plausible basis on which
the legislature may have relied); Nordlinger, supra, at 17–18.
Once one realizes that not every provision in a law must
share a single objective, one has no difficulty finding the nec-
essary rational support for the 20 percent/36 percent differ-
ential here at issue. That difference, harmful to the race-
tracks, is helpful to the riverboats, which, as respondents
concede, were also facing financial peril, Brief for Respond-
ents 8. See also 648 N. W. 2d, at 557. These two character-
izations are but opposite sides of the same coin. Each re-
flects a rational way for a legislator to view the matter.
And aside from simply aiding the financial position of the
riverboats, the legislators may have wanted to encourage the
economic development of river communities or to promote
riverboat history, say, by providing incentives for riverboats
to remain in the State, rather than relocate to other States.
See Gaming Study Committee Report (Sept. 3, 1993), re-
printed in App. 76–84, 86. Alternatively, they may have
wanted to protect the reliance interests of riverboat opera-
tors, whose adjusted slot machine revenue had previously
been taxed at the 20 percent rate. All these objectives are
rational ones, which lower riverboat tax rates could further
and which suffice to uphold the different tax rates. See Al-
lied Stores, supra, at 528; Nordlinger, supra, at 12. See
also Madden v. Kentucky, 309 U. S. 83, 88 (1940) (imposing
burden on respondents to “negative every conceivable basis”
that might support different treatment).
Respondents argue that Allegheny Pittsburgh Coal Co. v.
Commission of Webster Cty., 488 U. S. 336 (1989), holds to
the contrary. Brief for Respondents 21. In that case, the
Court held that substantial differences in the level of prop-
erty tax assessments that West Virginia imposed upon simi-
lar properties violated the Federal Equal Protection Clause.
But the Court later stated, when it upheld in Nordlinger
a California statute creating similar differences in property
taxes, that “an obvious and critical factual difference be-

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tween this case and Allegheny Pittsburgh is the absence of
any indication in Allegheny Pittsburgh that the policies un-
derlying an acquisition-value taxation scheme could conceiv-
ably have been the purpose for the . . . unequal assessment.”
505 U. S., at 14–15. The Court in Nordlinger added that
“Allegheny Pittsburgh was the rare case where the facts
precluded any plausible inference that the reason for the
unequal assessment practice was to achieve the benefits of
an acquisition-value tax scheme.” Id., at 16–17, and n. 7.
Here, “the facts” do not “preclud[e]” an inference that the
reason for the different tax rates was to help the riverboat
industry or the river communities. Id., at 16.
IV
We conclude that there is “a plausible policy reason for the
classification,” that the legislature “rationally may have . . .
considered . . . true” the related justifying “legislative facts,”
and that the “relationship of the classification to its goal is
not so attenuated as to render the distinction arbitrary or
irrational.” Id., at 11. Consequently the State’s differen-
tial tax rate does not violate the Federal Equal Protection
Clause. The Iowa Supreme Court’s judgment to the con-
trary is reversed, and the case is remanded for further pro-
ceedings not inconsistent with this opinion.
So ordered.