North Carolina Supreme Court Rules on Lottery Tax/Fee Case March 23, 2009 Joseph Bishop-Henchman Joseph Bishop-Henchman On Friday, the North Carolina Supreme Court handed down its ruling in Heatherly v. State, the case determining whether the state lottery in part imposes a tax because its purpose is to raise money for broadly available government services. The Tax Foundation had filed an amicus curiae brief in the case, arguing that the lottery is subject to legislative requirements for passing taxes, and cited a number of authorities and caselaw on tax/fee distinctions. The case was argued last September. One justice recused himself from the case for personal reasons, leaving six justices to decide the matter. However, they tied 3 to 3: 2009 WL 723503 PER CURIAM. Justice MARTIN did not participate in the consideration or decision of this case. As to the appeal of right based on the dissenting opinion, the remaining members of the Court are equally divided, with three members voting to affirm and three members voting to reverse the decision of the Court of Appeals. Accordingly, the decision of the Court of Appeals is left undisturbed and stands without precedential value. See, e.g., Barham v. Hawk, 360 N.C. 358, 625 S.E.2d 778 (2006). In other words, the lower court decision automatically stands but is stripped of its authority for other cases. While it would have been preferable to get a strong ruling from North Carolina echoing rulings by other state courts, at least the troubling lower court decisions are now stripped of their authority beyond this one case. Stay informed on the tax policies impacting you. Subscribe to get insights from our trusted experts delivered straight to your inbox. Subscribe Share Tweet Share Email Topics Center for Legal Reform North Carolina Tags Definition of Tax State Tax and Spending Policy