HK’s David Wilkes Writes Op-Ed for Bloomberg Tax Arguing Against Surplus Retention Laws

April 26, 2023 | Articles & Press Releases

Minnesota Skyline

Herman Katz’s David Wilkes has written an op-ed for Bloomberg Tax, arguing that surplus retention laws, which allow local governments to confiscate homes for unpaid property taxes, are a violation of the US Constitution’s Fifth Amendment guarantee of just compensation. In the article, Wilkes notes that over a dozen states impose surplus retention laws and that the US Supreme Court is set to hear arguments this week in Tyler v. Hennepin County, a case demonstrating that such laws violate the Constitution and other requirements.

“Surplus retention laws allow the government to keep any funds received at auction that exceed the original tax debt. They favor the tax collector and impose a severe downside to investing in one’s home. They also represent a stark deprivation of a basic American property right in wealth created through home equity,” Wilkes writes. He contends that such laws represent a sneaky legal device by local governments to raise revenue to which they shouldn’t be entitled and that the correct outcome in Tyler v. Hennepin County will recognize that home equity is a real and valuable property right that cannot be taken by local government without just compensation.

Wilkes is part of a group of advocates filing an amicus brief in the case of Tyler v. Hennepin County, which will be heard by the US Supreme Court this week. He notes that most real estate in America is burdened by property taxes and that surplus retention laws impose harsh consequences on homeowners who may already be struggling to pay their bills. Wilkes hopes to persuade the Supreme Court to strike down surplus retention laws in Minnesota, New York, and other states.

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