Ruling on the constitutionality of state “green taxes” in Zacatecas
Jurisdiction: Supreme Court
Principle law(s): General Law on Climate Change
Side A: Fernando Castañeda Ibarra (Corporation)
Side B: Government of Zacatecas (Government)
Core objectives: Whether a tax on GHG emissions instituted by the State of Zacatecas was unconstitutional.
SummaryOn December 31, 2016, the State of Zacatecas, Mexico published its 2017 Treasury Bill, Expenditure Bill and Revenue Bill. The Treasury Bill established a tax on greenhouse gas emissions (GHG) produced by stationary sources. A corporation dedicated to beer production sued the state legislature, challenging the constitutionality of the Treasury Bill of the State of Zacatecas. Specifically, the corporation argued that the State of Zacatecas was invading the national Congress’s powers by introducing the tax. On October 31, 2017, the Second District Judge in the State of Zacatecas agreed that state authorities could not tax GHG emissions without overstepping on Congress’s power. Particularly, the judge pointed to the fact that the Mexican Constitution reserves imposition of taxes on beers to federal authorities. Thus, it declared the taxes unconstitutional. State authorities appealed the decision to the appellate Collegiate Tribunal, and the Collegiate Tribunal sent the case to the Supreme Court for review.
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