157. Municipal Packaging Taxes Ruled Unconstitutional

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In May of 1998, the Federal Constitutional Court handed down a fundamental decision on the permissibility of using the tax laws to achieve ecological objectives. The decision, dated 7 May 1998, was too lengthy for publication in many tax journals. See the condensed summary by Kluth in DStR 1998, 892.

The court voided certain municipal taxes imposed on throw-away packaging for carry-out food. Various German cities had legislated such taxes in an ostensible effort to reduce the volume of waste of which they had to dispose. The long and complex decision rests on considerations of Federal pre-emption in this particular area. The decision does not hold the use of taxes to achieve non-fiscal objectives to be improper per se.