Matt Boch Comments on Sovereign Immunity in Arkansas Tax Case

This week the Arkansas Supreme Court heard oral arguments in the case, Larry Walther, Director of the Department of Finance and Administration v. Flis Enterprises Inc., and days before the arguing its case, the Department of Finance and Administration reluctantly appeared to assert sovereign immunity in a supplemental brief. Doing so could significantly limit taxpayers’ procedural rights.

However, during oral arguments on February 8, the DFA’s counsel refused to say that it was asserting sovereign immunity but rather was only raising the question of whether it was a jurisdictional issue. The justices seemed reluctant to assert sovereign immunity as a jurisdictional bar on their own sua sponte.

Matt Boch provided comment to Tax Analysts and explained the importance of the case to both taxpayers and the broader Arkansas legal community.

“There is widespread concern because there are many different aspects to suing the state, and there was so much that the Andrews decision left unanswered,” Boch said on February 7.

He was concerned the court would treat sovereign immunity as an absolute bar to taxpayer refund suits, and he was relieved after attending oral arguments.

“You never know how the court is going to rule based on the questions it's asking,” Boch said on February 8. “But at least in terms of questions, they seem reluctant to treat it as a jurisdictional issue.”

Boch understood why the DFA raised the sovereign immunity claim. 

“A lot of it was designed to get some clarification from the justices, to make sure this is not subject-matter jurisdiction, [but] the justices didn’t take the bait,” he said.


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