Court Rules in Favor of States in Obamacare Tax Lawsuit

Indiana Attorney General Curtis Hill.

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A U.S. District Court has ordered the Internal Revenue Service to pay a total of $839 million to six states, including Indiana, over what Indiana Attorney General Curtis Hill calls an unlawful tax on state Medicaid programs. The Hoosier state will receive $95 million.

The tax in question is related to the Affordable Care Act, or Obamacare. Hill’s office says the federal government threatened to withhold Medicaid funds unless state taxpayers paid a portion of the Health Insurance Providers Fee to help fund Obamacare.

The plaintiffs, which also included the states of Texas, Kansas, Louisiana, Nebraska and Wisconsin, stated while the Affordable Care Act imposed the HIPF on medical providers, the states were exempt from paying it.

"The feds wrongfully took Indiana’s money to fund Obamacare," Hill said in a news release. "Since the federal government cannot tax the states, we are pleased to return this illegally collected money to Hoosiers."

You can view the full ruling from the U.S. District Court for the Northern District of Texas by clicking here.