Supreme Court Once Again Sets Limits on Municipal Fees

On September 10, 2026, the Argentine Supreme Court issued two significant rulings in “Banco de Galicia y Buenos Aires S.A. c/ Municipalidad de Córdoba s/ plena jurisdicción - recurso de casación” and “Mutual de Ayuda entre Ferroviarios Activos y Jubilados de la Fraternidad Sección Pergamino FC Mitre c/ Municipalidad de Pergamino s/ pretensión declarativa de certeza.” In both, the Court examined the validity of municipal claims over the taxes for safety, security, and sanitary inspections of stores, offices, and other establishments and concluded that the decisions of the provincial high courts departed from the constitutional requirements that its case law demands for the validity of municipal fees.

In “Banco de Galicia,” the Supreme Court held that the tax provision defining the taxable event used an excessively broad formula, describing the taxable activity in residual and catch-all terms. Thus, instead of identifying the services whose effective provision justified the collection of the fee, the provision operated, as in “Gasnor S.A. c/ Municipalidad de La Banda,” as a mere vehicle for taxing activities carried out by taxpayers to whom the municipality provided no service at all. The Court also reiterated that the municipality bears the burden of proving the effective provision of the service and rejected the approach that shifted this burden to the taxpayer, finding that such a criterion blurs the constitutional requirements applicable to fees and effectively equates them to a tax.

In “Mutual de Ayuda,” the Supreme Court made two particularly relevant points. First, it reaffirmed that the periodic provision of the service is an essential feature of a municipal fee, as it ensures that the services are actually rendered and that the fee does not become a tax. Second, the Court emphasized that the validity of the amount charged depends on two concurrent requirements: one general and one specific. The general requirement is that the total amount collected must not unreasonably exceed the cost of the service being financed, since any excess would distort the nature of the fee and turn it into a tax. The specific requirement relates to the limited application of tax capacity to municipal fees. According to the Supreme Court, the tax capacity may only be considered to allocate the total cost of the public service among taxpayers, but it cannot justify imposing exorbitant or disproportionate burdens on certain taxpayers in relation to the cost of the service they receive. Otherwise, the fee loses its connection with the public service on which it is based and becomes, in substance, a tax.

On these grounds, the Court rejected the position that judicial review is available only in cases of confiscatory charges and confirmed that there must be a reasonable relationship between the amount demanded and the cost of the service involved.

Both rulings reinforce the Supreme Court’s case law on municipal fees and reaffirm clear limits on municipal taxing power.