Court Declares Municipal Fee Invalid

Municipal taxing power is subject to legal, conventional, and constitutional limits and conditions, within the framework tax federalism. Among them, article 192, section 2 of the Constitution of the Province of Buenos Aires provides that: “Any increase or creation of taxes or contributions requires approval by an absolute majority of votes of an assembly composed of the members of the Deliberative Council and an equal number of major municipal taxpayers.”

In the ruling “Panebianco Juan Pablo y Otro/a c/ Municipalidad de Azul s/ Pretension Declarativa de Certeza – Otros Juicios,” dated November 27, 2025, the Mar del Plata Court of Appeals in Administrative Matters that the Essential Services Fee the Municipality of Azul levies is invalid. To decide so, the Court held that, to approve the fee, it was not sufficient to reach an absolute majority among the members present, but rather that an aggravated majority was required, based on the total number of members of the council, distinguishing between the concepts of quorum and the majority required for approval.

The fee at issue had been approved with 17 affirmative votes in the City Council and Major Taxpayers of the Municipality of Azul, and therefore the absolute majority required by article 192, section 2 of the provincial constitution was not reached (considering that the total members of the Council were 36). Despite this, the new tax began to be levied.

The Court held that the approval of the tax was invalid because it had been enacted without the constitutional majority required to create or increase municipal taxes. In this regard, the Court stated that, through this majority, the constituent sought “to raise the level of consensus required to adopt decisions that involve the exercise of local taxing power and may affect property rights, preventing the creation or increase of taxes from being left to circumstantial majorities resulting from absences or fluctuations in attendance.”

The Court’s decision includes three fundamental conclusions:

1.    The creation and increase of taxes are subject to various requirements that must be complied with for their validity, among which is approval by a City Council and Major Taxpayers.
2.    To approve a creation or increase, it is not sufficient to reach quorum and an absolute majority of the members present, but rather that this majority is qualified and calculated on the basis of the total number of members of the Council.

3.    The procedures for creating taxes established by constitutional rules are not an empty formalism and their observance is conditio sine qua non for their enforceability.

Likewise, the decision shows the importance there being real participation by major taxpayers in the corresponding Council to exercise constitutional oversight regarding the increase and creation of taxes.