Supreme Court Declares “Ecotax” Unconstitutional

On July 2, 2024, in the case “Recurso de hecho deducido por la actora en la causa Cantaluppi, Santiago s/ acción de inconstitucionalidad,” the Argentine Supreme Court of Justice analyzed the constitutionality of the Ecotax charge levied by the Municipality of San Carlos de Bariloche on tourists staying overnight in establishments located in the city.

 

The plaintiff, in his capacity as owner of a tourist lodging complex in the city and collection agent of the Ecotax, filed a request for a declaratory judgement to declare the unconstitutionality of the Ecotax. There, he argued, among other reasons, that this tax does not retribute the rendering of any differentiated service for tourists staying overnight in the establishments in Bariloche.

 

The taxable event of the Ecotax established in article 363 of fiscal ordinance 2374 CM 12 was “the consideration that the Municipality demands from tourists who spend the night in this city, whatever the type and category of the tourist lodging establishment, for the tourist services and tourist infrastructure, direct and indirect, and those potential ones that the Municipality provides in concept of patrimonial conservation, improvement and protection of tourist sites and promenades, including entrances and portals to the city, trails, accesses to lakes and their beaches, rivers and mountains, panoramic points, viewpoints, tourist information and assistance services, public restrooms, and all other tourist services, guaranteeing sustainable tourism from the social, environmental and economic point of view.”

 

The Superior Court of Justice of the Province of Río Negro rejected the action filed by the plaintiff and other owners and representatives of several hotel establishments in Bariloche.  The Court held that this tax was the consideration charged to tourists staying overnight in the city for the infrastructure services the Municipality provides, and that the challenged regulations were issued in accordance with the taxation competences and powers granted by the National Constitution.

 

The Superior Court also highlighted that the services provided to tourists were included in the regulation in a non-exhaustive manner, and that it had been created for the purpose of environmental control to mitigate the pollution generated by tourism.

 

The plaintiff filed a Federal Extraordinary Appeal which, when denied by the Superior Court, gave rise to the claim filed before the Argentine Supreme Court.

 

The Attorney General for Tax Matters considered that it was appropriate to revoke the appealed judgment, considering that the Ecotax did not meet the requirements of a valid fee, since it did not retribute the provision of any differentiated service for the tourist obliged to pay it, and that the works carried out by the municipality benefited the whole community and not only the tourists who stayed overnight.

The Argentine Suprema Court, citing the opinion of the Attorney General of the Nation, remarked that the difference between fees and taxes is determined by the existence or not of the development of a state activity that concerns the obligor.

 

The Court, notwithstanding the above, understood that the description of the taxable event does not clearly specify “what are the concrete, effective, and individualized services referred to a good or act” of the taxpayer.

 

The Supreme Court also emphasized the unreasonableness of the regulation, based on the fact that the services intended to be compensated by the mentioned fee benefit the community as a whole and not only the tourists who stay overnight in Bariloche's establishments. This could cause a manifest iniquity.

 

Finally, it was held that the municipality neither alleged nor proved “the development of an activity or the rendering of a service aimed at conserving, preserving, or repairing the environment.” For these reasons, in view of the illegitimacy of the collection of the Ecotax fee, it was decided to revoke the appealed judgment.