Uniform Zoning Regulations
The plaintiffs of auto amortization schedule argued that the ordinances violated 462.357 subd. 1 which provides that zoning regulations be uniform for each class. The plaintiffs reasoned that adult businesses are in the class of commercial business, and yet, the ordinance requires only adult businesses to operate in industrial zones. The appellate court rejected this argument, noting the U.S. Supreme Court's holding in City of Renton v. Playtime Theatres, Inc. that adult businesses are different from other commercial uses and can constitutionally be subjected to neutral time, place and manner regulations.
Finally, the appellate court considered whether the ordinances were constitutional. Ordinances that restrain speech may be constitutional if they are content neutral to time, place and manner restrictions designed to further a substantial government interest and do not unreasonably limit alternative avenues of communication. The plaintiffs maintained that the ordinances were unconstitutionally overbroad and not supported by objective evidence of secondary effects. Further, the plaintiffs disputed that the sites for adult-use businesses under the ordinance were legally available because of their commercially unattractive locale.
In this case, the appellate court noted that the city council had enacted the adult-use ordinances explicitly to address concerns about secondary effects, such as high-risk sexual activity, health code violations, and the impact of cruising and sexual solicitations on neighboring businesses. Precise empirical studies were not required, and the city council reasonably relied on the attorney general's report, complaints by citizens at public hearings, and the experiences of other municipalities. The appellate court found that the enactments thus conformed to the Supreme Court's City of Renton decision.
The First Amendment, the appellate court continued, requires only that local governments not deny the reasonable opportunity to operate adult entertainment establishments. It does not mandate that available locations be optimal or even commercially viable. The appellate court further found that the ordinances placed reasonable location restrictions on adult entertainment businesses. The appellate court thus vacated the amortization ordinance and affirmed the constitutionality of the adult-use ordinance.
Prior to the Revenue Reconciliation Act of 1989, any purchaser of a term interest could amortize the cost of his interest over his life expectancy or the term of years of the interest on a straight-line basis. However, an individual who divided an existing property and kept a term interest could not amortize the retained interest. Example 1: A and B are unrelated individuals who purchase a $ 100,000 security. A purchases a 10-year interest in the security for $ 60,000 and B contributes $ 40,000 for the remainder interest.
A may offset his income from the security by $ 6,000 of amortization of cost each year. After the term interest has expired, B succeeds to the property with a basis of $ 40,000; this amount may not be amortized but is B's basis for purposes of computing gain or loss on disposition. If A dies during his term leaving unamortized basis, the remaining unamortized basis is lost.
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