Is the ACA's "Shared Responsibility Payment" a "Tax . . . Measured by Income"?

The Affordable Care Act's individual mandate penalty meets the bankcuptcy code.

If you thought the courts were done figuring out whether the financial penalty imposed under the Affordable Care Act on those who failed to obtain qualifying health insurance was a tax or a penalty, you were mistaken. Today, the U.S. Court of Appeals for the Sixth Circuit revisted that question for purposes of the federal bankruptcy code.

Chief Judge Sutton summarized the issue in In re: Juntoff as follows:

In passing the Affordable Care Act, Congress created a "Shared Responsibility Payment" for individuals who did not purchase qualifying individual health insurance plans. Congress eventually eliminated the Payment. That development did not end debates over whether the Payment is a tax or a penalty. At issue today is whether the Payment amounts to a "tax . . . measured by income" under the Bankruptcy Code's provisions for prioritizing the payment of some debts over others. We join the Third and Fourth Circuits in concluding that it is.