Lieu Tax Law and Legal Definition

Lieu tax refers to a levy imposed as an alternate for another tax. For example, a lieu tax on private car companies is levied on the property of private car companies in lieu of all other taxes on such property.

In Western Air Lines v. Hughes County, 372 N.W.2d 106, 109 (S.D. 1985), the court held that lieu tax means instead of, or, a substitute for, and it is not an additional tax.