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If states don’t have standing, it seems no one does. The case claims that individual citizens do but that it is a tax. If it is a tax, the citizen won’t have a general taxpayer standing (that doesn’t exist according to the Supreme Court) to challenge it. If it is a commerce issue, as it likely is, it is indeed the state that has standing. To simplify this:

Regulation of commerce- state may sue
Tax- no one may sue under this case

President Obama had promised that he would not raise taxes on Americans earning under $250,000. When asked whether the penalty attached to the individual mandate was a tax, President Obama said it was “absolutely not a tax.” He also said “[n]obody considers [it] a tax increase.” Nevertheless, in an attempt to prevent the court from ruling on the constitutionality of the individual mandate, the Obama Justice Department argued that the penalty was in fact a tax. The Justice Department argument failed because the individual mandate provision was written in a way clearly to avoid using the word “tax.”

The language of the bill and the legislative process demonstrated that Congress chose to make the payment for failure to have health insurance a penalty, and not a tax. Early drafts of the bill had referred to the payment to be assessed as a tax. The fact that the word “tax” was dropped from the final version was very significant. Also, elsewhere in the 2,700-page bill, Congress did impose taxes on medical devices, high-cost health insurance policies, high-income taxpayers, and tanning services. The fact that Congress claimed to be acting, not under its taxing power, but pursuant to the Constitution’s Commerce Clause in providing for the penalty was important.

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