UNITED STATES v. INTERNATIONAL BUSINESS MACHINES CORP.

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Case Basics
Docket No. 
95-591
Petitioner 
United States
Respondent 
International Business Machines Corp.
Advocates
(Argued the cause for the petitioner)
(Argued the cause for the respondent)
Tags
Term:
Facts of the Case 

Pursuant to the Internal Revenue Code, International Business Machines Corporation (IBM) paid a tax on insurance premiums it paid to foreign insurers to insure exports from the U.S. to foreign countries. IBM sought a refund on the tax and filed suit in the Court of Federal Claims when its refund claim was denied by the IRS. IBM contended the tax violated the Export Clause of the U.S. Constitution, which states that "[n]o Tax or Duty shall be laid on Articles exported from any State." The court agreed. The Court of Appeals affirmed.

Question 

May the federal government impose a tax on premiums that U.S. businesses pay foreign insurers for risks that could arise in this country?

Conclusion 
Decision: 6 votes for International Business Machines Corp., 2 vote(s) against
Legal provision: Article 1, Section 9, Paragraph 5: Export Clause

No. In a 6-2 decision, announced by Justice Clarence Thomas, the Court ruled the tax did violate the Export Clause and was therefore unconstitutional.

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UNITED STATES v. INTERNATIONAL BUSINESS MACHINES CORP.. The Oyez Project at IIT Chicago-Kent College of Law. 25 November 2014. <http://www.oyez.org/cases/1990-1999/1995/1995_95_591>.
UNITED STATES v. INTERNATIONAL BUSINESS MACHINES CORP., The Oyez Project at IIT Chicago-Kent College of Law, http://www.oyez.org/cases/1990-1999/1995/1995_95_591 (last visited November 25, 2014).
"UNITED STATES v. INTERNATIONAL BUSINESS MACHINES CORP.," The Oyez Project at IIT Chicago-Kent College of Law, accessed November 25, 2014, http://www.oyez.org/cases/1990-1999/1995/1995_95_591.