The Oyez Project: Economic Activity Issues - State Tax

Alaska v. American Can Co.

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Alaska v. Arctic Maid

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Allegheny Pittsburgh Coal v. Webster County

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Allied Stores Of Ohio v. Bowers

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Allied-Signal, Inc., As Successor-In-Interest To Bendix Corp. v. Director, Division Of Taxation

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Amerada Hess Corp. v. N. J. Taxation Di

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American Bank & Trust Co. v. Dallas County

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American Motors Corp. v. Kenosha

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American Oil Co. v. Neill

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American Trucking Associations, Inc. v. Scheiner

One of the types of fees that Pennsylvania used to finance the cost of its highway maintenance was lump-sum annual fees, also known as flat taxes. In 1980, Pennsylvania increased the fee for an identification marker required of every truck over a certain weight from $2 to $25, but exempted trucks registered in Pennsylvania from the fee _ the marker fee was "deemed" to be included in the registration fee that local truckers had to pay. In 1982, the marker tax was reduced to $5, but a new tax was introduced, taxing trucks by the axle. The axle tax applied to all trucks weighing more than 26,000 pounds, but the registration fee for Pennsylvania trucks was reduced in an amount calculated to offset that new tax for most trucks. These flat taxes were contested in two state court cases on the ground, inter alia, that they violated the Commerce Clause of the Federal Constitution. Since Pennsylvania-based trucks travel, on average, about five times as many miles in Pennsylvania as out-of-state trucks, the cost of the flat taxes was approximately five times as high per mile of road use for out-of-state vehicles as for local vehicles. For that reason, the lower courts in Pennsylvania found that both the marker tax and the axle tax violated the Commerce Clause. The Supreme Court of Pennsylvania considered both cases together and reversed.

American Trucking Associations v. Smith

In 1983, the American Trucking Associations, Inc. (ATA) challenged the flat tax portion of Arkansas' Highway Use Equalization (HUE) tax, alleging that it violated the Commerce Clause. The Arkansas Supreme Court, relying on Supreme Court precedent, rejected this claim. Subsequently, on June 23, 1987, the Supreme Court decided American Trucking Ass'ns., Inc. v. Scheiner, 483 U.S. 266 (1987), which held that state application of flat highway use taxes was unconstitutional. Pending re-hearing in the Arkansas Supreme Court, Justice Blackmun ordered, in August 1987, that all new taxes collected be kept in escrow. Subsequently, the Arkansas Supreme Court held that HUE was unconstitutional, but that Scheiner did not apply retroactively. The court went on to decide that taxes already collected for the tax year beginning July 1, 1987, could remain in the state treasury, but that those funds placed in the escrow account ordered by Justice Blackmun should be refunded, as they had not been spent or budgeted for future spending.

Arizona Public Service Co. v. Snead

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Arkansas Writers' Project, Inc. v. Ragland

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Armco Inc. v. Hardesty

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Asarco Inc. v. Idaho State Tax Comm'n

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Associated Industries of Missouri v. Lohman

Following Missouri's imposition of a 1.5% statewide "use tax," the Associated Industries of Missouri - representing Missouri businesses that had to collect the tax and a manufacturing firm that had to pay it - filed suit alleging that the tax violated the Commerce Clause by discriminating against interstate commerce. Such discrimination was said to result from the fact that the use tax exceeded many in-state localities' sales tax rate.

Austin v. New Hampshire

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Bacchus Imports Ltd. v. Dias

The Hawaii Liquor Tax, enacted in 1939, imposed a twenty percent excise tax on wholesale liquor sales. Certain locally produced alcohol products, such as okolehao brandy and fruit wine, were exempt from the tax. Bacchus Imports, a liquor wholesaler, challenged the law's validity and sought a refund of $45 million from the state of Hawaii.

Barclays Bank Plc v. Franchise Tax Board Of California

California used a "worldwide combined reporting" method to determine tax liability for multinational corporations operating inside the state. Under this method, the multinational's income was taxed in proportion to the average percentage of worldwide payroll, property, and sales located inside the state. Barclays Bank of California (Barcal) was wholly owned by a multinational corporation, Barclays Bank International Limited (BBI). Barcal did not include financial data for BBI in its 1977 tax filings. The California Franchise Tax Board (Tax Board) determined that Barcal misrepresented the proportion of income subject to taxation, causing a tax deficiency of over one hundred thousand dollars. Barcal and BBI paid, but then sued for the amount paid, complaining that the cost to provide BBI's worldwide financial data was disproportionately large considering that Barcal operated largely independently of BBI and BBI operated largely outside of California. Barcal and BBI contended that this violated the Commerce Clause-derived anti-discrimination requirement, which prevents States from imposing disproportionately large tax compliance burdens upon corporations. The Tax Board allowed BBI to make a "reasonable approximation" of financial data to minimize costs, but BBI claimed that this action violated Due Process by admitting financial data that was possibly inaccurate.

The California Supreme Court found no constitutional violation and remanded the case to a California Court of Appeals, which also did not find the burden disproportionate. Barcal and BBI also contended that the "worldwide combined reporting" method risked double taxation by the state and the federal government. Additionally, The "worldwide combined reporting" method deviated from taxing methods employed by other states, thus transgressing the federal government's interest in providing uniform standards for taxing foreign commerce. (The case was consolidated with Colgate Palmolive Co. v. Franchise Tax Board Of California.)

Boston Stock Exchange v. State Tax Comm'n

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Braniff Airways v. Nebraska Board

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Burlington No. R. Co. v. Okla. Tax Comm'n

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Camps Newfound/Owatonna v. Harrison

Camps Newfound/Owatonna Inc. (Camps) operates a children's church camp in Maine and finances its operations through a $400 per camper weekly tuition charge. The majority of its campers are out of state children. Maine's tax scheme exempts charitable institutions incorporated in the state, and provides a more limited tax benefit for institutions which principally benefit non-Maine residents so long as their weekly service charge does not exceed $30 per person. Ineligible for any exemptions, Camps challenged the constitutionality of Maine's tax exemption statute. The U.S. Supreme Court granted certiorari following a reversal of a favorable Superior Court ruling by the Supreme Court of Maine.

Central R. Co. v. Pennsylvania

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Chemical Waste Management, Inc. v. Hunt, Governor Of Alabama

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City Of Detroit v. Murray Corp.

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Colonial Pipeline Co. v. Traigle

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Commonwealth Edison Co. v. Montana

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Complete Auto Transit Inc. v. Brady

Complete Auto Transit was a Michigan corporation doing business in Mississippi. Complete shipped cars into the state where they were distributed for sale. Mississippi imposed a tax on transportation companies for the "privilege of doing business" in the state. The tax was applied equally to businesses involved in intra- and interstate commerce.

Container Corp. v. Franchise Tax Bd.

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Cory v. Western Oil & Gas Assn.

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D. H. Holmes Co. v. Mcnamara

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Department Of Revenue Of Oregon v. Acf Industries, Inc.

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Dunbar-Stanley Studios v. Alabama

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Evansville Airport v. Delta Airlines

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Evco v. Jones

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Exxon Corp. v. Eagerton

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Exxon Corp. v. Wisconsin Dept. Of Revenue

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F. W. Woolworth Co. v. Taxation & Revenue Dept.

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First Federal S. & L. v. Massachusetts Tax Comm'n

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First National Bank v. Bartow Cty. Tax Assessors

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Ford Motor Credit Co. v. Department Of Revenue, Florida

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Fulton Corporation v. Faulkner

After North Carolina levied an "intangibles tax" on a fraction of the value of corporate stock owned by state residents inversely proportional to the corporation's exposure to the State's income tax, the Fulton Corporation, a North Carolina company, filed a state-court action against the State Secretary of Revenue, seeking judgment that the tax violated the Federal Commerce Clause by discriminating against interstate commerce. The trial court ruled for the Secretary, but North Carolina's Court of Appeals reversed, holding that the taxable percentage deduction violated the Commerce Clause. In reversing, the North Carolina Supreme Court found that the State's scheme imposed a valid compensatory tax and that the intangibles tax imposed less of a burden on interstate commerce than the corporate income tax placed on intrastate commerce.

Gen. Motors v. District Of Columbia

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General Motors Corp. v. Tracy

The State of Ohio imposes general sales and use taxes on natural gas purchases from all sellers, whether in-state or out-of-state, that do not meet its statutory definition of a "natural gas company." Ohio's state-regulated natural gas utilities, known as local distribution companies or LDC's, satisfy the definition. Other producers and independent marketers, according to the State Supreme Court, generally do not. During the period in question, General Motors Corporation (GMC) bought virtually all the gas for its plants from out-of-state independent marketers, rather than from LDC's, making it subject to the Ohio tax. In front of the State Supreme Court, GMC argued that denying a tax exemption to sales by marketers but not LDC's violates the Commerce and Equal Protection Clauses. After an initial conclusion, the court held that GMC lacked standing to bring a Commerce Clause challenge. The court then dismissed the equal protection claim as buried in GMC's Commerce Clause argument.

General Motors v. Washington

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Goldberg v. Sweet

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Gurley v. Rhoden

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Halliburton Oil Well Co. v. Reily

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Heublein, Inc. v. South Carolina Tax Comm'n

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Hunt-Wesson, Inc. v. Franchise Tax Board of California

California's "unitary business" income-calculation system for determining the State's taxable share of a multistate corporation's business income authorizes a deduction for interest expense. The system, however, permits use of that deduction only to the extent that the amount exceeds certain out-of-state income arising from the unrelated business activity of a discrete business enterprise. Hunt-Wesson, Inc. is a successor in interest to a nondomiciliary corporation that incurred interest expense. California disallowed a deduction for the expense insofar as it had received nonunitary dividend and interest income. Hunt-Wesson challenged the validity of the disallowance. The California Court of Appeal found the disallowance constitutional. The California Supreme Court denied review.

Int. Harvester Corp. v. Goodrich

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Itel Containers International Corp. v. Huddleston, Commissioner Of Revenue Of Tennessee

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Japan Line, Ltd. v. County Of Los Angeles

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Jefferson County v. Acker

Two U.S. District Judges, William M. Acker, Jr., and U. W. Clemon, who maintain their principal offices in Jefferson County, Alabama, resisted payment of a state-approved, county-authorized occupational tax on the ground that it violates the intergovernmental tax immunity doctrine. The county instituted collection suits in Alabama small claims court against the judges, who removed the suits to the Federal District Court under the federal officer removal statute. The federal court denied the county's motions to remand and granted summary judgment for the judges, holding the county tax unconstitutional under the intergovernmental tax immunity doctrine to the extent that it reached federal judges' compensation. The en banc Court of Appeals affirmed. The U.S. Supreme Court granted Jefferson County's initial petition for certiorari and remanded for further consideration of whether the Tax Injunction Act deprived the District Court of jurisdiction to adjudicate the matter. On remand, the Court of Appeals adhered to its prior en banc decision. Certiorari was granted again to consider whether the removal from state court to federal court was unauthorized by the federal officer removal statute, the Tax Injunction Act issue, and the merits of the case.

Kern-Limerick, Inc. v. Scurlock

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Kosydar v. National Cash Register Co.

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Kraft General Foods, Inc. v. Iowa Department Of Revenue And Finance

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Laurens F. S. & L. v. S. C. Tax Comm'n

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Lehnhausen v. Lake Shore Auto Parts Co.

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Limbach v. Hooven & Allison Co.

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Lunding v. New York Tax Appeals Tribunal

New York Tax Law section 631(b)(6) denies only nonresident taxpayers a state income tax deduction for alimony paid. In 1990, Christopher Lunding and his wife, residents of Connecticut, were required to pay higher taxes on their New York income when the State denied their attempted deduction of a pro rata portion of the alimony Lunding paid a previous spouse. Lunding commenced suit, asserting that section 631(b)(6) discriminates against New York nonresidents in violation of the Privileges and Immunities, Equal Protection, and Commerce Clauses of the Federal Constitution. Ultimately, the New York Court of Appeals held that section 631(b)(6) was adequately justified because New York residents who are subject to taxation on all of their income regardless of source should be entitled to the benefit of full deduction of expenses, while personal expenses of a nonresident taxpayer are more appropriately allocated to the State of residence.

Maryland v. Louisiana

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McKesson Corp. v. Florida Alcohol & Tobacco Division

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Memphis Bank & Trust Co. v. Garner

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Metropolitan Life Ins. Co. v. Ward

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Michelin Tire Corporation v. Wages

The Michelin Tire Corporation (MTC) operated a warehouse in Gwinnett County, Georgia, in which products imported from France and Nova Scotia were stored for later distribution. The County levied a nondiscriminatory ad valorem property tax on the goods (a percent of the property's value). MTC claimed that the contents of the warehouse were constitutionally free from state taxation because they were in their original containers. The county declared that the products were subject to the tax because they had been sorted and arranged for sale.

Minn. Star & Trib. Co. v. MN Comm. of Rev.

From 1967 to 1971, the Minneapolis Star and Tribune Company, a publisher of a morning and evening newspaper in Minneapolis, was exempt from a state sales and use tax provided periodic publications. In 1971, the Minnesota legislature imposed a "use tax" on the cost of paper and ink products consumed in publishing. In 1974, the legislature exempted the first $100,000 worth of ink and paper consumed a year. After the enactment of this exemption, the Star Tribune found itself paying roughly two-thirds of the total revenue raised by the tax.

Missouri Director of Revenue v. CoBank ACB

The Farm Credit Act of 1933 created various lending institutions, including banks for cooperatives, which are designated as federally chartered instrumentalities of the United States. CoBank ACB is the successor to all rights and obligations of the National Bank for Cooperatives. In 1996, CoBank filed amended returns on behalf of that bank, requesting an exemption from all Missouri corporate income taxes and refunds on the taxes it paid for 1991 through 1994. CoBank asserted that the Supremacy Clause accords federal instrumentalities immunity from state taxation unless Congress has expressly waived this immunity, which the Act did not expressly do. The state of Missouri denied the request, but the State Supreme Court reversed, stating that because the Act's current version is silent as to the banks' tax immunity, Congress cannot be said to have expressly consented to state income taxation and, thus, the banks are exempt.

Mobil Oil Corp. v. Commissioner Of Taxes

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Montana v. United States

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Moorman Mfg. Co. v. Bair

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Moses Lake Homes v. Grant County

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National Bellas Hess, Inc. v. Department Of Revenue Of State Of

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National Geographic v. Cal. Equalization Bd.

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New Energy Company of Indiana v. Limbach

An Indiana law gave a tax credit against the Ohio motor vehicle fuel sales tax for each gallon of ethanol sold by fuel dealers, provided that the ethanol was produced in Ohio or in a state that grants similar tax advantages as the Ohio scheme.

Newsweek, Inc. v. Florida Dep't of Revenue

In 1988, a Florida statutory provision exempted newspapers, but not magazines, from sales tax. In 1990, the Florida Supreme Court found the classification invalid under the First Amendment. Subsequently, Newsweek, a magazine, filed a claim for a refund of the sales tax that it had paid between 1988 and 1990. The Florida Department of Revenue denied the refund. Newsweek then filed suit alleging that Florida's failure to accord the magazine retroactive relief was a violation of due process. Ultimately, the District Court of Appeal of Florida, First District, concluded Newsweek was afforded due process because Florida law permits prepayment tax challenges by filing an action and paying the contested amount into the court registry, posting a bond, or obtaining a court order approving an alternative arrangement, without suffering onerous penalties.

Nordlinger v. Hahn

In a statewide ballot, California residents approved the addition of Article XIIIA to their State Constitution. Article XIIIA's "acquisition value" provision limited property assessment value increases to two percent, if caused by changes in ownership or new construction improvements. Article XIIIA exempted two types of transfers from this reassessment limit: first, if the principal seller is 55 or older and moved to a home of equal or lower value, and second, when a transfer occurred between parents and children. One of Article XIIIA's effects is that over time the taxes of new property owners, adjusted to reflect recent values, would be substantially higher than long-term property owner's taxes. A new property owner filed suit to challenge the state constitutional amendment.

Norfolk & W. R. Co. v. Tax Comm'n.

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Northwestern Cement Co. v. Minn.

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Offutt Housing Co. v. Sarpy County

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Oklahoma Tax Commission v. Jefferson Lines, Inc.

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Oregon Waste Systems, Inc. v. Department Of Environmental Quality Of The State Of Oregon

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Pittsburgh v. Alco Parking Corp.

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Private Truck Council Of America, Inc. v. Quinn

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Quill Corp. v. North Dakota, By And Through Its Tax Commissioner, Heitkamp

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R. J. Reynolds Tobacco Co. v. Durham County

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Railway Express Agency v. Virginia

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Reich v. Collins, Revenue Commissioner Of Georgia

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Reserve Life Insurance Co. v. Bowers

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Rockford Life Ins. Co. v. Ill. Dept. Of Re

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Scripto v. Carson

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Society For Savings v. Bowers

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South Central Bell Telephone v. Alabama

Alabama requires each corporation doing business in that state to pay a franchise tax based on the firm's capital. A domestic firm, organized under the laws of Alabama, has leeway in controlling its own tax base and tax liability. A foreign firm, organized under the laws of a State other than Alabama, does not have similar leeway to control its tax base. In 1986, the Reynolds Metals Company and other foreign corporations sued Alabama's tax authorities, seeking a refund of the foreign franchise tax they had paid on the ground that the tax discriminated against foreign corporations in violation of the Commerce and Equal Protection Clauses. The Alabama Supreme Court rejected Reynolds' claims, holding that the special burden imposed on foreign corporations simply offset a different burden imposed exclusively on domestic corporations by Alabama's domestic shares tax. During the Reynolds case, the South Central Bell Telephone Company and others brought a suit asserting similar Commerce and Equal Protection Clause claims. The Alabama trial court agreed with South Central Bell that the tax substantially discriminated against foreign corporations, but nonetheless dismissed their claims as barred by res judicata in light of the State Supreme Court's Reynolds decision. The Alabama Supreme Court affirmed.

Standard Steel Co. v. Wash. Revenue Dept.

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State Bd. Of Ins. v. Todd Shipyards

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Thomas v. Virginia

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Trinova Corp. v. Michigan Dept. Of Treasury

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Tyler Pipe Industries v. Dept. Of Revenue

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U.S. v. Township Of Muskegon

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United Air Lines v. Mahin

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United States v. City Of Detroit

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United States v. New Mexico

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Utah Tax Comm'n v. Pacific Pipe Co.

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Washington Rev. Dept. v. Stevedoring Assn.

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Washington v. United States

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Werner Co. v. Director Of Taxation

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West Point Grocery Co. v. Opelika

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Western & Southern L. I. Co. v. Bd. Of Equalization

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Western Air Lines v. Board Of Equalization

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Whyy v. Glassboro

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Williams v. Vermont

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Wisconsin Department Of Revenue v. William Wrigley, Jr., Co.

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Xerox Corp. v. County Of Harris

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Youngstown Co. v. Bowers

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