POWER OF STATES TO TAX FOREIGN COMMERCE

Question 1

IMPORT-EXPORT CLAUSE

Answer 1

“No state shall, w/o Consent of Congress, lay any Imposts/Duties on Imports/Exports, except what may be absolutely necessary for executing its inspection Laws .

Question 2

State Taxation of “Imports” Prohibited

Answer 2

• Import-Export Clause prohibits states from imposing any tax on imported goods/commercial activity connected w/ imported goods (i.e., taxes discriminating against imports), except w/ congressional consent

Question 3

State Taxation of “Exports” Prohibited

Answer 3

• Import-Export Clause prohibits states from imposing any tax on goods after they have entered “export stream.”

Question 4

COMMERCE CLAUSE

Answer 4

• Commerce Clause gives Congress exclusive power to regulate foreign commerce & thus inherently limits state’s power to tax that commerce.
• Therefore, a state tax applied to foreign commerce must meet all Commerce Clause tests that apply to state taxation of interstate commerce.
• And even if a state tax meets those tests, tax is invalid if it would (1) create a substantial risk of international multiple taxation or (2) prevent fed gov from “speaking w/ one voice” regarding international trade/foreign affairs issues.