Regulation of Commerce

Question 1

Who holds the exclusive power to regulate foreign commerce?

Answer 1

Congress

Question 2

What is the effect of Congress regulating interstate commerce in an area where state laws conflict with the federal law?

Answer 2

the state laws are superseded by Congress’s action.

Question 3

What is the effect of Congress regulating interstate commerce in an area where state laws do NOT conflict with federal law?

Answer 3

the state laws may nonetheless be preempted if they are in the same field of policy as the federal laws.

Question 4

Can Congress allow the states to effectuate policies that would otherwise violate the commerce clause?

Answer 4

yes

Question 5

When can state or local governments enact laws regulating interstate commerce without violating the commerce clause?

Answer 5

where Congress has not yet legislated in that area, local or state governments can enact laws regulating interstate commerce SO LONG AS these laws do not discriminate against or unduly burden interstate commerce.

Question 6

When might a discriminatory state or local law be valid?

Answer 6

where the law furthers an important, noneconomic state interest and there is no reasonable nondiscriminatory alternative available.

Question 7

A state may prefer its own citizens when it acts _________________.

Answer 7

as a market participant.

Question 8

A nondiscriminatory state law which burdens interstate commerce will be upheld unless . . .

Answer 8

the burden on interstate commerce outweighs the promotion of a legitimate local interest.

Question 9

Can Congress take away states’ power to tax interstate commerce?

Answer 9

Yes. Congress has complete power to authorize or forbid state taxation that affects interstate commerce.

Question 10

State taxes that discriminate against interstate commerce violate the commerce clause unless . . .

Answer 10

authorized by Congress.

Question 11

What must be shown in order to hold a nondiscriminatory state tax as valid?

Answer 11

A nondiscriminatory tax will be valid if 1) the tax affects an activity with a substantial nexus to the taxing state; 2) the tax is fairly apportioned; and 3) there is a fair relationship between the tax and the services or benefits provided by the state.

Question 12

Use Tax

Answer 12

tax imposed on goods purchased outside the state but used within it.

Question 13

A state can require an interstate seller to collect use taxes from buyers if . . .

Answer 13

there is a sufficient nexus between the seller and the taxing state.

Question 14

Is merely soliciting orders and shipping goods into a state a sufficient nexus to require an interstate seller to collect a use tax?

Answer 14

No. There must be a more concrete relationship between the interstate seller and the taxing state.

Question 15

Ad valorem Tax

Answer 15

a property tax calculated using the value of the property.

Question 16

What kind of commodities are exempt from state taxation?

Answer 16

commodities in interstate transit.

Question 17

When does interstate transportation begin for purposes of assessing property taxes on commodities in interstate commerce?

Answer 17

interstate transit begins when 1) the cargo is delivered to an interstate carrier; or 2) when it actually begins its journey.

Question 18

When does a break in the continuity of transit subject to commodities to taxation?

Answer 18

where the break was intended to end or suspend the shipment.

Question 19

When does interstate transit end for purposes of ad valorem taxes on commodities?

Answer 19

interstate transit ends when the cargo reaches its destination.

Question 20

When is an ad valorem tax on the instrumentalities of interstate commerce valid?

Answer 20

To be valid, an ad valorem tax on instrumentalities of interstate commerce must 1) have a taxable situs in the taxing state; and 2) the value must be properly apportioned according to the amount of the contacts with each taxing state.

Question 21

Taxable Situs

Answer 21

where an instrumentality receives benefits or protections from the state.

Question 22

Dormant Commerce Clause

Answer 22

if Congress has not enacted laws regarding a subject, a state or local government may regulate local aspects of interstate commerce if the regulation 1) does not discriminate against out of state competition to benefit local economic interests; and 2) is not unduly burdensome.

Question 23

Under the dormant commerce clause, state or local regulations that discriminate against interstate commerce to protect local economic interests are almost always . . .

Answer 23

invalid