State Regulation and Taxation of Commerce

Question 1

What are Ad Valorem property taxes?

Answer 1

Value-based property taxes.

Levied on personal property.

• Commodities - goods that move from state to state. Pay tax to every state where the goods are stop for business purpose. Exception: passing through.
• Instrumentalities: transportation equipment. Fair apportionment among states with substantial nexus.

Question 2

What is dormant commerce clause?

Answer 2

Protects out of state businesses.

In absence of federal regulation, state regulation of commerce is valid if

1. there is no discrimination against out of state interests. Exception: state as market participant, subsidies of federal approval.
2. The regulation does not unduly burden interstate commerce (outrageously costly)
3. The regulation does not apply to wholly extraterritorial activity.

Question 3

For state taxation of interstate commerce, what happens if it discriminatory?

Answer 3

Will be struck down unless Congress consents.

Question 4

When is state non-discriminatory taxation allowed?

Answer 4

Not unduly burdensome.

Substantial nexus between the taxing of state and the property or activity taxed.

Must be a fair apportionment of tax liability among states.

Question 5

Does Article IV Privileges and Immunities Clause or Privileges or Immunities of 14th apply to corporations?

Answer 5

No.