State Regulation and Taxation of Commerce

Question 1

Is the federal government immune from any direct taxation by the states?

Answer 1

YES

Under the supremacy clause, the federal government is immune (i.e., exempt) from any direct taxation by the states—including taxes on its commercial activities.

• As a result, _states may not impose taxes on the federal government, or any of its agencies or instrumentalities, without the express consent of Congress_.
• The federal government, its agencies, and its instrumentalities are immune from direct taxation by the states unless Congress expressly consents*

Question 2

Twenty-first Amendment

Answer 2

The Twenty-first Amendment grants states broad authority to regulate the use of alcohol within their borders.

This authority permits a state to prohibit the importation, transportation, or sale of alcohol within the state and to delegate such authority to local governments (e.g., municipalities).

*The Twenty-first Amendment also repealed the Eighteenth Amendment’s prohibition on the manufacture, transportation, and sale of alcohol in the United States.

Question 3

What authority does the Twenty-first Amendment grant the states?

Answer 3

The Twenty-first Amendment grants states broad authority to regulate alcohol within their borders.

This authority includes the ability to prohibit the importation, transportation, or sale of alcohol within the state and to delegate such authority to local governments (e.g., municipalities).

Question 4

Can a state impose generally applicable taxes that are not directly imposed on the federal government?

Answer 4

YES, so long as they do not unreasonably burden the federal government.

Question 5

Can the state tax the federal government or its instrumentalities?

Answer 5

NO.

Although a state may not tax the federal government or its instrumentalities, there is no similar restriction on the taxation of property owned by a private individual.