State Regulation and Taxation of Commerce

Question 1

Dormant Commerce Clause

Answer 1

If congress has not enacted legislation in an area of interstate commerce, then the STATES are free to regulate so long as it doesn’t:

1. Discriminate against out of state commerce
2. Unduly burden interstate commerce
3. Regulate extraterritorial activity (wholly beyond its borders)

Question 2

Discriminates against Out of State Commerce

Answer 2

Upheld if the state/local gov can prove

1) Necessary to important state interest
2) there’s no other means avail to achieve purpose

Question 3

Interstate Commerce & State Taxation

Answer 3

States can tax so long as congress hasn’t already acted in the particular area and tax doesn’t discriminate or unduly burden Interstate Commerce.

1. Substantial nexus
2. Fairly apportioned
3. Nondiscrimination
4. Fair relationship to services provided by taxing state.

Applies to “doing business” taxes.

Question 4

Substantial Nexus Test

Answer 4

There must be a substantial nexus between the activity being taxed an the taxing state.

SIGNIFICANT CONTACTS

Question 5

Comity Clause

Answer 5

Tax that discriminates against nonresident individuals

Question 6

Ad Valorem Property Tax

Answer 6

based on value of real or personal property and is assessed at a particular time…generally valid.

State can’t levy these on goods in the course of transit.

Question 7

Sales tax

Answer 7

Fine so long as sale takes place within the state

Question 8

Import/Export Clause

Answer 8

Prohibits states (without consent of congress) from imposing taxes on imports/exports and any commercial activity connected with import/exported goods

Question 9

21st Amendment - Prohibition

Answer 9

Gave states the authority to prohibit the transportation or importation of alcoholic bevs into state for delivery or use within the state.

Subject to Dormant Commerce Clause and equal protections…congress can still exercise control over these transactions