State Regulation & Taxation of Commerce Flashcards
The requirements for a “doing business” tax do not include:
that the tax be a flat tax
If a state imposes a nondiscriminatory tax on interstate commerce:
It may nevertheless violate the Commerce Clause
The power to regulate interstate commerce is a federal power, BUT states may regulate interstate commerce subject to
the negative implications of the Commerce Clause.
Who has the power to tax interstate commerce?
The federal government holds most of the power, but the states may tax local aspects
Under the Commerce Clause, ad valorem property taxes must be
fairly apportioned.
The Twenty-First Amendment allows states to:
Prohibit all sellers from making direct shipments of liquor to customers within the state
Under the Commerce Clause, a state regulation that makes it difficult for out-of-state purchasers to access privately owned in-state products is:
likely to be held invalid.
Under the Commerce Clause __________.
congress can adopt laws discriminating against interstate commerce and so can states if authorized by federal law
If Congress has not enacted laws with regard to a specific area of interstate commerce, a state may regulate a local aspect of this interstate commerce:
When the state’s regulation does not discriminate against out-of-state competition and the regulation does not unduly burden interstate commerce
When apportioning a state ad valorem property tax on instrumentalities used to transport goods in interstate commerce, the state may:
Impose an ad valorem property tax on instrumentalities of interstate commerce even if a taxpayer can prove double taxation
In assessing whether a nondiscriminatory state tax on interstate commerce is valid absent any federal legislation in the area, courts will typically consider:
Whether there is a substantial nexus between the taxpayer and the state; whether the tax is fairly apportioned; and whether there is a fair relationship between the tax and the services or benefits provided by the state
Can a law that discriminates against interstate commerce be valid under the Commerce Clause?
Yes, Congress can pass laws that discriminate against interstate commerce, and the states can too if authorized by federal law
Ad valorem property taxes are taxes based on
a percentage of the assessed value of the property in question.
A state may impose an ad valorem property tax on goods shipped through interstate commerce when
the goods reach their destination.
A state use tax imposed on users of goods purchased out of state is usually invalid if it:
Imposes a higher tax on goods purchased out of state
To be constitutional, a “doing business” tax (e.g., a privilege, franchise, or occupation tax imposed on businesses for the privilege of doing business in a state):
Must be fairly apportioned and must fairly relate to services provided by the state
Under the Twenty-First Amendment:
a state may not prohibit interstate shipments of liquor to pass through the state
When apportioning a state ad valorem property tax on instrumentalities used to transport goods in interstate commerce, the state may:
Place on the taxpayer the burden of establishing that an instrumentality has acquired a taxable situs outside his domiciliary state
What is the standard for determining whether a nondiscriminatory state law that burdens interstate commerce will be upheld?
The law will be upheld if the burden on interstate commerce does not outweigh the promotion of legitimate local interests
If a state tax on interstate commerce discriminates against a natural person who is a nonresident, which of the following lists contains the constitutional clauses most likely to be relevant in determining whether the tax is valid?
Commerce Clause, Equal Protection Clause, and Article IV Privileges and Immunities Clause
Generally, the Commerce Clause prohibits states from discriminating against out-of-state competition. An exception to this prohibition is where:
the state acts as a market participant.
The Privileges or Immunities Clause of the Fourteenth Amendment
applies when a state denies its own citizens rights of national citizenship.
A state use tax imposed on users of goods purchased out of state:
May be valid even if it seeks to have out-of-state sellers collect the tax
Taxation as control over state
Congress may regulate states(and local govt) by putting conditions on a grant of money. This is under Congress’s spending power.
the conditions must be:
- clearly stated
- related to purpose of the program
- not unduley coersive.
