State Taxation of Commerce

Question 1

State Taxation of Interstate Commerce

Answer 1

States may tax interstate commerce only if:

(1) Congress has not already acted in the particular area; and
(2) Tax does not discriminate against or unduly burden interstate commerce

Question 2

Test to Determine if State Taxation of Interstate Commerce is Valid

Answer 2

(1) SUBSTANTIAL NEXUS: between activity being taxed and taxing state
(2) FAIR APPORTIONMENT: interstate commerce taxes not more than local taxes
(3) NONDISCRIMINATION
(4) FAIR RELATIONSHIP: tax must be fairly related to services provided by taxing state

Question 3

State Taxation of Foreign Commerce

Answer 3

State must have congressional consent to impose import/export taxes