Taxes Flashcards
When can a state impose taxes on businesses within its jurisdiction?
As long as the tax does not discriminate against or unfairly burden interstate commerce.
When does a state tax unfairly burden interstate commerce?
It automatically does unless (i) the activity taxed has a substantial nexus to the taxing state, (ii) the tax is fairly apportioned, and (iii) the tax fairly relates to the services provided by the state.
When can a state tax the federal government or its property?
(i) indirectly, and (ii) only when it doesn’t create an unreasonable burden on the federal government.
Ex: taxing a company that does business with the Fed is OK even though the tax will increase the prices of that company’s goods sold to the government. This is because the tax is indirect and reasonable.
When can Congress tax?
When (i) the tax has a reasonable relationship to revenue production, or (ii) if congress has the power to regulate the taxed activity.
