State Taxes and 'Pike Balancing'
For many years, the Supreme Court has applied different frameworks in determining whether state regulations or taxes violate the dormant Commerce Clause. A state regulation—even when it does not discriminate against interstate commerce or operate extraterritorially—is unconstitutional if it imposes costs on multistate actors that are “clearly excessive” relative to the regulation’s local benefits. By contrast, the Court has never applied this so-called “Pike balancing test” to state taxes. In its most recent state tax decision, however—South Dakota v. Wayfair, Inc.—the Court indicated Pike could provide a basis for challenging state tax schemes. Wayfair has thus created a bit of a puzzle: How exactly should undue burden analysis apply to state taxes? Contrary to the positions of several courts and scholars, this article contends that, under existing constitutional law, tax liabilities themselves—independent of the costs of compliance—are incapable of imposing burdens that are constitutionally “undue.” If we survey the possible types of incidental costs state taxes might impose on interstate commerce, it’s clear those costs cannot be “clearly excessive” in a constitutional sense—either because precedent forecloses that conclusion, or because the inquiry Pike posits is not amenable to judicial resolution. This explains why the Court has never invalidated a state tax liability due to its incidental burden on interstate commerce. And it explains why the Court mentioned Pike specifically in Wayfair, which concerned the burden of a tax compliance obligation, not a tax liability. The only state tax disputes for which undue burden analysis is appropriate are those concerning the costs of tax compliance. In every other type of state tax case, “Pike balancing” is inapt
Year of publication: |
[2023]
|
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Authors: | Joondeph, Bradley W. |
Publisher: |
[S.l.] : SSRN |
Saved in:
freely available
Extent: | 1 Online-Ressource (52 p) |
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Type of publication: | Book / Working Paper |
Language: | English |
Notes: | In: 99 Indiana Law Journal Nach Informationen von SSRN wurde die ursprüngliche Fassung des Dokuments July 24, 2023 erstellt |
Other identifiers: | 10.2139/ssrn.4399640 [DOI] |
Source: | ECONIS - Online Catalogue of the ZBW |
Persistent link: https://www.econbiz.de/10014358235
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