The Oyez Project: Economic Activity Issues - State Tax Arguments
U.S. Supreme Court Oral Arguments, presented by The Oyez Project (www.oyez.org)

• Allegheny Pittsburgh Coal v. Webster County - Oral Argument
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• Allied-Signal, Inc., As Successor-In-Interest To Bendix Corp. v. Director, Division Of Taxation - Oral Argument
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• Allied-Signal, Inc., As Successor-In-Interest To Bendix Corp. v. Director, Division Of Taxation - Oral Reargument
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• Amerada Hess Corp. v. N. J. Taxation Di - Oral Argument
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• American Trucking Associations, Inc. v. Scheiner - Oral Argument
  

  One of the types of fees that Pennsylvania used to finance the cost of its highway maintenance was lump-sum annual fees, also known as flat taxes. In 1980, Pennsylvania increased the fee for an identification marker required of every truck over a certain weight from $2 to $25, but exempted trucks registered in Pennsylvania from the fee _ the marker fee was "deemed" to be included in the registration fee that local truckers had to pay. In 1982, the marker tax was reduced to $5, but a new tax was introduced, taxing trucks by the axle. The axle tax applied to all trucks weighing more than 26,000 pounds, but the registration fee for Pennsylvania trucks was reduced in an amount calculated to offset that new tax for most trucks. These flat taxes were contested in two state court cases on the ground, inter alia, that they violated the Commerce Clause of the Federal Constitution. Since Pennsylvania-based trucks travel, on average, about five times as many miles in Pennsylvania as out-of-state trucks, the cost of the flat taxes was approximately five times as high per mile of road use for out-of-state vehicles as for local vehicles. For that reason, the lower courts in Pennsylvania found that both the marker tax and the axle tax violated the Commerce Clause. The Supreme Court of Pennsylvania considered both cases together and reversed.

• American Trucking Associations v. Smith - Oral Argument
  

  In 1983, the American Trucking Associations, Inc. (ATA) challenged the flat tax portion of Arkansas' Highway Use Equalization (HUE) tax, alleging that it violated the Commerce Clause. The Arkansas Supreme Court, relying on Supreme Court precedent, rejected this claim. Subsequently, on June 23, 1987, the Supreme Court decided American Trucking Ass'ns., Inc. v. Scheiner, 483 U.S. 266 (1987), which held that state application of flat highway use taxes was unconstitutional. Pending re-hearing in the Arkansas Supreme Court, Justice Blackmun ordered, in August 1987, that all new taxes collected be kept in escrow. Subsequently, the Arkansas Supreme Court held that HUE was unconstitutional, but that Scheiner did not apply retroactively. The court went on to decide that taxes already collected for the tax year beginning July 1, 1987, could remain in the state treasury, but that those funds placed in the escrow account ordered by Justice Blackmun should be refunded, as they had not been spent or budgeted for future spending.

• American Trucking Associations v. Smith - Oral Reargument
  

  In 1983, the American Trucking Associations, Inc. (ATA) challenged the flat tax portion of Arkansas' Highway Use Equalization (HUE) tax, alleging that it violated the Commerce Clause. The Arkansas Supreme Court, relying on Supreme Court precedent, rejected this claim. Subsequently, on June 23, 1987, the Supreme Court decided American Trucking Ass'ns., Inc. v. Scheiner, 483 U.S. 266 (1987), which held that state application of flat highway use taxes was unconstitutional. Pending re-hearing in the Arkansas Supreme Court, Justice Blackmun ordered, in August 1987, that all new taxes collected be kept in escrow. Subsequently, the Arkansas Supreme Court held that HUE was unconstitutional, but that Scheiner did not apply retroactively. The court went on to decide that taxes already collected for the tax year beginning July 1, 1987, could remain in the state treasury, but that those funds placed in the escrow account ordered by Justice Blackmun should be refunded, as they had not been spent or budgeted for future spending.

• Arkansas Writers' Project, Inc. v. Ragland - Oral Argument
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• Associated Industries of Missouri v. Lohman - Oral Argument
  

  Following Missouri's imposition of a 1.5% statewide "use tax," the Associated Industries of Missouri - representing Missouri businesses that had to collect the tax and a manufacturing firm that had to pay it - filed suit alleging that the tax violated the Commerce Clause by discriminating against interstate commerce. Such discrimination was said to result from the fact that the use tax exceeded many in-state localities' sales tax rate.

• Bacchus Imports Ltd. v. Dias - Oral Argument
  

  The Hawaii Liquor Tax, enacted in 1939, imposed a twenty percent excise tax on wholesale liquor sales. Certain locally produced alcohol products, such as okolehao brandy and fruit wine, were exempt from the tax. Bacchus Imports, a liquor wholesaler, challenged the law's validity and sought a refund of $45 million from the state of Hawaii.

• Barclays Bank Plc v. Franchise Tax Board Of California - Oral Argument
  

  California used a "worldwide combined reporting" method to determine tax liability for multinational corporations operating inside the state. Under this method, the multinational's income was taxed in proportion to the average percentage of worldwide payroll, property, and sales located inside the state. Barclays Bank of California (Barcal) was wholly owned by a multinational corporation, Barclays Bank International Limited (BBI). Barcal did not include financial data for BBI in its 1977 tax filings. The California Franchise Tax Board (Tax Board) determined that Barcal misrepresented the proportion of income subject to taxation, causing a tax deficiency of over one hundred thousand dollars. Barcal and BBI paid, but then sued for the amount paid, complaining that the cost to provide BBI's worldwide financial data was disproportionately large considering that Barcal operated largely independently of BBI and BBI operated largely outside of California. Barcal and BBI contended that this violated the Commerce Clause-derived anti-discrimination requirement, which prevents States from imposing disproportionately large tax compliance burdens upon corporations. The Tax Board allowed BBI to make a "reasonable approximation" of financial data to minimize costs, but BBI claimed that this action violated Due Process by admitting financial data that was possibly inaccurate.
  
  The California Supreme Court found no constitutional violation and remanded the case to a California Court of Appeals, which also did not find the burden disproportionate. Barcal and BBI also contended that the "worldwide combined reporting" method risked double taxation by the state and the federal government. Additionally, The "worldwide combined reporting" method deviated from taxing methods employed by other states, thus transgressing the federal government's interest in providing uniform standards for taxing foreign commerce. (The case was consolidated with Colgate Palmolive Co. v. Franchise Tax Board Of California.)

• Boston Stock Exchange v. State Tax Comm'n - Oral Argument
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• Burlington No. R. Co. v. Okla. Tax Comm'n - Oral Argument
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• Camps Newfound/Owatonna v. Harrison - Oral Argument
  

  Camps Newfound/Owatonna Inc. (Camps) operates a children's church camp in Maine and finances its operations through a $400 per camper weekly tuition charge. The majority of its campers are out of state children. Maine's tax scheme exempts charitable institutions incorporated in the state, and provides a more limited tax benefit for institutions which principally benefit non-Maine residents so long as their weekly service charge does not exceed $30 per person. Ineligible for any exemptions, Camps challenged the constitutionality of Maine's tax exemption statute. The U.S. Supreme Court granted certiorari following a reversal of a favorable Superior Court ruling by the Supreme Court of Maine.

• Chemical Waste Management, Inc. v. Hunt, Governor Of Alabama - Oral Argument
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• Complete Auto Transit Inc. v. Brady - Oral Argument
  

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