Twenty-First Amendment, Section 2:

The transportation or importation into any State, Territory, or possession of the United States for delivery or use therein of intoxicating liquors, in violation of the laws thereof, is hereby prohibited.

Generally, a state cannot rely on its Twenty-First Amendment powers to regulate or tax the import of alcoholic beverages destined for delivery or use in a federal area within the state’s boundaries.1 In Collins v. Yosemite Park & Curry Co., the Supreme Court considered whether the Twenty-First Amendment authorized the State of California to regulate alcoholic beverages imported for sale within a national park located in the state.2 Because California had not reserved such regulatory authority when it ceded exclusive jurisdiction over the park land to the federal government, the state attempted to rely on its Twenty-First Amendment powers to impose various regulatory requirements (e.g., licensing) on the beverages’ importation from other states.3

The Collins Court rejected the state’s assertion of regulatory authority. The Court noted that Section 2 of the Twenty-First Amendment prohibits importation of intoxicating liquors into any state “for delivery or use therein” in violation of that state’s laws.4 Because the alcoholic beverages were imported for delivery and sale within a national park under the federal government’s exclusive jurisdiction—and not for use within California itself—the Court determined that the state could not rely on its Twenty-First Amendment powers to regulate the beverages’ import or sale.5

Subsequently, the Supreme Court held that the Twenty-First Amendment did not authorize a state to tax wholesale transactions involving the importation of distilled spirits for sale on military bases located in the state but under the federal government’s exclusive jurisdiction.6 Military officers’ clubs and other nonappropriated fund activities had ordered the beverages from out-of-state suppliers for delivery on the bases, and the state had not reserved the power to tax or regulate such sales.7 The Court held that the Twenty-First Amendment was inapplicable even if the liquor might ultimately be consumed outside of the bases and within the taxing state.8 Two years later, the Court determined that the Twenty-First Amendment did not abrogate the federal government’s immunity from a state tax imposed on wholesale transactions involving liquor imported for consumption on military bases under concurrent federal and state jurisdiction.9

Despite its holdings in Collins and subsequent cases, the Supreme Court has indicated that a state may regulate imports destined for federal areas to the extent necessary to prevent diversion of liquor to local state markets.10 For example, in North Dakota v. United States, the Court upheld state laws that regulated the supply of out-of-state liquor to U.S. Air Force bases under concurrent federal and state jurisdiction.11 The laws required importers or out-of-state suppliers to report the volume of liquor shipped to the bases and affix special labels to the bottles destined for sale thereon.12 The Court upheld the state’s requirements even though the liquor in question was shipped directly to the federal enclaves for sale and consumption.13 A plurality of the Court reasoned that the state requirements were necessary to prevent diversion and therefore enjoyed a “strong presumption of validity” under the Twenty-First Amendment.14

Footnotes

1

Collins v. Yosemite Park & Curry Co., 304 U.S. 518, 536–38 (1938).

2

Id. at 521–22, 527. A federal contractor serving as a concessionaire sold the beverages to customers in the park. Id. at 521–22.

3

Id. at 536–38. The Supreme Court has held that a state may convey, and Congress may accept, either exclusive or qualified jurisdiction over property acquired within the geographical limits of a state for various purposes. For more information, see .

4

Collins, 304 U.S. at 536–38 (citing U.S. Const. amend. XXI, § 2).

5

Id. However, the Supreme Court held that California could impose an excise tax on the contractor’s sale of alcoholic beverages to customers in the park because the state had reserved that power when it ceded the land to the federal government. Id. at 535–36.

6

United States v. State Tax Comm’n of Miss., 412 U.S. 363, 373–78 (1973) (citing Collins, 304 U.S. at 538).

7

Id. at 371, 375.

8

Id. at 373–78.

9

Id. at 600–01, 613–14 (1975).

10

North Dakota v. United States, 495 U.S. 423, 426, 431–33 (1990) (plurality opinion). See also, e.g., State Tax Comm’n of Miss., 412 U.S. at 377 (1973) (indicating that, in the absence of contrary federal law, a state retained authority to regulate imported alcoholic beverages as they transited the state on their way to military bases in order to prevent the beverages’ diversion to local markets).

11

North Dakota, 495 U.S. at 426, 444.

12

Id. at 426–29. The labels were required to state that the liquor was restricted for use only on the bases. Id.

13

Id. at 444.

14

Id. at 431–33 (plurality opinion).