ArtI.S10.C2.5 Whether a Charge Qualifies as an Impost or Duty

Article I, Section 10, Clause 2:

No State shall, without the Consent of the Congress, lay any Imposts or Duties on Imports or Exports, except what may be absolutely necessary for executing it’s inspection Laws: and the net Produce of all Duties and Imposts, laid by any State on Imports or Exports, shall be for the Use of the Treasury of the United States; and all such Laws shall be subject to the Revision and Controul of the Congress.

The Import-Export Clause does not define what qualifies as an “impost” or “duty” that falls within its scope. Beginning with Brown v. Maryland, the Supreme Court interpreted these terms broadly, stressing that the form or name of the charge did not determine whether it falls within the Clause’s scope. Rather, the focus of the inquiry was the substance or operation of the challenged measure.1 Thus, for example, a duty on an importer, despite not being on the product itself, was effectively equivalent to a duty on imports and thereby prohibited.2

Following Brown, the Supreme Court applied the Import-Export Clause to a variety of state taxes and other charges.3 As the Court later noted, the Court generally treated the Clause as potentially applicable to all forms of state taxation on imports or exports,4 although the Court also ruled that pilotage fees fell outside the Clause’s scope, and that the measures must have some connection to importation or exportation to fall within the Clause.5

In 1976, the Court adopted a new approach to assessing whether a state measure violates the Import-Export Clause, cabining the Clause’s scope by holding that the terms “impost” and “duty” do not encompass all taxes or charges. In Michelin Tire Corp. v. Wages, the Court considered the history and meaning of these terms to conclude that the Import-Export Clause did not reach non-discriminatory ad valorem property taxes. The Court also overruled Low v. Austin to the extent that case was inconsistent with the Court’s new emphasis on defining “impost” and “duty.” 6

Under this new approach, to determine whether a charge may qualify as an impermissble impost or duty, a court must consider three factors: (1) whether it interferes with the Federal Government’s ability to speak with one voice in commercial relations with foreign governments; (2) whether it diverts import revenues from the federal to state government; and (3) whether it may jeopardize harmony between the states.7

The Court reiterated its “different approach” to the Import-Export Clause in 1978, concluding in Department of Revenue of the State of Washington v. Ass’n of Washington Stevedors, that an occupution tax on stevedores did not fall within the Clause’s scope.8 Not until the 1984 case of Limbach v. Hooven & Allison Co., however, did the Court expressly acknowledge that, in Michelin, it “adopted a fundamentally different approach to cases claiming the protection of the Import-Export Clause” and that therefore some of its prior cases, in addition to Low, were overruled.9 Applying this new approach, the Court has held other state taxes, including ad valorem property taxes and sales taxes, to fall outside the Clause’s scope.10

Brown v. Maryland, 25 U.S. 419, 444–45 (1827); Selliger v. Kentucky, 213 U.S. 200, 209 (1909). back
Brown, 25 U.S. at 444–45. back
See, e.g., Almy v. California, 65 U.S. 169 (1860) (stamp tax on bills of lading for gold and silver exports); Crew Levick & Co. v. Pennsylvania, 245 U.S. 292 (1917) (state tax on the business of selling goods in foreign commerce, as measured by gross receipts from merchandise shipped abroad); Anglo-Chilean Nitrate Sales Corp. v. Alabama, 288 U.S. 218 (1933) (franchise tax). back
Limbach v. Hooven & Allison Co., 466 U.S. 353, 360 (1984). back
Mager v. Grima, 49 U.S. 490, 494 (1850); Cooley v. Bd. of Wardens, 53 U.S. 299 (1851). back
423 U.S. 276, 279–83 (1976). back
Id. at 285–86. back
435 U.S. 734, 752–54 (1976). back
466 U.S. at 359–61 (overruling Hooven & Allison Co. v. Evatt, 324 U.S. 652, 658 (1945)). back
R.J. Reynolds Tobacco Co. v. Durham Cnty., 479 U.S. 130, 153 (1986); Itel Containers Int’l Corp. v. Huddleston, 507 U.S. 60, 77 (1993). back