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ArtI.S8.C3.7.11.1 Overview of State Taxation and Dormant Commerce Clause

Article I, Section 8, Clause 3:

[The Congress shall have Power . . . ] To regulate Commerce with foreign Nations, and among the several States, and with the Indian Tribes; . . .

In 1959, the Supreme Court acknowledged that, with respect to the taxing power of the states in light of the negative (or “dormant” ) Commerce Clause, “some three hundred full-dress opinions” as of that year had not resulted in “consistent or reconcilable” doctrine but rather in something more resembling a “quagmire.” 1 Although many of the principles still applicable in constitutional law may be found in the older cases, the Court has worked to drain that quagmire, though at different times for taxation and for regulation.

The task of drawing the line between state power and the commercial interest has proved a comparatively simple one in the field of foreign commerce, the two things being in great part territorially distinct.2 With “commerce among the States,” affairs are very different. Interstate commerce is conducted by persons and corporations that are ordinarily engaged also in local business, often through activities that comprise the most ordinary subject matter of state power. In this field, the Court consequently has been unable to rely upon sweeping solutions. To the contrary, its judgments have often been fact-bound and difficult to reconcile, and this is particularly the case with respect to the infringement of interstate commerce by the state taxing power.3

Nw. States Portland Cement Co. v. Minnesota, 358 U.S. 450, 457–58 (1959) (quoting Miller Bros. Co. v. Maryland, 347 U.S. 340, 344 (1954)). Justice Felix Frankfurter was similarly skeptical of definitive statements. “To attempt to harmonize all that has been said in the past would neither clarify what has gone before nor guide the future. Suffice it to say that especially in this field opinions must be read in the setting of the particular cases and as the product of preoccupation with their special facts.” Freeman v. Hewit, 329 U.S. 249, 251–52 (1946). back
See J. Hellerstein & W. Hellerstein, State and Local Taxation: Cases and Materials ch. 5 (8th ed. 2005). back
In addition to the sources previously cited, see J. Hellerstein & W. Hellerstein, supra note 2. For a succinct description of the history, see W. Hellerstein, State Taxation of Interstate Business: Perspectives on Two Centuries of Constitutional Adjudication, 41 Tax Law. 37 (1987). back