Prohibition on Taxes on Exports
Article I, Section 9, Clause 5:
No Tax or Duty shall be laid on Articles exported from any State.
The prohibition on excise taxes applies only to the imposition of duties on goods by reason of exportation.1 The word “export” signifies goods exported to a foreign country, not to an unincorporated territory of the United States.2 A general tax laid on all property alike, including that intended for export, is not within the prohibition, if it is not levied on goods in course of exportation nor because of their intended exportation.3
Continuing its refusal to modify its export clause jurisprudence,4 the Court held unconstitutional the Harbor Maintenance Tax (HMT) under the export clause insofar as the tax was applied to goods loaded at United States ports for export. The HMT required shippers to pay a uniform charge on commercial cargo shipped through the Nation's ports. The clause, said the Court, “categorically bars Congress from imposing any tax on exports.” 5 However, the clause does not interdict a “user fee,” which is a charge that lacks the attributes of a generally applicable tax or duty and is designed to compensate for government supplied services, facilities, or benefits; and it was that defense to which the government repaired once it failed to obtain a modification of the rules under the clause. But the HMT bore the indicia of a tax. It was titled as a tax, described as a tax in the law, and codified in the Internal Revenue Code. Aside from labels, however, courts must look to how things operate, and the HMT did not qualify as a user fee. It did not represent compensation for services rendered. The value of export cargo did not correspond reliably with the federal harbor services used or usable by the exporter. Instead, the extent and manner of port use depended on such factors as size and tonnage of a vessel and the length of time it spent in port.6 The HMT was thus a tax, and therefore invalid.
Where the sale to a commission merchant for a foreign consignee was consummated by delivery of the goods to an exporting carrier, the sale was held to be a step in the exportation and hence exempt from a general tax on sales of such commodity.7 The giving of a bond for exportation of distilled liquor was not the commencement of exportation so as to exempt from an excise tax spirits that were not exported pursuant to such bond.8 A tax on the income of a corporation derived from its export trade was not a tax on “articles exported” within the meaning of the Constitution.9
In United States v. IBM Corp.,10 the Court rejected the government's argument that it should refine its export-tax-clause jurisprudence. Rather than read the clause as a bar on any tax that applies to a good in the export stream, the government contended that the Court should bring this clause in line with the Import-Export Clause11 and with dormant-commerce-clause doctrine. In that view, the Court should distinguish between discriminatory and nondiscriminatory taxes on exports. But the Court held that sufficient differences existed between the export clause and the other two clauses, so that its bar should continue to apply to any and all taxes on goods in the course of exportation.
A stamp tax imposed on foreign bills of lading,12 charter parties,13 or marine insurance policies,14 was in effect a tax or duty upon exports, and so void; but an act requiring the stamping of all packages of tobacco intended for export in order to prevent fraud was held not to be forbidden as a tax on exports.15
- Turpin v. Burgess, 117 U.S. 504, 507 (1886). Cf. Almy v. California, 65 U.S. (24 How.) 169, 174 (1861).
- Dooley v. United States, 183 U.S. 151, 154 (1901).
- Cornell v. Coyne, 192 U.S. 418, 428 (1904); Turpin v. Burgess, 117 U.S. 504, 507 (1886).
- See United States v. IBM, 517 U.S. 843, 850–61 (1996).
- United States v. United States Shoe Corp., 523 U.S. 360, 363 (1998).
- 523 U.S. at 367–69.
- Spalding & Bros. v. Edwards, 262 U.S. 66 (1923).
- Thompson v. United States, 142 U.S. 471 (1892).
- Peck & Co. v. Lowe, 247 U.S. 165 (1918); National Paper Co. v. Bowers, 266 U.S. 373 (1924).
- 517 U.S. 843 (1996).
- Article I, § 10, cl. 2, applying to the states.
- Fairbank v. United States, 181 U.S. 283 (1901).
- United States v. Hvoslef, 237 U.S. 1 (1915).
- Thames & Mersey Inc. v. United States, 237 U.S. 19 (1915). In United States v. IBM Corp., 517 U.S. 843 (1996), the Court adhered to Thames & Mersey, and held unconstitutional a federal excise tax upon insurance policies issued by foreign countries as applied to coverage for exported products. The Court admitted that one could question the earlier case's equating of a tax on the insurance of exported goods with a tax on the goods themselves, but it observed that the government had chosen not to present that argument. Principles of stare decisis thus cautioned observance of the earlier case. Id. at 854–55. The dissenters argued that the issue had been presented and should be decided by overruling the earlier case. Id. at 863 (Justices Kennedy and Ginsburg dissenting).
- Pace v. Burgess, 92 U.S. 372 (1876); Turpin v. Burgess, 117 U.S. 504, 505 (1886).
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