In the field of state and local taxation, no other clause of -- or silence within -- the Constitution has as much significance as the Commerce Clause. It yields the fundamental limitations on state taxing power with which professionals in our field grapple daily -- nexus, discrimination, and fair apportionment to name a few. This compilation of articles and essays presents analyses by preeminent authorities of not only the intricacies of these "day-to-day" issues, but also the theoretical underpinnings of Commerce Clause jurisprudence. The day-long program from which these pieces are adapted was held at Georgetown University Law Center on May 16th, 2007.
For information on the State and Local Tax Lawyer 2007 Symposium Edition, click here.
The Commerce Clause of the United States Constitution provides that "[t]he Congress shall have Power . . . [t]o regulate Commerce with foreign nations and among the several states." Congress's use of this power to enact federal legislation is sometimes called use of the "express" Commerce Clause because such action is expressly provided for in the Constitution. Historically, Congress has rarely used this power to affect state taxation directly. But there is no reason to believe that this trend will -- or should -- continue. As the states become more and more aggressive in enacting legislation and pursuing audit activity that targets out-of-state businesses and individuals, there is a growing recognition of the need for federal legislation to prohibit overreaching state taxation. As this becomes more apparent to those who work on Capitol Hill, there very well could be a spate of new laws enacted that circumscribe state taxing authority. Several such bills have been introduced in Congress in recent years.
This Article examines Congress's authority under the Commerce Clause of the U.S. Constitution to enact legislation that restricts state and local taxing power. The Article concludes, generally, that Congress's ability to legislate in this area is extremely broad and is clearly consistent with the intent of the drafters of and signatories to the Constitution. The Article is divided into four parts. Part II provides the history of the express Commerce Clause and examines how the U.S. Supreme Court has interpreted the reach of Congress's power in this area. Part III considers Congress's exercise of its Commerce Clause authority in the specific context of state taxation and considers challenges that have been made to Congress's authority to enact legislation restricting state taxation practices. Part IV examines preemption, and reverse preemption, of state tax laws. Part V concludes by calling on Congress to enact legislation that would curb state taxing powers and would bring much-needed clarity and uniformity to state and local taxation, thus meeting the Constitutional goal of ensuring the stability and growth of the American economy.
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