Term
| What is the dormant commerce clause? |
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Definition
If Congress has not enacted legislation in an area of interstate commerce, states may regulate so long as the state or local action does not:
1. Discriminate against out-of-state commerce.
2. Unduly burden interstate commerce (which means it protects local economic interests at the expense of out of state competitors); AND
3. Regulate extra-territorial (out of state) activity |
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Term
| What is the necessary to important state interest exception to the dormant commerce clause? |
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Definition
If a regulation discriminates against out of state commerce on its face or in practice, it may be upheld if the local government can establish that:
1. An important local interest is being served; AND
2. No other nondiscriminatory means are available to achieve that purpose. |
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Term
| What is the market-participant exception to the dormant commerce clause? |
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Definition
If a regulation discriminates against out of state commerce on its face or in practice, it may be upheld if the local government can establish that:
A state is acting as a market participant and not a regulator. |
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Term
| What is the traditional government function exception to the dormant commerce clause? |
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Definition
| State and local regulations may favor state and local GOVERNMENT (not private) entities when they are performing traditional governmental functions such as waste disposal. |
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Term
| What is the subsidy exception to the dormant commerce clause? |
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Definition
| A state may favor its own citizens when providing for subsidy such as giving a tuition rate lowered for in-state residents. |
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Term
| Can Congress permit states to act in ways that would violate the dormant commerce clause? If so, why? |
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Definition
| Yes, because Congress has exclusive authority over the regulation of interstate commerce. |
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Term
| How does a court determine whether a regulation is an undue burden on interstate commerce? |
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Definition
| The court balances the objective and purpose of the state law against the burden on interstate commerce and evaluates whether there are less restrictive alternatives. |
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Term
| States may tax interstate commerce when: |
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Definition
| Congress has not already acted in the particular area and the tax does not discriminate against or unduly burden interstate commerce. |
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Term
| What is the four-part test to determine whether a state tax on interstate commerce comports with the commerce clause? |
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Definition
1. There must be a substantial nexus between the activity being taxed and the taxing state.
2. The tax must be fairly apportioned according to a rational formula.
3. The tax may not provide a direct commercial advantage to local businesses over interstate competitors without specific congressional authorization.
4. The tax must be fairly related to the services provided by the taxing state. |
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Term
| A tax may be invalid under two provisions of the constitution aside from the commerce clause. Which provisions and how do they work? |
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Definition
The comity clause prevents discrimination against nonresident individuals.
The equal protection clause may be violated by discriminatory tax on an out-of-state business. |
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Term
| What is an ad velorem tax and when is it valid? |
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Definition
A tax based on the value of real or personal property. They are generally valid, but may not be levied on goods in the course of transit.
They may be levied on instrumentalities of commerce if: The instrumentality has a taxable situs within or sufficient contacts with the taxing state and
2. The tax is fairly apportioned to the amount of time the instrumentality is in the state. |
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Term
| What are the types of taxes levied on interstate commerce? |
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Definition
1. Ad valorem tax
2. Sales Tax
3. Use Tax
4. "Doing business" Tax |
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Term
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Definition
| A tax on goods purchased out of state but used within the taxing state. These are valid as long as the use rate is not higher than the sales tax rate on the same item. |
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Term
| What is a doing business tax and when is it valid? |
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Definition
A tax levied against companies for the privilege of doing business in a state.
1. The activity taxed must have a substantial nexus to the taxing state.
2. The tax must be fairly apportioned.
3. The tax may not discriminate against interstate commerce.
AND
4. The tax must be fairly related to the services provided by the state. |
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Term
| Can states tax foreign imports and exports? |
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Definition
| Only with the express consent of Congress, or only what is absolutely necessary for executing its inspection laws. |
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Term
| What is express preemption? |
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Definition
Federal law expressly preempts state law in cases in which the Constitution makes the federal power exclusive
OR
Where Congress has enacted legislation that explicitly prohibits state regulation in the same area. |
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Term
| How does a court determine whether a state statute is preempted by a federal statute? |
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Definition
It narrowly construes the federal power by the language of the statute.
Then it determines whether the Federal law contains a savings clause which explicitly preserves or allows state laws that regulate in the same area. |
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Term
| What are the types of implied preemption? |
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Definition
1. When Congress intended for federal law to OCCUPY THE FIELD OF LAW which can be inferred from a framework or regulation that Congress left no room for state supplementation
OR
The state law directly conflicts with the federal law which makes it impossible to comply with both statutes.
3. A state law that creates an obstacle to or frustrates the accomplishment of that law's purpose. |
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Term
| What are the types of implied preemption? |
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Definition
1. When Congress intended for federal law to OCCUPY THE FIELD OF LAW which can be inferred from a framework or regulation that Congress left no room for state supplementation
OR
The state law directly conflicts with the federal law which makes it impossible to comply with both statutes.
3. A state law that creates an obstacle to or frustrates the accomplishment of that law's purpose. |
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Term
| What is the full faith and credit clause? |
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Definition
Out of state judgments must be given in-state effect if the decision meets the three requirements:
1. The court that rendered the judgment had jurisdiction.
2. The judgment was on the merits rather than a procedural issue.
3. The judgment is final. |
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