State Sales Taxes, Section 90, and The Interpretation of 'excise'
As a result of the loss of income taxing powers, states turned to other taxation powers such as sales taxes. As 'excise' taxes are an exclusive Commonwealth power in section 90 of the constitution, the interpretation of excise became a critical issue.
The High Court has interpreted 'excise' to mean any tax imposed up to and including the point of sale. The result of this interpretation is to prevent state sales taxes. In Ha v New South Wales (1997) state excise and franchise tax regimes were struck down as an excise.
Read more about this topic: Constitutional Basis Of Taxation In Australia, Vertical Fiscal Imbalance: The Redundancy of State Taxing Power
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