Dormant Commerce Clause - State Taxation

State Taxation

Over the years, the Supreme Court has consistently held that the language of the Commerce Clause contains a further, negative command prohibiting certain state taxation even when Congress has failed to legislate on the subject. Examples of such cases are Quill Corp. v. North Dakota, 504 U.S. 298 (1992); Northwestern States Portland Cement Co. v. Minnesota, 358 U.S. 450, 458 (1959) and H.P. Hood & Sons, Inc. v. Du Mond, 336 U.S. 525(1949).

Application of the dormant commerce clause to state taxation is another manifestation of the Court's holdings that the Commerce Clause prevents a State from retreating into economic isolation or jeopardizing the welfare of the Nation as a whole, as it would do if it were free to place burdens on the flow of commerce across its borders that commerce wholly within those borders would not bear. The Court's taxation decisions thus "reflected a central concern of the Framers that was an immediate reason for calling the Constitutional Convention: the conviction that in order to succeed, the new Union would have to avoid the tendencies toward economic Balkanization that had plagued relations among the Colonies and later among the States under the Articles of Confederation." Wardair Canada, Inc. v. Florida Dept. of Revenue, 477 U.S. 1 (1986); Hughes v. Oklahoma, 441 U.S. 322 (1979); Oklahoma Tax Commission v. Jefferson Lines, Inc., 514 U.S. 175 (1995).