commerce clause in Hawaii

1972The current view of the United States Supreme Court appears to be that a state tax passes muster under the commerce clause if it can satisfy three conditions: 1) the tax does not discriminate against interstate commerce either on its face or in effect, Nippert v. City of Richmond, 327 U.S. 416 , 66 S.Ct. 586 , 90 L.Ed. 760 (1946); 2) the tax is fairly apportioned in such a way as to include within the measure of the tax only that income attributable to activity within the state, General Motors Corporation v. Washington, 377 U.S. *1177 436, 440-441, 84 S.Ct. 1564 , 12 L.Ed.2d 430 (1964); 3) the

1972The current view of the United States Supreme Court appears to be that a state tax passes muster under the commerce clause if it can satisfy three conditions: 1) the tax does not discriminate against interstate commerce either on its face or in effect, Nippert v. City of Richmond, 327 U.S. 416 (1946); 2) the tax is fairly apportioned in such a way as to include within the measure of the tax only that income attributable to activity within the state, General Motors Corporation v. Washington, 377 U.S. 436, 440-41 (1964); 3) the tax does no.t subject interstate commerce to the burden of cumulativ

1963"It was not the purpose of the commerce clause to relieve those engaged in interstate commerce from their just share of state tax burden even though it increases the cost of doing the business. `Even interstate business must pay its way.' * * *." The Court further stated on page 256: "* * * Taxation measured by gross receipts from interstate commerce has been sustained when fairly apportioned to the commerce carried on within the taxing state, * * * and in other cases has been rejected only because the apportionment was found to be inadequate or unfair. * * *" [11] Appellant relies upon the ca

1963“It was not the purpose of the commerce clause to relieve those engaged in interstate commerce from their just share of state tax burden even though it increases the cost of doing the business. ‘Even interstate business must pay its way/ * * The Court further stated on page 256: “* * * Taxation measured by gross receipts from interstate commerce has been sustained when fairly apportioned to the commerce carried on within the taxing state, * * * and in other cases has been rejected only because the apportionment was found to be inadequate or unfair. * * *” 11 Appellant relies upon the case of R

2015Pike v. Bruce Church, Inc., 397 U.S. 137, 142 , 90 S.Ct. 844 , 25 L.Ed.2d 174 (1970).

2015Pike v. Bruce Church, Inc., 397 U.S. 137, 142 , 90 S.Ct. 844 , 25 L.Ed.2d 174 (1970).

2013In People v. Hsu, 82 Cal.App.4th 976 , 99 Cal.Rptr.2d 184 (2000), the California Court of Appeals also rejected a Commerce Clause challenge to California’s child luring statute, Cal.Penal Code § 288.2 (West 2008), but applied Pike after concluding that “[t]he Internet is undeniably an incident of interstate commerce.” Hsu, 99 Cal.Rptr.2d at 190 .

2013In People v. Hsu, 82 Cal.App.4th 976 , 99 Cal.Rptr.2d 184 (2000), the California Court of Appeals also rejected a Commerce Clause challenge to California’s child luring statute, Cal.Penal Code § 288.2 (West 2008), but applied Pike after concluding that “[t]he Internet is undeniably an incident of interstate commerce.” Hsu, 99 Cal.Rptr.2d at 190 .

2004Container Corp. v. Franchise Tax Bd., 463 U.S. 159, 164 , 103 S.Ct. 2933 , 77 L.Ed.2d 545 (1983) (holding that taxpayer has burden of showing by “clear and cogent evidence” that the state tax contravenes the commerce clause); Pray v. Judicial Selection Comm’n State of Hawai‘i, 75 Haw. 333, 340 , 861 P.2d 723, 727 (1993) (stating that legislative enactments are presumptively constitutional and a party challenging a statutory scheme bears the burden of showing unconstitutionality beyond a reasonable doubt and the constitutional defect must be clear, manifest, and unmistakable).

2004Container Corp. v. Franchise Tax Bd., 463 U.S. 159, 164 , 103 S.Ct. 2933 , 77 L.Ed.2d 545 (1983) (holding that taxpayer has burden of showing by “clear and cogent evidence” that the state tax contravenes the commerce clause); Pray v. Judicial Selection Comm’n State of Hawai‘i, 75 Haw. 333, 340 , 861 P.2d 723, 727 (1993) (stating that legislative enactments are presumptively constitutional and a party challenging a statutory scheme bears the burden of showing unconstitutionality beyond a reasonable doubt and the constitutional defect must be clear, manifest, and unmistakable).

2004Container Corp. v. Franchise Tax Bd., 463 U.S. 159, 164 , 103 S.Ct. 2933 , 77 L.Ed.2d 545 (1983) (holding that taxpayer has burden of showing by “clear and cogent evidence” that the state tax contravenes the commerce clause); Pray v. Judicial Selection Comm’n State of Hawai‘i, 75 Haw. 333, 340 , 861 P.2d 723, 727 (1993) (stating that legislative enactments are presumptively constitutional and a party challenging a statutory scheme bears the burden of showing unconstitutionality beyond a reasonable doubt and the constitutional defect must be clear, manifest, and unmistakable).

2004In Complete Auto, the Court held that a tax which is assessed on companies for the privilege of doing business in the state does not contravene the commerce clause when “[1] the tax is applied to an activity with a substantial nexus with the taxing State, [2] is fairly apportioned, [3] does not discriminate against interstate commerce, and [4] is fairly related to the services provided by the State.” 430 U.S. at 279 , 97 S.Ct. 1076 .

2004In Complete Auto, the Court held that a tax which is assessed on companies for the privilege of doing business in the state does not contravene the commerce clause when “[1] the tax is applied to an activity with a substantial nexus with the taxing State, [2] is fairly apportioned, [3] does not discriminate against interstate commerce, and [4] is fairly related to the services provided by the State.” 430 U.S. at 279 , 97 S.Ct. 1076 .

1996See, e.g., Allegheny Pittsburgh Coal Co. v. County Comm’n of Webster County, 488 U.S. 336, 346, 109 S.Ct. 633, 639 , 102 L.Ed.2d 688 (1989); Hillsborough v. Cromwell, 326 U.S. 620, 623 , 66 S.Ct. 445, 448 , 90 L.Ed. 358 (1946); Iowa-Des Moines Nat’l Bank v. Bennett, 284 U.S. 239, 247 , 52 S.Ct. 133, 136 , 76 L.Ed. 265 (1931); Sioux City Bridge Co. v. Dakota County, 260 U.S. 441, 446 , 43 S.Ct. 190, 191-92 , 67 L.Ed. 340 (1923); cf. In re Tax Appeal of Hawaiian Flour Mills, Inc., 76 Hawai'i 1, 8-9 , 868 P.2d 419, 426-27 (1994) (involving tax assessment that violated the commerce clause of the U

1996See, e.g., Allegheny Pittsburgh Coal Co. v. County Comm’n of Webster County, 488 U.S. 336, 346, 109 S.Ct. 633, 639 , 102 L.Ed.2d 688 (1989); Hillsborough v. Cromwell, 326 U.S. 620, 623 , 66 S.Ct. 445, 448 , 90 L.Ed. 358 (1946); Iowa-Des Moines Nat’l Bank v. Bennett, 284 U.S. 239, 247 , 52 S.Ct. 133, 136 , 76 L.Ed. 265 (1931); Sioux City Bridge Co. v. Dakota County, 260 U.S. 441, 446 , 43 S.Ct. 190, 191-92 , 67 L.Ed. 340 (1923); cf. In re Tax Appeal of Hawaiian Flour Mills, Inc., 76 Hawai'i 1, 8-9 , 868 P.2d 419, 426-27 (1994) (involving tax assessment that violated the commerce clause of the U

1996See, e.g., Allegheny Pittsburgh Coal Co. v. County Comm’n of Webster County, 488 U.S. 336, 346, 109 S.Ct. 633, 639 , 102 L.Ed.2d 688 (1989); Hillsborough v. Cromwell, 326 U.S. 620, 623 , 66 S.Ct. 445, 448 , 90 L.Ed. 358 (1946); Iowa-Des Moines Nat’l Bank v. Bennett, 284 U.S. 239, 247 , 52 S.Ct. 133, 136 , 76 L.Ed. 265 (1931); Sioux City Bridge Co. v. Dakota County, 260 U.S. 441, 446 , 43 S.Ct. 190, 191-92 , 67 L.Ed. 340 (1923); cf. In re Tax Appeal of Hawaiian Flour Mills, Inc., 76 Hawai'i 1, 8-9 , 868 P.2d 419, 426-27 (1994) (involving tax assessment that violated the commerce clause of the U

1996See, e.g., Allegheny Pittsburgh Coal Co. v. County Comm’n of Webster County, 488 U.S. 336, 346, 109 S.Ct. 633, 639 , 102 L.Ed.2d 688 (1989); Hillsborough v. Cromwell, 326 U.S. 620, 623 , 66 S.Ct. 445, 448 , 90 L.Ed. 358 (1946); Iowa-Des Moines Nat’l Bank v. Bennett, 284 U.S. 239, 247 , 52 S.Ct. 133, 136 , 76 L.Ed. 265 (1931); Sioux City Bridge Co. v. Dakota County, 260 U.S. 441, 446 , 43 S.Ct. 190, 191-92 , 67 L.Ed. 340 (1923); cf. In re Tax Appeal of Hawaiian Flour Mills, Inc., 76 Hawai'i 1, 8-9 , 868 P.2d 419, 426-27 (1994) (involving tax assessment that violated the commerce clause of the U

1996See, e.g., Allegheny Pittsburgh Coal Co. v. County Comm’n of Webster County, 488 U.S. 336, 346, 109 S.Ct. 633, 639 , 102 L.Ed.2d 688 (1989); Hillsborough v. Cromwell, 326 U.S. 620, 623 , 66 S.Ct. 445, 448 , 90 L.Ed. 358 (1946); Iowa-Des Moines Nat’l Bank v. Bennett, 284 U.S. 239, 247 , 52 S.Ct. 133, 136 , 76 L.Ed. 265 (1931); Sioux City Bridge Co. v. Dakota County, 260 U.S. 441, 446 , 43 S.Ct. 190, 191-92 , 67 L.Ed. 340 (1923); cf. In re Tax Appeal of Hawaiian Flour Mills, Inc., 76 Hawai'i 1, 8-9 , 868 P.2d 419, 426-27 (1994) (involving tax assessment that violated the commerce clause of the U

1996See, e.g., Allegheny Pittsburgh Coal Co. v. County Comm’n of Webster County, 488 U.S. 336, 346, 109 S.Ct. 633, 639 , 102 L.Ed.2d 688 (1989); Hillsborough v. Cromwell, 326 U.S. 620, 623 , 66 S.Ct. 445, 448 , 90 L.Ed. 358 (1946); Iowa-Des Moines Nat’l Bank v. Bennett, 284 U.S. 239, 247 , 52 S.Ct. 133, 136 , 76 L.Ed. 265 (1931); Sioux City Bridge Co. v. Dakota County, 260 U.S. 441, 446 , 43 S.Ct. 190, 191-92 , 67 L.Ed. 340 (1923); cf. In re Tax Appeal of Hawaiian Flour Mills, Inc., 76 Hawai'i 1, 8-9 , 868 P.2d 419, 426-27 (1994) (involving tax assessment that violated the commerce clause of the U

1996In McKesson Corp., the Court observed that the retroactive assessment of a tax increase does not necessarily deny due process to those whose taxes are increased, though beyond some temporal point the retroactive imposition of a significant tax burden may be “so harsh and oppressive as to transgress the constitutional limitation,” depending on "the nature of the tax and the circumstances in which it is laid." 496 U.S. at 40 n. 23, 110 S.Ct. at 2252 n. 23 (citing, inter alia, Welch v. Henry, 305 U.S. 134, 147 , 59 S.Ct. 121, 126 , 83 L.Ed. 87 rehearing denied, 305 U.S. 675 , 59 S.Ct. 250 , 83 L.

1996In McKesson Corp., the Court observed that the retroactive assessment of a tax increase does not necessarily deny due process to those whose taxes are increased, though beyond some temporal point the retroactive imposition of a significant tax burden may be “so harsh and oppressive as to transgress the constitutional limitation,” depending on "the nature of the tax and the circumstances in which it is laid." 496 U.S. at 40 n. 23, 110 S.Ct. at 2252 n. 23 (citing, inter alia, Welch v. Henry, 305 U.S. 134, 147 , 59 S.Ct. 121, 126 , 83 L.Ed. 87 rehearing denied, 305 U.S. 675 , 59 S.Ct. 250 , 83 L.

1996See, e.g., Allegheny Pittsburgh Coal Co. v. County Comm’n of Webster County, 488 U.S. 336, 346, 109 S.Ct. 633, 639 , 102 L.Ed.2d 688 (1989); Hillsborough v. Cromwell, 326 U.S. 620, 623 , 66 S.Ct. 445, 448 , 90 L.Ed. 358 (1946); Iowa-Des Moines Nat’l Bank v. Bennett, 284 U.S. 239, 247 , 52 S.Ct. 133, 136 , 76 L.Ed. 265 (1931); Sioux City Bridge Co. v. Dakota County, 260 U.S. 441, 446 , 43 S.Ct. 190, 191-92 , 67 L.Ed. 340 (1923); cf. In re Tax Appeal of Hawaiian Flour Mills, Inc., 76 Hawai'i 1, 8-9 , 868 P.2d 419, 426-27 (1994) (involving tax assessment that violated the commerce clause of the U

1996See, e.g., Allegheny Pittsburgh Coal Co. v. County Comm’n of Webster County, 488 U.S. 336, 346, 109 S.Ct. 633, 639 , 102 L.Ed.2d 688 (1989); Hillsborough v. Cromwell, 326 U.S. 620, 623 , 66 S.Ct. 445, 448 , 90 L.Ed. 358 (1946); Iowa-Des Moines Nat’l Bank v. Bennett, 284 U.S. 239, 247 , 52 S.Ct. 133, 136 , 76 L.Ed. 265 (1931); Sioux City Bridge Co. v. Dakota County, 260 U.S. 441, 446 , 43 S.Ct. 190, 191-92 , 67 L.Ed. 340 (1923); cf. In re Tax Appeal of Hawaiian Flour Mills, Inc., 76 Hawai'i 1, 8-9 , 868 P.2d 419, 426-27 (1994) (involving tax assessment that violated the commerce clause of the U

1977The taxpayer relies upon Halliburton Oil Well Co. v. Reily, 373 U.S. 64 (1963), for the proposition that equal treatment for in-state and out-of-state taxpayers similarly situated is the condition precedent for a valid use tax on goods imported from out-of-state.

1977With respect to the commerce clause of the federal Constitution, the court stated in 228 Ind. at 511-12 , 93 N.E.2d at 177 : “It should also be remembered that contracts between citizens of different states are not subjects of interstate commerce where the performance of the contract is to be completed and carried out wholly within the borders of the state, even though such contracts may affect interstate commerce, [citations omitted] and the appellee cannot escape the tax by billing from the outside or by setting up his machinery so that the income from the sale is paid to it from another sta

1977With respect to the commerce clause of the federal Constitution, the court stated in 228 Ind. at 511-12 , 93 N.E.2d at 177 : “It should also be remembered that contracts between citizens of different states are not subjects of interstate commerce where the performance of the contract is to be completed and carried out wholly within the borders of the state, even though such contracts may affect interstate commerce, [citations omitted] and the appellee cannot escape the tax by billing from the outside or by setting up his machinery so that the income from the sale is paid to it from another sta

1972Citing Hasegawa v. Maui Pineapple Co., Ltd,., 52 Haw. 327 , 475 P.2d 679 (1970), the circuit court held that because there existed no rational relationship between the purposes of the Hawaii general excise tax law and the Director’s decision to assess the travel agents but not the carriers, the assessments against the taxpayers on their commissions derived from sales of interstate and foreign transportation and from package tours were discriminatory and thus illegal and the payments made by them pursuant to such assessments . . . shall be refunded . . . . 5 On appeal, the Director of Taxation

1972Citing Hasegawa v. Maui Pineapple Co., Ltd,., 52 Haw. 327 , 475 P.2d 679 (1970), the circuit court held that because there existed no rational relationship between the purposes of the Hawaii general excise tax law and the Director’s decision to assess the travel agents but not the carriers, the assessments against the taxpayers on their commissions derived from sales of interstate and foreign transportation and from package tours were discriminatory and thus illegal and the payments made by them pursuant to such assessments . . . shall be refunded . . . . 5 On appeal, the Director of Taxation

1972This court, in HC & D Moving & Storage Company, Inc. v. Yamane, 48 Haw. 486 , 405 P.2d 382 (1965), appeal dismissed, 383 U.S. 104 , 86 S.Ct. 717 , 15 L.Ed.2d 617 (1966), sought to reconcile the accumulation of past United States Supreme Court decisions regarding the limitations placed by the commerce clause upon the taxing power of the states.

1972This court, in HC&D Moving & Storage Company, Inc. v. Yamane, 48 Haw. 486 , 405 P.2d 382 (1965), appeal dismissed, 383 U.S. 104 (1966), sought to reconcile the accumulation of past United States Supreme Court decisions regarding the limitations placed by the commerce clause upon the taxing power of the states.

1972This court, in HC&D Moving & Storage Company, Inc. v. Yamane, 48 Haw. 486 , 405 P.2d 382 (1965), appeal dismissed, 383 U.S. 104 (1966), sought to reconcile the accumulation of past United States Supreme Court decisions regarding the limitations placed by the commerce clause upon the taxing power of the states.

1972This court, in HC&D Moving & Storage Company, Inc. v. Yamane, 48 Haw. 486 , 405 P.2d 382 (1965), appeal dismissed, 383 U.S. 104 (1966), sought to reconcile the accumulation of past United States Supreme Court decisions regarding the limitations placed by the commerce clause upon the taxing power of the states.

1972This court, in HC & D Moving & Storage Company, Inc. v. Yamane, 48 Haw. 486 , 405 P.2d 382 (1965), appeal dismissed, 383 U.S. 104 , 86 S.Ct. 717 , 15 L.Ed.2d 617 (1966), sought to reconcile the accumulation of past United States Supreme Court decisions regarding the limitations placed by the commerce clause upon the taxing power of the states.

1966Kansas City Steel Co. v. Arkansas, 269 U.S. 148, 150 .

1966Kansas City Structural Steel Co. v. State of Arkansas, 269 U.S. 148, 150 , 46 S.Ct. 59 , 70 L.Ed. 204 .

1966International Harvester Co. v. Kentucky, 234 U.S. 579 , * * Wills v. National Mineral Co., 176 Okla. 193 , 55 P.2d 449, 452 ; S. Howes Co. v. W.

1966International Harvester Co. v. Kentucky, 234 U.S. 579 , * * Wills v. National Mineral Co., 176 Okla. 193 , 55 P.2d 449, 452 ; S. Howes Co. v. W.