dormant commerce clause in Massachusetts

2017Quality of Or., 511 U.S. 93, 98 (1994). 17 We disagree with Genentech’s claim, based on its reading of the legislative history of § 38 (l), that the statutory change in the excise tax *271 apportionment formula for manufacturers in 1995 was an intentionally discriminatory one, fueled by a purpose to benefit local manufacturers directly at the expense of manufacturers that maintain their manufacturing facilities and operations in other States.

2015In the context of the dormant commerce clause, “ ‘discrimination’ simply means differential treatment of in-[S]tote and out-of-[S]tate economic interests that benefits the former and burdens the latter.” Oregon Waste, 511 U.S. at 99 . 9 The concept of “discrimination” also implicitly assumes “a comparison of substantially similar entities.” General Motors Corp. v. Tracy, 519 U.S. 278, 298 (1997). 10 A statute may be discriminatory on its face, in its effect, or in its underlying purpose.

2015A State tax is permissible under the dormant commerce clause if it “[1] 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.” Complete Auto Transit, Inc. v. Brady, 430 U.S. 274, 279 (1977).

2007In Arronson , the Supreme Judicial Court stated that Once a State tax is subject to commerce clause scrutiny, it will be upheld only if it meets the four part test of Complete Auto Transit, Inc. v. Brady, 430 U.S. 274, 279 (1977): the tax (1) must be applied to an activity with a substantial nexus with the taxing State; (2) must be fairly apportioned; (3) may not discriminate against interstate commerce; and (4) must be fairly related to the service provided by the State. 401 Mass. at 248 .

2016The Court’s decision reaffirmed the “internal consistency test” articulated in Container Corp. of Am. v. Franchise Tax Bd., 463 U.S. 159, 169 (1983), and Oklahoma Tax Comm’n v. Jefferson Lines, Inc., 514 U.S. 175, 185 (1995) (Jefferson Lines), for determining whether a tax violates the dormant commerce clause.

2011However, under the so-called dormant commerce clause, the United States Supreme Court has “impos[ed] limits on the authority of State and local governments to regulate in ways that impinge on interstate or foreign commerce.” Opinion of the Justices, 428 Mass. 1201, 1203-1204 (1998), citing Oklahoma Tax Comm’n v. Jefferson Lines, Inc., 514 U.S. 175, 179 (1995).

2012A dormant commerce clause challenge requires “a sensitive, case-by-case analysis of the purposes and effects” of a regulatory measure “to determine whether the statute under attack, whatever its name may be, will in its practical operation work discrimination against interstate commerce.” Id. at 201 (citation omitted).

1998Moreover, although the Supreme Court’s dormant commerce clause jurisprudence most often has been applied to measures that discriminate against out-of-State businesses, see, e.g., West Lynn Creamery, Inc. v. Healy, 512 U.S. 186 (1994), measures discriminating against out-of-State consumers have similarly not been tolerated.

2011Opinion of the Justices, supra at 1204-1205, quoting Perini Corp. v. Commissioner of Revenue, 419 Mass. 763, 766 (1995).

1998In assessing whether a particular statutory provision violates the dormant commerce clause, an initial question is whether that provision “has a sufficient effect on interstate commerce to evoke commerce clause scrutiny.” Perini Corp. v. Commis sioner of Revenue, 419 Mass. 763, 766 (1995), citing Aronson v. Commonwealth, 401 Mass. 244, 248 (1987), cert. denied, 488 U.S. 818 (1988).

2011However, under the so-called dormant commerce clause, the United States Supreme Court has “impos[ed] limits on the authority of State and local governments to regulate in ways that impinge on interstate or foreign commerce.” Opinion of the Justices, 428 Mass. 1201, 1203-1204 (1998), citing Oklahoma Tax Comm’n v. Jefferson Lines, Inc., 514 U.S. 175, 179 (1995).

2011Opinion of the Justices, supra at 1204-1205, quoting Perini Corp. v. Commissioner of Revenue, 419 Mass. 763, 766 (1995).

2007The dormant commerce clause is designed to “prevent economic protectionism and retaliation between states and to allow markets to flourish across state borders, thus prohibiting ‘laws that would excite .. .jealousies and re taliatoiy measures between the states.’ ” Ben Oehrleins & Sons & Daughters, Inc. v. Hennepin County, 115 F.3d 1372 , 1382 (8th Cir. 1997), quoting C&A Carbone, Inc. v. Town of Clarkstown, 511 U.S. 383, 390 (1994).

1998That a measure enacted by a city or other locality discriminates against both out-of-State interests and in-State interests outside that locality does not deflect analysis under the dormant commerce clause. 1 See Dean Milk Co. v. Madison, 340 U.S. 349 , 354 n.4 (1951) (it is “immaterial” that a city ordinance barring the sale of milk not processed within five miles of the city discriminates equally against in-State milk processed outside the five-mile perimeter); C & A Carbone, Inc. v. Clarks-town, 511 U.S. 383, 391 (1994); Fort Gratiot Sanitary Landfill, Inc. v. Michigan Dep’t of Natural Reso

2017As previously stated (see note 17, supra), what the commerce clause forbids as discriminatory is a State tax measure that “tax[es] a transaction or incident more heavily when it crosses state lines than when it occurs entirely within the State.” Chemical Waste Mgt., Inc. v. Hunt, 504 U.S. 334, 342 (1992), quoting Armco Inc. v. Hardesty, 467 U.S. 638, 642 , (1984).

2015See Amerada Hess Corp. v. Director, Div. *654 of Taxation, 490 U.S. 66, 75 (1989) (Amerada Hess); Chemical Waste Mgt., Inc. v. Hunt, 504 U.S. 334 , 344 n.6 (1992).

2007In Arronson , the Supreme Judicial Court stated that Once a State tax is subject to commerce clause scrutiny, it will be upheld only if it meets the four part test of Complete Auto Transit, Inc. v. Brady, 430 U.S. 274, 279 (1977): the tax (1) must be applied to an activity with a substantial nexus with the taxing State; (2) must be fairly apportioned; (3) may not discriminate against interstate commerce; and (4) must be fairly related to the service provided by the State. 401 Mass. at 248 .

1998In assessing whether a particular statutory provision violates the dormant commerce clause, an initial question is whether that provision “has a sufficient effect on interstate commerce to evoke commerce clause scrutiny.” Perini Corp. v. Commis sioner of Revenue, 419 Mass. 763, 766 (1995), citing Aronson v. Commonwealth, 401 Mass. 244, 248 (1987), cert. denied, 488 U.S. 818 (1988).

2023See Northeast Patients Group v. United Cannabis Patients & Caregivers of Me., 45 F.4th 542, 545 (1st Cir. 2022), quoting South-Cent.

2017See Department of Revenue of Ky. v. Davis, 553 U.S. 328, 337-338 (2008) (“The modern law of what has come to be called the dormant [cjommerce [cjlause is driven by concern about ‘economic protectionism — that is, regulatory measures designed to benefit in-[SJtate economic interests by burdening out-of-[SJtate competitors’ ’’[citation omitted]).

2016The Court’s decision reaffirmed the “internal consistency test” articulated in Container Corp. of Am. v. Franchise Tax Bd., 463 U.S. 159, 169 (1983), and Oklahoma Tax Comm’n v. Jefferson Lines, Inc., 514 U.S. 175, 185 (1995) (Jefferson Lines), for determining whether a tax violates the dormant commerce clause.

2016Aloha Freightways, Inc. v. Commissioner of Revenue, 428 Mass. 418, 421 (1998).

2016See Comptroller of the Treasury of Md. v. Wynne, 135 S. Ct. 1787, 1803-1805 (2015) (Wynne). 5 In its appeal to this court in The First Marblehead Corp. v. Commissioner of Revenue, 470 Mass. 497 (2015) (First Marblehead).

2016Wynne, 135 S. Ct. at 1793 , concerned a challenge to Maryland’s personal income tax scheme under the dormant commerce clause of the United States Constitution.

2016In Wynne , the Court concluded that the Maryland income tax scheme failed the internal consistency test, and thereby violated the dormant commerce clause, because it hypothetically resulted in double taxation of the income of Maryland residents that was earned outside the State. 4 Wynne, supra at 1803-1804 .

2015See Amerada Hess Corp. v. Director, Div. *654 of Taxation, 490 U.S. 66, 75 (1989) (Amerada Hess); Chemical Waste Mgt., Inc. v. Hunt, 504 U.S. 334 , 344 n.6 (1992).

2015Dilworth Co., 322 U.S. 327, 330 (1944).

2015In the context of the dormant commerce clause, “ ‘discrimination’ simply means differential treatment of in-[S]tote and out-of-[S]tate economic interests that benefits the former and burdens the latter.” Oregon Waste, 511 U.S. at 99 . 9 The concept of “discrimination” also implicitly assumes “a comparison of substantially similar entities.” General Motors Corp. v. Tracy, 519 U.S. 278, 298 (1997). 10 A statute may be discriminatory on its face, in its effect, or in its underlying purpose.

2015The dormant commerce clause seeks to prevent economic “Balkanization,” Bacchus Imports, Ltd. v. Dias, 468 U.S. 263, 276 (1984), and to protect “an area of free trade among the several States.” Boston Stock Exch. v. State Tax Comm’n, 429 U.S. 318, 328 (1977), quoting McLeod v. J.E.

2015Corp. v. Tully, 466 U.S. 388, 403 (1984), quoting Boston Stock Exch. v. State Tax Comm’n, 429 U.S. 318, 329 (1977).

2015Corp. v. Tully, 466 U.S. 388, 403 (1984), quoting Boston Stock Exch. v. State Tax Comm’n, 429 U.S. 318, 329 (1977).

2015The dormant commerce clause seeks to prevent economic “Balkanization,” Bacchus Imports, Ltd. v. Dias, 468 U.S. 263, 276 (1984), and to protect “an area of free trade among the several States.” Boston Stock Exch. v. State Tax Comm’n, 429 U.S. 318, 328 (1977), quoting McLeod v. J.E.

2012See Dennis v. Higgins, 498 U.S. 439, 450-451 (1991) (violations of dormant commerce clause included in “rights, privileges, or immunities” protected by § 1983).

2011The dormant commerce clause has been interpreted to prohibit “ ‘differential treatment of in-[S]tate and out-of-[S]tate economic interests that benefits the former and burdens the latter,’ as opposed to [S]tate laws that ‘regulate[ ] evenhandedly with only incidental effects on interstate commerce.’ ” Family Winemakers of Cal. v. Jenkins, 592 F.3d 1, 9 (1st Cir. 2010), quoting Oregon Waste Sys., Inc. v. Department of Envtl.

2011In any event, as detailed infra, where the United States Supreme Court has been called on to discern the congressional intent underlying a Federal law created pursuant to its power under the commerce clause, the Court’s interpretation of that intent has differed depending on whether the adjective modifying “commerce” is “affecting” or “engaging.” Compare Allied-Bruce Terminix Cos. v. Dobson, 513 U.S. 265,277 (1995) (phrase “affecting commerce” indicates congressional intent to use full authority of its commerce clause powers), with Circuit City Stores, Inc. v. Adams, 532 U.S. 105, 115-116 (200

2011In any event, as detailed infra, where the United States Supreme Court has been called on to discern the congressional intent underlying a Federal law created pursuant to its power under the commerce clause, the Court’s interpretation of that intent has differed depending on whether the adjective modifying “commerce” is “affecting” or “engaging.” Compare Allied-Bruce Terminix Cos. v. Dobson, 513 U.S. 265,277 (1995) (phrase “affecting commerce” indicates congressional intent to use full authority of its commerce clause powers), with Circuit City Stores, Inc. v. Adams, 532 U.S. 105, 115-116 (200