internal consistency test in Pennsylvania

2023See Armco Inc., 467 U.S. at 644 (commingling consideration of the internal consistency test and the discrimination prong of the Complete Auto test because “[a] tax that unfairly apportions income from other States is a form of discrimination against interstate commerce”); see also City’s Brief at 25-26 (advocating that the discrimination and fair apportionment prongs of the Complete Auto test merge). [J-5A-B-2023] - 30 Additionally, we find that the Philadelphia Tax meets Complete Auto’s external consistency test, which examines “the economic justification for the State’s claim upon the value

2023See Armco Inc., 467 U.S. at 644 (commingling consideration of the internal consistency test and the discrimination prong of the Complete Auto test because “[a] tax that unfairly apportions income from other States is a form of discrimination against interstate commerce”); see also City’s Brief at 25-26 (advocating that the discrimination and fair apportionment prongs of the Complete Auto test merge). [J-5A-B-2023] - 30 Additionally, we find that the Philadelphia Tax meets Complete Auto’s external consistency test, which examines “the economic justification for the State’s claim upon the value

2023In this regard, Appellant correctly acknowledges that, under the internal consistency test, we must “assume that every state/local government enacts the same tax regime,” and determine “whether such hypothetical harmonization imposes a greater burden upon interstate commerce than is imposed upon intrastate commerce.” Id. at 36 (citing Goldberg v. Sweet, 488 U.S. 252, 261 (1989)).

2023In this regard, Appellant correctly acknowledges that, under the internal consistency test, we must “assume that every state/local government enacts the same tax regime,” and determine “whether such hypothetical harmonization imposes a greater burden upon interstate commerce than is imposed upon intrastate commerce.” Id. at 36 (citing Goldberg v. Sweet, 488 U.S. 252, 261 (1989)).

2023Turning to Complete Auto, the Wynne Court observed that the internal consistency test “allows courts to isolate the effect of a defendant State’s tax scheme” by “hypothetically assuming that every State has the same tax structure.” Wynne, 575 U.S. at 562 .

2023Moreover, PDOR notes that the Wynne Court “endorse[d] the ability of a resident state to tax all of its resident’s income, so long as it does not run afoul of the internal consistency test.” PDOR’s Brief at 14 (emphasis omitted) (citing Wynne, 575 U.S. at 566-68 ).

2023Accordingly, when the internal consistency test is properly applied to the Philadelphia Tax and the PIT, along with the corresponding tax credits permitted by the City and the Commonwealth, it is evident that any remaining “disparate incentives to engage in interstate commerce” stem solely from “the interaction of two different but nondiscriminatory and internally consistent schemes.” Id. at 562 (citations omitted); see Steiner, 449 P.3d at 197 (finding that, because Utah offered a tax credit for out-of-state taxes, it was internally consistent and compatible with Wynne); Goggin v. State Tax A

2023Accordingly, when the internal consistency test is properly applied to the Philadelphia Tax and the PIT, along with the corresponding tax credits permitted by the City and the Commonwealth, it is evident that any remaining “disparate incentives to engage in interstate commerce” stem solely from “the interaction of two different but nondiscriminatory and internally consistent schemes.” Id. at 562 (citations omitted); see Steiner, 449 P.3d at 197 (finding that, because Utah offered a tax credit for out-of-state taxes, it was internally consistent and compatible with Wynne); Goggin v. State Tax A

2023See Armco Inc., 467 U.S. at 644 (commingling consideration of the internal consistency test and the discrimination prong of the Complete Auto test because “[a] tax that unfairly apportions income from other States is a form of discrimination against interstate commerce”); see also City’s Brief at 25-26 (advocating that the discrimination and fair apportionment prongs of the Complete Auto test merge). [J-5A-B-2023] - 30 Additionally, we find that the Philadelphia Tax meets Complete Auto’s external consistency test, which examines “the economic justification for the State’s claim upon the value

2023See Armco Inc., 467 U.S. at 644 (commingling consideration of the internal consistency test and the discrimination prong of the Complete Auto test because “[a] tax that unfairly apportions income from other States is a form of discrimination against interstate commerce”); see also City’s Brief at 25-26 (advocating that the discrimination and fair apportionment prongs of the Complete Auto test merge). [J-5A-B-2023] - 30 Additionally, we find that the Philadelphia Tax meets Complete Auto’s external consistency test, which examines “the economic justification for the State’s claim upon the value

2023See id. at 11 (citing Hunter v. City of Pittsburgh, 207 U.S. 161, 178-79 (1907) (“Municipal corporations are political subdivisions of the state, created as convenient agencies for exercising such of the governmental powers of the state as may be instructed by them.”)). [J-5A-2023 and J-5B-2023] [MO: Todd, C.J.] - 9 Zilka relies upon the scholarship of University of Georgia Law School professor Walter Hellerstein, who argues that the internal consistency test requires courts to evaluate the total aggregate state and local tax burden in Commerce Clause cases, since all taxes in some sense are “

2023See id. at 11 (citing Hunter v. City of Pittsburgh, 207 U.S. 161, 178-79 (1907) (“Municipal corporations are political subdivisions of the state, created as convenient agencies for exercising such of the governmental powers of the state as may be instructed by them.”)). [J-5A-2023 and J-5B-2023] [MO: Todd, C.J.] - 9 Zilka relies upon the scholarship of University of Georgia Law School professor Walter Hellerstein, who argues that the internal consistency test requires courts to evaluate the total aggregate state and local tax burden in Commerce Clause cases, since all taxes in some sense are “

2023See id. at 11 (citing Hunter v. City of Pittsburgh, 207 U.S. 161, 178-79 (1907) (“Municipal corporations are political subdivisions of the state, created as convenient agencies for exercising such of the governmental powers of the state as may be instructed by them.”)). [J-5A-2023 and J-5B-2023] [MO: Todd, C.J.] - 9 Zilka relies upon the scholarship of University of Georgia Law School professor Walter Hellerstein, who argues that the internal consistency test requires courts to evaluate the total aggregate state and local tax burden in Commerce Clause cases, since all taxes in some sense are “

2023See id. at 11 (citing Hunter v. City of Pittsburgh, 207 U.S. 161, 178-79 (1907) (“Municipal corporations are political subdivisions of the state, created as convenient agencies for exercising such of the governmental powers of the state as may be instructed by them.”)). [J-5A-2023 and J-5B-2023] [MO: Todd, C.J.] - 9 Zilka relies upon the scholarship of University of Georgia Law School professor Walter Hellerstein, who argues that the internal consistency test requires courts to evaluate the total aggregate state and local tax burden in Commerce Clause cases, since all taxes in some sense are “

2023Indeed, applying the internal consistency test to Maryland’s tax scheme, the Court assumed that all states adopted the following taxes, consistent with Maryland’s county and special nonresident taxes: “(1) a 1.25% tax on income that residents earn in State, (2) a 1.25% tax on income that residents earn in other jurisdictions, and (3) a 1.25% tax on income that nonresidents earn in State.”2 Id. at 564- 65.

2023Indeed, applying the internal consistency test to Maryland’s tax scheme, the Court assumed that all states adopted the following taxes, consistent with Maryland’s county and special nonresident taxes: “(1) a 1.25% tax on income that residents earn in State, (2) a 1.25% tax on income that residents earn in other jurisdictions, and (3) a 1.25% tax on income that nonresidents earn in State.”2 Id. at 564- 65.

2022See Jefferson Lines, 514 U.S. at 185; Goldberg, 488 U.S. at 262 ; see also Tyler Pipe Industries, Inc. v. Washington State Department of Revenue, 483 U.S. 232 , 245 n.13 (1987) (noting that “[m]any States provide tax credits that alleviate or eliminate the potential multiple taxation that results when two or more sovereigns have jurisdiction to tax parts of the same chain of commercial events”).

2002DuPont de Nemours & Co. v. State Tax Assessor, 675 A.2d 82, 89 (Me.1996), overruling Tambrands, Inc. v. State Tax Assessor, 595 A.2d 1039 (Me.1991) (Tam-brands held that a taxing scheme analogous to the one at issue here failed the internal consistency test, but DuPont rejected that analysis.

2002DuPont de Nemours & Co. v. State Tax Assessor, 675 A.2d 82, 89 (Me.1996), overruling Tambrands, Inc. v. State Tax Assessor, 595 A.2d 1039 (Me. 1991) ( Tambrands held that a taxing scheme analogous to the one at issue here failed the internal consistency test, but DuPont rejected that analysis.

2002Compare Container Corp., . 463 U.S. at 181 , 103 S.Ct. at 2948 (rejecting a claim of alleged unconstitutional distortion where the taxpayer’s baseline figures were founded upon an accounting method suffering from basic theoretical weaknesses) and Moonnan, 437 U.S. at 272, 276 , 98 S.Ct. at 2344, 2346 (denying relief in part because taxpayer failed to proffer figures representing the actual profitability of in-state sales subject to the challenged tax) with Hans Rees', 283 U.S. at 134-36 , 51 S.Ct. at 389 (providing relief where, although the apportioning methodology was facially sound, the tax

2002Compare Container Corp., . 463 U.S. at 181 , 103 S.Ct. at 2948 (rejecting a claim of alleged unconstitutional distortion where the taxpayer’s baseline figures were founded upon an accounting method suffering from basic theoretical weaknesses) and Moonnan, 437 U.S. at 272, 276 , 98 S.Ct. at 2344, 2346 (denying relief in part because taxpayer failed to proffer figures representing the actual profitability of in-state sales subject to the challenged tax) with Hans Rees', 283 U.S. at 134-36 , 51 S.Ct. at 389 (providing relief where, although the apportioning methodology was facially sound, the tax

2002See Container Corp., 463 U.S. at 169 , 103 S.Ct. at 2942 (recognizing that the internal consistency standard is satisfied where the formula, if applied by every jurisdiction ... would result in no more than all of the unitary business’s income being taxed).

2002See Container Corp., 463 U.S. at 169 , 103 S.Ct. at 2942 (recognizing that the internal consistency standard is satisfied where the formula, if applied by every jurisdiction ... would result in no more than all of the unitary business’s income being taxed).