commerce clause in Massachusetts

2017The claim is that application of the statute’s single-factor apportionment formula to the company, in combination with the unavailability of what it refers to as the Commonwealth’s “manufacturing credits,” 13 creates a discriminatory and unfair tax burden that contravenes the commerce clause test set out in Complete Auto Transit, Inc. v. Brady, 430 U.S. 274, 279 (1977).

2017Genentech claims, however, that the single-factor apportionment formula in § 38 (/), as applied to it, rebuts this presumption of validity because it violates the commerce clause test established in the Complete Auto Transit case, 430 U.S. at 279 , insofar as the formula is (1) discriminatory in relation to interstate commerce; (2) not fairly apportioned in relation to the extent of Genentech’s activities in Massachusetts; and (3) not “fairly related to the services provided by the State.” Id.

1993On the other hand, if the pricing order has only indirect or incidental effects on interstate commerce, it will be found to violate the commerce clause only if the burdens imposed on interstate commerce are “clearly excessive in relation to the putative local benefits.” Maine v. Taylor, supra at 138 , quoting Pike v. Bruce Church, Inc., 397 U.S. 137, 142 (1970).

1993On the other hand, if the pricing order has only indirect or incidental effects on interstate commerce, it will be found to violate the commerce clause only if the burdens imposed on interstate commerce are "clearly excessive in relation to the putative local benefits." Maine v. Taylor, supra at 138 , quoting Pike v. Bruce Church, Inc., 397 U.S. 137, 142 (1970).

2017See New Energy Co. of Ind., 486 U.S. at 278 (“The Commerce Clause does not prohibit all state action designed to give its residents an advantage in the marketplace, but only action of that description in connection with the State's regulation of interstate commerce.

1995New Energy Co. of Ind. v. Limbach, 486 U.S. 269, 278 (1988).

2009Twenty-five years later, the United States Supreme Court reaffirmed in Quill, supra at 317-318 , that, with respect to the imposition of sales and use taxes, the constitutionally sustainable measure of contact required for substantial nexus under the commerce clause was “physical presence” in the taxing State.

2009Wire transfers of money involving billions of dollars occur every day; purchasers place orders with sellers by fax, phone, and computer linkup; sellers ship goods by air, road, and sea through sundry delivery services without leaving their place of business. . . . [A]n out-of-state direct marketer derives numerous commercial benefits from the State in which it does business [and the Court should not, under the commerce clause,] attempt to justify an anachronistic notion of physical presence in economic terms.” Quill, supra at 327-328 (White, J., concurring in part and dissenting in part).

2011“The United States Supreme Court has consistently held that the commerce clause includes ‘a further, negative command, known as the dormant Commerce Clause.’ ” Capital One Bank v. Commissioner of Revenue, 453 Mass. 1, 9-10 , cert. denied, 129 S. Ct. 2827 (2009), quoting Oklahoma Tax Comm’n v. Jefferson Lines, Inc., 514 U.S. 175, 179 (1995).

2009The United States Supreme Court has consistently held that the commerce clause includes “a further, negative command, known as the dormant Commerce Clause, prohibiting certain state taxation even when Congress has failed to legislate on the subject.” Oklahoma Tax Comm’n v. Jefferson Lines, Inc., 514 U.S. 175, 179 (1995).

1993It is long established that, while a literal reading of the commerce clause evinces a grant of power to Congress, it “directly limits the power of the States to discriminate against interstate commerce.” Wyoming v. Oklahoma, 502 U.S. 437, 454 (1992).

1993The commerce clause “directly limits the power of the States to discriminate against interstate commerce.” West Lynn Creamery Inc. v. Commissioner of the Department of Food & Agriculture, 415 Mass. 8, 14 (1993) (quoting Wyoming v. Oklahoma, 112 S.Ct. 789, 800 (1992)).

2022The commerce clause extends beyond activities within the flow of interstate commerce, see Allied-Bruce Terminix Cos., 513 U.S. at 273 , and "'may be exercised in individual cases without showing any specific effect upon interstate commerce' if in the aggregate the Page 113 economic activity in question would represent 'a general practice . . . subject to federal control,'" Citizens Bank v. Alafabco, Inc., 539 U.S. 52, 56-57 (2003), quoting Mandeville Island Farms, Inc. v. American Crystal Sugar Co., 334 U.S. 219, 236 (1948).

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

2017See Boston Stock Exch., 429 U.S. at 337 (State may not “discriminatorily tax the products manufactured or the business operations performed in any other State”); id. at 332 n.12 (State ‘“may not discriminate between transactions on the basis of some interstate element”).

1982The commerce clause was intended to create “an area of trade free from interference by the States.” Boston Stock Exch. v. State Tax Comm’n, 429 U.S. 318, 328 (1977), quoting from Freeman v. Hewit, 329 U.S. 249, 252 (1946).

2015See Container Corp. of Am. v. Franchise Tax Bd., 463 U.S. at 169 ; Exxon Corp. v. Department of Revenue, 447 U.S. 207, 219, 227-228 (1980); Gillette Co. v. Commissioner of Revenue, 425 Mass. at 680 .

2005Under the commerce clause, an apportionment formula must “also not result in discrimination against interstate or foreign commerce.” Container Corp. of Am. v. Franchise Tax Bd., 463 U.S. 159, 170 (1983).

2012See, e.g., Western Live Stock v. Bureau of Revenue, 303 U.S. 250, 254 (1938).

2001See Complete Auto Transit, Inc. v. Brady, supra at 279 , quoting Western Live Stock v. Bureau of Revenue, 303 U.S. 250, 254 (1938) (“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”).

2009A State’s ability to tax businesses like the Capital banks, that operate in interstate commerce, “is constrained by the Federal government’s broad power to regulate interstate commerce under the commerce clause.” 14 Aloha Freightways, Inc. v. Commissioner of Revenue, 428 Mass. 418, 421 (1998).

2005“A State tax will be upheld ‘against [a] Commerce Clause challenge when the tax is applied to an activity with a substantial nexus with the taxing State, is fairly apportioned, does not discriminate against interstate commerce, and is fairly related to the services provided by the State.’ ” Aloha Freightways, Inc. v. Commissioner of Revenue, 428 Mass. 418, 421 (1998), quoting Complete Auto Transit, Inc. v. Brady, 430 U.S. 274, 279 (1977).

2007Moreover, the commerce clause is “also intended to benefit those [individuals] who . . . are engaged in interstate commerce.” Dennis v. Higgins, 498 U.S. 439, 449 (1991).

1993Dennis v. Higgins, 498 U.S. 439, 451 (1991).

2003Kennametal, Inc. v. Commissioner of Revenue, 426 Mass. 39, 41 (1997), cert. denied, 523 U.S. 1059 (1998).

1998See Kennametal, Inc. v. Commissioner of Revenue, 426 Mass. 39, 41 (1997), cert. denied, 118 S. Ct. 1386 (1998); Heublein, Inc. v. South Carolina Tax Comm’n, 409 U.S. 275, 279-281 (1972).

2001Quality, 511 U.S. 93, 98 (1994).

1995Quality, 114 S. Ct. 1345, 1349 (1994).

2000See, e.g., Healy, 491 U.S. at 326 (Connecticut statute); Brown-Forman Distillers Corp., 476 U.S. at 584 (New York statute), Kassel v. Consolidated Freightways Corp. of Delaware, 450 U.S. 662, 679 (1981) (Iowa statute); Hughes v. Oklahoma, 441 U.S. 322, 323 (1979) (Oklahoma statute); Hunt v. Washington State Apple Adver.

2000See, e.g., Healy, 491 U.S. at 326 (Connecticut statute); Brown-Forman Distillers Corp., 476 U.S. at 584 (New York statute), Kassel v. Consolidated Freightways Corp. of Delaware, 450 U.S. 662, 679 (1981) (Iowa statute); Hughes v. Oklahoma, 441 U.S. 322, 323 (1979) (Oklahoma statute); Hunt v. Washington State Apple Adver.

1978The parties take off in their arguments from the test of the validity of State legislation in relation to the commerce clause which is announced in Pike v. Bruce Church, Inc., 397 U.S. 137, 142 (1970): "Where the statute regulates evenhandedly to effectuate a legitimate local public interest, and its effects on interstate commerce are only incidental, it will be upheld unless the burden imposed on such commerce is clearly excessive in relation to the putative local benefits.” See, to the same effect, Mobil Oil Corp. v. Attorney Gen., 361 Mass. 401, 412 (1972).

1976Mobil Oil Corp. v. Attorney Gen., 361 Mass. 401, 412 (1972).

2016American Trucking Ass’ns, 483 U.S. at 283 n.15. 5 Regency “seeks to use the commerce clause of the United States Constitution not as protection against multiple or discriminatory taxation, but as an escape from any taxation at all.

1993The Supreme Court struck down both fees because the methods by which they were assessed had the effect of placing a greater economic burden on out-of-State trucks than on local trucks in violation of the commerce clause. 10 Id. at 296 .

1997The commerce clause is violated when a statute or regulation discriminates against out-of-state goods or services, see Maine v. Taylor, 477 U.S. 131, 138 (1986), or imposes a burden on interstate commerce that is greater than the local benefit the statute or regulation provides.

1993On the other hand, if the pricing order has only indirect or incidental effects on interstate commerce, it will be found to violate the commerce clause only if the burdens imposed on interstate commerce are “clearly excessive in relation to the putative local benefits.” Maine v. Taylor, supra at 138 , quoting Pike v. Bruce Church, Inc., 397 U.S. 137, 142 (1970).

2009The very purpose of the commerce clause, the Court stated, “was to ensure a national economy free from such unjustifiable local entanglements.” Id. at 760 .

2009L. c. 63, § 39, for the tax years at issue comported with the commerce clause. 10 Geoffrey also contends that the board erred in failing to abate the assessed penalties where the United States Supreme Court’s decisions in National Bellas Hess, Inc. v. Department of Revenue of Ill., 386 U.S. 753, 758-760 (1967), and Quill, supra, gave Geoffrey reasonable cause to believe that, in the absence of a physical presence in the Commonwealth, it was not subject to Massachusetts corporate excise taxes.

2001The board concluded that the commissioner, in issuing the directive, had interpreted the corporate excise statutes in a manner that avoided potential constitutional issues and that conformed to the judicial guidance expressed in our decision in Perini Corp. v. Commissioner of Revenue, 419 Mass. 763 , cert, denied, 516 U.S. 822 (1995) (examining constitutionality under the commerce clause of other provisions of § 30 [8] and [9]), and the recommendations of a single justice of this court made pursuant to the rescript in that decision as to the proper remedy.

2001In Perini Corp. v. Commissioner of Revenue, supra, this court addressed the constitutionality of two deductions used in computing the taxable net worth of domestic and foreign intangible property corporations and concluded that the challenged deductions, in italics above, discriminated against interstate commerce in violation of the commerce clause of the United States Constitution.

2000See, e.g., Healy, 491 U.S. at 326 (Connecticut statute); Brown-Forman Distillers Corp., 476 U.S. at 584 (New York statute), Kassel v. Consolidated Freightways Corp. of Delaware, 450 U.S. 662, 679 (1981) (Iowa statute); Hughes v. Oklahoma, 441 U.S. 322, 323 (1979) (Oklahoma statute); Hunt v. Washington State Apple Adver.

1995In Healy v. Beer Inst., Inc., 491 U.S. 324, 326 (1989), a Connecticut statute requiring out-of-State shippers of beer to affirm that their posted prices for products sold to Connecticut wholesalers were no higher than the prices at which those products were sold in bordering States, was struck down as violative of the commerce clause.

1984The Board of Bar Examiners *228 may, in its discretion, excuse the applicant from taking the regular law examination on the applicant’s compliance with the following conditions: “6.1.1 The applicant’s principal residence is in the Commonwealth of Massachusetts.” 2 We shall not discuss his claim based on the commerce clause in part because his rights probably would be no greater under the commerce clause than under the privileges and immunities clause, given “their common origin in the Fourth Article of the Articles of Confederation and their shared vision of federalism.” Hicklin v. Orbeck, 437

1981The commerce clause cases suggest that Alaska might quite properly have preferred its own residents in granting initial leases on its oil land, but Hicklin, supra, leaves no question that the extension of this power to favor absolutely all State residents in employment was unacceptable.

1982Although the purpose of the deduction at issue here is not necessarily controlling in deciding whether there is a violation of the commerce clause, see Philadelphia v. New Jersey, 437 U.S. 617, 626-627 (1978), we note that the avowed statutory intent is to avoid double taxation of real estate, property owners being subject to local real estate taxation. 12 Originally, the deduction applied only to loans made in Massachusetts, because the State’s mutual banks had no power to make loans outside the State.

1978Similar issues were dealt with recently in Philadelphia v. New Jersey, 437 U.S. 617 (1978), where New Jersey was held forbidden by the commerce clause to promote its "economic isolation” (at 623-624) through stopping the importation of solid and liquid wastes.

2022The commerce clause extends beyond activities within the flow of interstate commerce, see Allied-Bruce Terminix Cos., 513 U.S. at 273 , and "'may be exercised in individual cases without showing any specific effect upon interstate commerce' if in the aggregate the Page 113 economic activity in question would represent 'a general practice . . . subject to federal control,'" Citizens Bank v. Alafabco, Inc., 539 U.S. 52, 56-57 (2003), quoting Mandeville Island Farms, Inc. v. American Crystal Sugar Co., 334 U.S. 219, 236 (1948).

2022The commerce clause extends beyond activities within the flow of interstate commerce, see Allied-Bruce Terminix Cos., 513 U.S. at 273 , and "'may be exercised in individual cases without showing any specific effect upon interstate commerce' if in the aggregate the Page 113 economic activity in question would represent 'a general practice . . . subject to federal control,'" Citizens Bank v. Alafabco, Inc., 539 U.S. 52, 56-57 (2003), quoting Mandeville Island Farms, Inc. v. American Crystal Sugar Co., 334 U.S. 219, 236 (1948).

2020State rules that affect interstate commerce but do not discriminate --------------------------- [22] "The commerce clause provides that 'congress shall have power ... to regulate commerce ... among the several States.'" Murphy v. Massachusetts Turnpike Auth., 462 Mass. 701, 711-712 (2012), quoting U.S. Const., Art.