commerce clause in Louisiana

2008As the Court in Quill reiterated, a tax will be sustained against a commerce clause challenge so long as it meets the four-part test enunciated in Complete Auto Transit, Inc. v. Brady, 430 U.S. 274, 279 , 97 S.Ct. 1076, 1079 , 51 L.Ed.2d 326 (1977), which requires that the tax is (1) 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.

2008As the Court in Quill reiterated, a tax will be sustained against a commerce clause challenge so long as it meets the four-part test enunciated in Complete Auto Transit, Inc. v. Brady, 430 U.S. 274, 279 , 97 S.Ct. 1076, 1079 , 51 L.Ed.2d 326 (1977), which requires that the tax is (1) 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.

1939Robbins v. Taxing District of Shelby County, 120 U.S. 489 , 7 S.Ct. 592 , 30 L.Ed. 694 ; Caldwell v. State of North Carolina, 187 U.S. 622 , 23 S.Ct. 229 , 47 L.Ed. 336 ; International Text-Book Company v. Pigg, 217 U.S. 91 , 30 S.Ct. 481 , 54 L.Ed. 678 , 27 L.R.A.,N.S., 493, 18 Ann.Cas. 1103; People’s Tobacco Co. v. American Tobacco Co., 246 U.S. 79 , 38 S.Ct. 233 , 62 L.Ed. 587 , Ann.Cas.1918C, 537; Real Silk Hosiery Mills v. City of Portland, 268 U.S. 325 , 45 S.Ct. 525 , 69 L.Ed. 982 ; McClellan v. Pettigrew, 44 La.Ann. 356 , 10 So. 853 ; Pegues v. Ray, 50 La.Ann. 574 , 23 So. 904 ; State

1939Robbins v. Taxing District of Shelby County, 120 U.S. 489 , 7 S.Ct. 592 , 30 L.Ed. 694 ; Caldwell v. State of North Carolina, 187 U.S. 622 , 23 S.Ct. 229 , 47 L.Ed. 336 ; International Text-Book Company v. Pigg, 217 U.S. 91 , 30 S.Ct. 481 , 54 L.Ed. 678 , 27 L.R.A.,N.S., 493, 18 Ann.Cas. 1103; People’s Tobacco Co. v. American Tobacco Co., 246 U.S. 79 , 38 S.Ct. 233 , 62 L.Ed. 587 , Ann.Cas.1918C, 537; Real Silk Hosiery Mills v. City of Portland, 268 U.S. 325 , 45 S.Ct. 525 , 69 L.Ed. 982 ; McClellan v. Pettigrew, 44 La.Ann. 356 , 10 So. 853 ; Pegues v. Ray, 50 La.Ann. 574 , 23 So. 904 ; State

1934The Supreme Court said: “A privilege tax imposed by a state statute Upon residents of that state as merchandise brokers whose business is exclusively confined to soliciting orders from jobbers and wholesale dealers within the state, as agents for nonresident parties, firms, or corporations, for goods to be shipped by such nonresident principals to such jobbers or dealers, is an unconstitutional invasion of the commerce clause of the Constitution of the United States.” This doctrine was approved in Caldwell v. North Carolina, 187 U. S. 622 , 23 S. Ct. 229 , 47 L.

1934The Supreme Court said: “A privilege tax imposed by a state statute Upon residents of that state as merchandise brokers whose business is exclusively confined to soliciting orders from jobbers and wholesale dealers within the state, as agents for nonresident parties, firms, or corporations, for goods to be shipped by such nonresident principals to such jobbers or dealers, is an unconstitutional invasion of the commerce clause of the Constitution of the United States.” This doctrine was approved in Caldwell v. North Carolina, 187 U. S. 622 , 23 S. Ct. 229 , 47 L.

2008Quill, 504 U.S. at 311 , 112 S.Ct. at 1912 . *123 With regard to the "substantial nexus" prong of the Complete Auto Transit test, the Court in Quill maintained the bright-line physical presence requirement in the area of sales and use taxes originally established by National Bellas Hess, Inc. v. Department of Revenue of State of Illinois, 386 U.S. 753 , 87 S.Ct. 1389 , 18 L.Ed.2d 505 (1967).

2008Quill, 504 U.S. at 311 , 112 S.Ct. at 1912 . *123 With regard to the "substantial nexus" prong of the Complete Auto Transit test, the Court in Quill maintained the bright-line physical presence requirement in the area of sales and use taxes originally established by National Bellas Hess, Inc. v. Department of Revenue of State of Illinois, 386 U.S. 753 , 87 S.Ct. 1389 , 18 L.Ed.2d 505 (1967).

2008Accordingly, the question by what test to substantiate the State's 21st Amendment interest against a so-called first-tier Commerce Clause claim is not presented. [9] In *329 the absence of any discrimination, this case at most presents a so-called second-tier Commerce Clause claim: "`When, however, a statute has only indirect effects on interstate commerce and regulates evenhandedly, we have examined whether the State's interest is legitimate and whether the burden on interstate commerce clearly exceeds the local benefits."' Bainbridge, 311 F.3d at 1109 (quoting Brown-Forman Distillers Corp. v

2008Accordingly, the question by what test to substantiate the State's 21st Amendment interest against a so-called first-tier Commerce Clause claim is not presented. [9] In *329 the absence of any discrimination, this case at most presents a so-called second-tier Commerce Clause claim: "`When, however, a statute has only indirect effects on interstate commerce and regulates evenhandedly, we have examined whether the State's interest is legitimate and whether the burden on interstate commerce clearly exceeds the local benefits."' Bainbridge, 311 F.3d at 1109 (quoting Brown-Forman Distillers Corp. v

2006This court discussed both the "taxable moment" doctrine and the Complete Auto, supra, four-prong test in Columbia Gulf v. Broussard, 94-1650 (La.04/10/95), 653 So.2d 522 , a case involving Louisiana's use tax and natural gas. [17] *1242 In Columbia Gulf v. Broussard, 94-1650 (La.04/10/95), 653 So.2d 522 , this court held that natural gas had come to rest in the state and was thus, subject to the state use tax, and that the commerce clause did not preclude imposition of the tax.

2006This court discussed both the "taxable moment" doctrine and the Complete Auto, supra, four-prong test in Columbia Gulf v. Broussard, 94-1650 (La.04/10/95), 653 So.2d 522 , a case involving Louisiana's use tax and natural gas. [17] *1242 In Columbia Gulf v. Broussard, 94-1650 (La.04/10/95), 653 So.2d 522 , this court held that natural gas had come to rest in the state and was thus, subject to the state use tax, and that the commerce clause did not preclude imposition of the tax.

1995Similarly, in Pledger v. Arkla, Inc., 309 Ark. 10 , 827 S.W.2d 126 (1992), cert. denied — U.S. -, 113 S.Ct. 203 , 121 L.Ed.2d 144 (1992), the Arkansas Supreme Court determined that compressor fuel consumed in the state was subject to the state sales tax.

1995Similarly, in Pledger v. Arkla, Inc., 309 Ark. 10 , 827 S.W.2d 126 (1992), cert. denied — U.S. -, 113 S.Ct. 203 , 121 L.Ed.2d 144 (1992), the Arkansas Supreme Court determined that compressor fuel consumed in the state was subject to the state sales tax.

1995Five years later, the case of Spector Motor Service, Inc. v. O'Connor, 340 U.S. 602 , 71 S.Ct. 508 , 95 L.Ed. 573 (1951), reaffirmed Freeman , holding that a tax imposed for the privilege of engaging in interstate commerce is per se a violation of the commerce clause.

1995Five years later, the case of Spector Motor Service, Inc. v. O'Connor, 340 U.S. 602 , 71 S.Ct. 508 , 95 L.Ed. 573 (1951), reaffirmed Freeman , holding that a tax imposed for the privilege of engaging in interstate commerce is per se a violation of the commerce clause.

1995Questar Pipeline v. Tax Com’n, 817 P.2d 316 (Utah 1991), held that gas used by a pipeline company’s Utah compressor stations was subject to the state’s use tax.

1995Questar Pipeline v. Tax Com'n, 817 P.2d 316 (Utah 1991), held that gas used by a pipeline company's Utah compressor stations was subject to the state's use tax.

1995Similarly, in Pledger v. Arkla, Inc., 309 Ark. 10 , 827 S.W.2d 126 (1992), cert. denied — U.S. -, 113 S.Ct. 203 , 121 L.Ed.2d 144 (1992), the Arkansas Supreme Court determined that compressor fuel consumed in the state was subject to the state sales tax.

1995Similarly, in Pledger v. Arkla, Inc., 309 Ark. 10 , 827 S.W.2d 126 (1992), cert. denied — U.S. -, 113 S.Ct. 203 , 121 L.Ed.2d 144 (1992), the Arkansas Supreme Court determined that compressor fuel consumed in the state was subject to the state sales tax.

1995Similarly, in Pledger v. Arkla, Inc., 309 Ark. 10 , 827 S.W.2d 126 (1992), cert. denied — U.S. -, 113 S.Ct. 203 , 121 L.Ed.2d 144 (1992), the Arkansas Supreme Court determined that compressor fuel consumed in the state was subject to the state sales tax.

1995Similarly, in Pledger v. Arkla, Inc., 309 Ark. 10 , 827 S.W.2d 126 (1992), cert. denied — U.S. -, 113 S.Ct. 203 , 121 L.Ed.2d 144 (1992), the Arkansas Supreme Court determined that compressor fuel consumed in the state was subject to the state sales tax.

1979In the recent case of Chicago Bridge & Iron Company v. Cocreham, 317 So.2d 605 (La.1975), the Supreme Court held that "the Louisiana Use Tax as applied to labor and shop overhead of the out of state manufacturer-user is unconstitutional and therefore unenforceable, because violative of the commerce clause of the United States Constitution." During the period from January, 1973, through August, 1975, plaintiff Sperry Rand Corporation had paid without protest the Louisiana Use Tax levied on labor and shop overhead, in the amount of $31,000.00.

1976The Collector further argues that since the cases of Halliburton, and Chicago Bridge & Iron, supra, covered a different audit period from the instant case, their factual determination that an in-state manufacturer-user does not pay taxes on labor, shop overhead on items manufactured at in-state plants is not controlling in this case.

1939Robbins v. Taxing District of Shelby County, 120 U.S. 489 , 7 S.Ct. 592 , 30 L.Ed. 694 ; Caldwell v. State of North Carolina, 187 U.S. 622 , 23 S.Ct. 229 , 47 L.Ed. 336 ; International Text-Book Company v. Pigg, 217 U.S. 91 , 30 S.Ct. 481 , 54 L.Ed. 678 , 27 L.R.A.,N.S., 493, 18 Ann.Cas. 1103; People’s Tobacco Co. v. American Tobacco Co., 246 U.S. 79 , 38 S.Ct. 233 , 62 L.Ed. 587 , Ann.Cas.1918C, 537; Real Silk Hosiery Mills v. City of Portland, 268 U.S. 325 , 45 S.Ct. 525 , 69 L.Ed. 982 ; McClellan v. Pettigrew, 44 La.Ann. 356 , 10 So. 853 ; Pegues v. Ray, 50 La.Ann. 574 , 23 So. 904 ; State

1939Robbins v. Taxing District of Shelby County, 120 U.S. 489 , 7 S.Ct. 592 , 30 L.Ed. 694 ; Caldwell v. State of North Carolina, 187 U.S. 622 , 23 S.Ct. 229 , 47 L.Ed. 336 ; International Text-Book Company v. Pigg, 217 U.S. 91 , 30 S.Ct. 481 , 54 L.Ed. 678 , 27 L.R.A.,N.S., 493, 18 Ann.Cas. 1103; People’s Tobacco Co. v. American Tobacco Co., 246 U.S. 79 , 38 S.Ct. 233 , 62 L.Ed. 587 , Ann.Cas.1918C, 537; Real Silk Hosiery Mills v. City of Portland, 268 U.S. 325 , 45 S.Ct. 525 , 69 L.Ed. 982 ; McClellan v. Pettigrew, 44 La.Ann. 356 , 10 So. 853 ; Pegues v. Ray, 50 La.Ann. 574 , 23 So. 904 ; State

2011Additionally, the taxpayers’ argument based on a potential Commerce Clause claim lacks merit in light of the supreme court’s decision in Transcontinental Gas Pipeline Corp. v. Louisiana Tax Commission, 09-1988 (La.3/16/10), 32 So.3d 199 , concluding that the Louisiana ad valorem tax scheme is not unconstitutional under the Commerce Clause of the U.S. Constitution.

2011Additionally, the taxpayers' argument based on a potential Commerce Clause claim lacks merit in light of the supreme court's decision in Transcontinental Gas Pipeline Corp. v. Louisiana Tax Commission, 09-1988 (La.3/16/10), 32 So.3d 199 , concluding that the Louisiana ad valorem tax scheme is not unconstitutional under the Commerce Clause of the U.S. Constitution.

2010The court examined the ad valorem tax assessment procedures under the Amerada Hess factors: “A state tax discriminates against interstate commerce if it: (1) is facially discriminatory; (2) has a discriminatory intent; or (3) has the effect of unduly burdening interstate commerce.” Id. at 342 .(citing Amerada Hess Corp. v. Director, Division of Taxation, New Jersey Department of the Treasury, 490 U.S. 66 , 109 S.Ct. 1617 , 104 L.Ed.2d 58 (1989)).

2010The court examined the ad valorem tax assessment procedures under the Amerada Hess factors: “A state tax discriminates against interstate commerce if it: (1) is facially discriminatory; (2) has a discriminatory intent; or (3) has the effect of unduly burdening interstate commerce.” Id. at 342 .(citing Amerada Hess Corp. v. Director, Division of Taxation, New Jersey Department of the Treasury, 490 U.S. 66 , 109 S.Ct. 1617 , 104 L.Ed.2d 58 (1989)).

2010This legitimate clas- sifieation would indeed be unconstitutional if the classification and subsequent tax served to burden interstate commerce, however, in this case, the plaintiffs have not overcome the presumption of validity, as the plaintiffs failed to show the tax scheme in practical effect actually serves to place any burden whatsoever on interstate commerce. 128The United States Supreme Court, in General Motors Corp. v. Tracy, upheld an Ohio tax against a Commerce Clause challenge from out-of-state independent marketers of natural gas alleging that tax exemptions granted to local distr

2010This legitimate clas- sifieation would indeed be unconstitutional if the classification and subsequent tax served to burden interstate commerce, however, in this case, the plaintiffs have not overcome the presumption of validity, as the plaintiffs failed to show the tax scheme in practical effect actually serves to place any burden whatsoever on interstate commerce. 128The United States Supreme Court, in General Motors Corp. v. Tracy, upheld an Ohio tax against a Commerce Clause challenge from out-of-state independent marketers of natural gas alleging that tax exemptions granted to local distr

2010The court of appeal stated, “All parties agree that the natural gas pipeline companies operating in Louisiana, both those operating intrastate and interstate, are direct competitors and similarly situated; therefore, dormant Commerce Clause analysis is appropriate.” Transcontinental Gas Pipe Line Corp., et al. v. Louisiana Tax Commission, et al., 09-0628 (La.App. 1 Cir. 8/10/09) , 23 So.3d 329, 340 .

2010The court of appeal stated, "All parties agree that the natural gas pipeline companies operating in Louisiana, both those operating intrastate and interstate, are direct competitors and similarly situated; therefore, dormant Commerce Clause analysis is appropriate." Transcontinental Gas Pipe Line Corp., et al. v. Louisiana Tax Commission, et al., 09-0628 (La.App. 1 Cir. 8/10/09) , 23 So.3d 329, 340 .

2008Quill, 504 U.S. at 311 , 112 S.Ct. at 1912 . *123 With regard to the "substantial nexus" prong of the Complete Auto Transit test, the Court in Quill maintained the bright-line physical presence requirement in the area of sales and use taxes originally established by National Bellas Hess, Inc. v. Department of Revenue of State of Illinois, 386 U.S. 753 , 87 S.Ct. 1389 , 18 L.Ed.2d 505 (1967).

2008Quill, 504 U.S. at 311 , 112 S.Ct. at 1912 . *123 With regard to the "substantial nexus" prong of the Complete Auto Transit test, the Court in Quill maintained the bright-line physical presence requirement in the area of sales and use taxes originally established by National Bellas Hess, Inc. v. Department of Revenue of State of Illinois, 386 U.S. 753 , 87 S.Ct. 1389 , 18 L.Ed.2d 505 (1967).

2008MBNA America *127 Bank, 640 S.E.2d at 234 .

2008MBNA America *127 Bank, 640 S.E.2d at 234 .

2008See Bridges v. Autozone Properties, Inc., 04-0814 (La.3/24/05), 900 So.2d 784 (wherein the court followed the Due Process analysis articulated in Quill and determined that Louisiana had personal jurisdiction over a nonresident shareholder when Louisiana has provided benefits, opportunities, and protections, which helped to create the income); Kevin Associates, L.L.C. v. Crawford, 03-0211 (La. 1/30/04), 865 So.2d 34 (following Quill and determining that imposition of corporate income and franchise tax on a corporation that had a commercial domicile in Louisiana did not violate the Due Process a

2008See Bridges v. Autozone Properties, Inc., 04-0814 (La.3/24/05), 900 So.2d 784 (wherein the court followed the Due Process analysis articulated in Quill and determined that Louisiana had personal jurisdiction over a nonresident shareholder when Louisiana has provided benefits, opportunities, and protections, which helped to create the income); Kevin Associates, L.L.C. v. Crawford, 03-0211 (La. 1/30/04), 865 So.2d 34 (following Quill and determining that imposition of corporate income and franchise tax on a corporation that had a commercial domicile in Louisiana did not violate the Due Process a

2008Accordingly, the question by what test to substantiate the State's 21st Amendment interest against a so-called first-tier Commerce Clause claim is not presented. [9] In *329 the absence of any discrimination, this case at most presents a so-called second-tier Commerce Clause claim: "`When, however, a statute has only indirect effects on interstate commerce and regulates evenhandedly, we have examined whether the State's interest is legitimate and whether the burden on interstate commerce clearly exceeds the local benefits."' Bainbridge, 311 F.3d at 1109 (quoting Brown-Forman Distillers Corp. v

2008Accordingly, the question by what test to substantiate the State's 21st Amendment interest against a so-called first-tier Commerce Clause claim is not presented. [9] In *329 the absence of any discrimination, this case at most presents a so-called second-tier Commerce Clause claim: "`When, however, a statute has only indirect effects on interstate commerce and regulates evenhandedly, we have examined whether the State's interest is legitimate and whether the burden on interstate commerce clearly exceeds the local benefits."' Bainbridge, 311 F.3d at 1109 (quoting Brown-Forman Distillers Corp. v

2005In McKesson Corp. v. Div. of Alcoholic Beverages and Tobacco, Dept. of Business Regulation of Fl., 496 U.S. 18, 40-41 , 110 S.Ct. 2238, 2252 , 110 L.Ed.2d 17 (1990), wholesale liquor distributors filed suit, challenging the Florida excise tax that gave preferential treatment to beverages that were manufactured from Florida-grown citrus and other agricultural crops and bottled in state.

2005In McKesson Corp. v. Div. of Alcoholic Beverages and Tobacco, Dept. of Business Regulation of Fl., 496 U.S. 18, 40-41 , 110 S.Ct. 2238, 2252 , 110 L.Ed.2d 17 (1990), wholesale liquor distributors filed suit, challenging the Florida excise tax that gave preferential treatment to beverages that were manufactured from Florida-grown citrus and other agricultural crops and bottled in state.

2005Bridges v. Autozone Properties, XXXX-XXXX (La.App. 1st Cir.1/5/04), 873 So.2d 25 , 28 n. 2.

2004Following an appeal to the Louisiana First Circuit Court of Appeal, we determined that “a taxpayer who pays his taxes under protest, thereby creating a justicia-ble controversy, may choose to ask the district court for a declaratory judgment on constitutional issues without waiting for a final adjudication by the Commission.” ANR Pipeline Company v. Louisiana Tax Commission, 2001-2594, 2001-2595, 2001-2599, 2001-2597, 2001-2598, 2001-2596, p. 10 (La.App. 1 Cir. 3/20/02), 815 So.2d 178, 186 , writ granted, 2002-1479 (La.3/21/03), 840 So.2d 527 (affirmed and remanded). 2 Thereafter, the portion