november of two thousand and eighteen the manufacturers the accountants the attorneys met and it was a it was a rigorous process the regulations came out in happened here in the virgin islands is manufacturers that were manufacturing actually on within the territory the bulk of them received exam shifts and because very small mom and pop operations very very small in numbers so i it was not a question of of delay or avoidance of the of the statu i will just in response to the generation of revenue which is as clearly and as you know overwhelming interest for the for the government that's weeks to how few local that's right so with resent with respect to excise tax i think they the i r b had following this ruling by the lower court and all the things they did to try to get these rules and regulations in place it came up with there were one hundred and forty two local manufacturers of that i don't have the exact number but only a small number would actually be paying excise tax and then  of that the amount of excise tax would be negligible i mean i think in terms of i just had to ask how much excise tax was lost to territory just in terms of this injunction through december st two thousand and nineteen and that amount was forty seven million four hundred and forty two thousand one hundred and ninety four dollars and eighty one cen go to the pre regulation question you know and if i can i just need a minute because i learned yesterday that in just in case the court is not up to speed as as well on friday the lower court legislature promulgated in february of this year on friday the lower court issued a ruling whereby they proclaimed that the new rules and regulations were unconstitutional  of the order issued by the lower court decisions to be mass confusion as to what the rules and regulations stated in terms of how and why these excise taxes would be collected effect right and if you read the order by the lower court determines that the rules and regulations were proposed like a proposal and it's almost as if it's given to opinion as to whether that constitutional or not which is not in fact the case these are legally promulgated rules or regulations for the territory by the territory in accordance with the law  testified twice though if we're talking about the april testimony he may have been talking about these new regulations that we were unable to enforce but mr hyde testified as to the methods and just the background work that went into arriving at this system for taxing local manufacturers because you know here it's a  little different than the normal cases they have to do with you know coming in because it really is just importers versus local manufacturers if you will right so it has nothing to do with outside manufacturers it really is people who import for resale or for use for business purposes and also people who manufacture locally both placing these items in the stream of commerce and then the background as to when to apply the tax when they go into the stream of commerce took a lot of time because the loquats proposal and of the actually at the time  was considered in them rejected because when we ran it through there was a double taxation going on because people were taxed at the time of import and taxed again at the time of sale and it was at quibble with the people who merely imported and utilized or imported in then resold so it took a lot of the background back and forth in order to get these cost place sale price value prize all melded together and they're not the same under the current state of affairs and if we were to all of the district or no sales the order it would seem that it would have to be yet another round of of of motions i guess to try and see whether these new or amended revenue regulations could be  in compliance with what the lower courts wants however i will know that visor a opinion is just improper and because the rules and regulations were never put into effect the local court never even had an opportunity to try and iron out the methodology which is normally what would take place and that's what the supreme court always repeatedly as held regulations put in front of the district court congress that was not our requests it was the lower court essentially say you must come to me and present me with rules and regulations and i will of whether these are adequate it was never the intent of the government to have to somehow get it in visor you opinion before it can issue rules or regulations that comport with with all the tenets of the commerce courts the agency itself because the bureau you  know what methods for taxation is not easy and so the bureau through rigorous meetings and and back and forth with various manufacturers with the importers with the attorneys with the account came up with the system and the confusion that seem to have come out of it being put before the lower court without maybe the same expertise and without the deference that is normally given to  agency particularly agency with such specific knowledge i i think brings this problem or more to light also the timing  as i mentioned this motion was our original motion to lift the injunction was done in november the rules or regulations after following me back up following the motion that was done in november the the local it was kept abreast of the procedure that was going on told of the meetings that were taking place told of the various options that were being considered and there was no movement then after know to say look these are the rules or regulations pursuant to your order in november please let the injunction that motion is still open there was no response and then in fact in september of this year was taken effect and now we just seek to have the rules or regulations put into effect the injunction lifted and excise taxes able to  exactly i don't know frankly the term actually means our purposes right now we have an appeal before ok i was issues that have been specifically raised what you indicate tension in advance of today's argument that said let's get to the issues that are supposedly that are in fact directly before us the most important of which is the so many ways the albeit under the revised organic acts are empowers or are given to the territory through an act of congress but in so many ways  the rules or regulations at this point have been promulgated they are promulgated and the matter that is even handed and sought to deal with importers and local manufacturers and even in so i don't know really if if i understand that within this circuit yes that that is the law but it does seem that there are variations on how the territory can to find clauses and rights that apply here but again  result we have before us whether or not the district work properly declare the statute waive being enforced by the territory as whether complied commerce clause we still have a live commerce clause that's correct right but with respect to that monetary judgment whether or not the commerce clause apply the argument on the half of the government is that the money that was paid with respect to the excise tax was baked in the cake so to speak because that money as as a non end user that money was rolled into the cost charged by the business to whom ever the record was in the within the record i think all it was limited and what then the record all i was all i can recall are just receipts for excise taxes they didn't seem to be any inquiry done about it still asking that the injunction be lifted that the rules and regulations be placed into effect and that the territory be permitted to collect excise taxes i believe that that is proper on a number of grounds the fires not only that the rules or regulations cooper fully with the commerce clause but also that and invite opinion as said constitutionality of rules and regulations is just improper and we all know that is a very very basic proposition constitutional law we haven't even heard from your adversary yet but let me say this right now we're going to direct  to submit supplemental memoranda addressing the recent decision by the district court and what it said and how if in any way he changes shifts the playing field in this case for our purposes so we'll have you back on at stake and because of the strong newsworthiness the legal questions here actually quite routine what we have here is a precedent of over a quarter century of age that the government in this case of attempting to disturb which says that commerce clause principles of commerce clause doctrine are binding upon the government of the united states virgin islands that the district court do i recall correctly did not even really address derived from from the presidential pin and polychrome and it relied on the j d s opinion to the extent that it was persuasive because that focused on the excise tax in particularly and those commerce clause principles themselves are discrimination and so as the court hearing j d s said it it's just as clear cut as you can come in terms of what constitutes discrimination there are only two ways that the government could justif to say we're you know there's revenue generation at stake which is not a valid local local interest in of itself but here because they were actually acting or not acting in the teeth of the territorial law there couldn't even be a legislative purpose behind this particular policy for them to defend so the other way that they could possibly justify this discrimination the commerce clause is to show congressional consent to the particularly discrimination that is that is occurring here and that's just impossible to do in this in this context i mean look looking at the history of the virgin islands in general you can see right from the beginning that congress permitted one particularly form of discrimination when allowed for the customs regime then existing under the danish laws to proceed and then in the one thousand nine hundred and thirty two act that we cited in our brief permitted additional internal revenue taxes to be applied with the express condition that the goods that are imported be treated in the exact same fashion the goods are local of local manufacture the internal revenue code has a similar prohibition with respect to united states manufactured goods and virgin islands manufactured goods where it says that imports in the united states must have the virgin islands internal revenue rates of life before the ruling on friday the question goes to  honor just because and you know explain and the requested memorandum but the proposed regulations which were presented to the district in the context of a motion to lift the injunction which motion was made in february in the regulations not you know allegedly promulgated until february those regulations had multiple defects the the largest one being the one that the district court on  friday chose to focus on which was that although they implemented an excise tax on local manufacturing they chose to apply the excise tax rates only against the cost of venue factory where as they continue to apply the same rates at the higher sales price of imports which is just a clear imbalance between the type of thing but tax basis that the that is being taxed we need to reach that we have to mean nothing you don't need to respect here i expect the government is presently deciding whether or not to appeal that denial of the motion to lift the injunction and we may be discussing this in a at a future round and there were like i say probably half a dozen other defects with with the you know government's proposal the government has an interest in enforcing its laws and right now they have a on the books and a declaration of unconstitutionality at least in our laws being implemented and so there it still remains my guess if they prevail they can go back to the has as tended to demonstrate an intention for the virgin islands to be treated as a single unified market with the one exception that that they express lee permitted in terms of the  customs duty and the government has found only one other purported permission given by congress that would allow for for this excise tax to be applied in a discriminatory fashion and that is the one thousand nine hundred and eighty act in which the congress simply allowed for a particular collection methodology where the excise tax on imports could be as i said this is this is a precedent that's been in effect for over twenty five years there is no reason to reconsider at this point in order for a presidential pinion like this to be reconsidered by the court providing all the tools necessary to the question at hand i similarly ask the question of you and ask it simply in different phraseology and that is   via article four territorial clause is is it a distinction without a without a difference you can see that directly in polychrome itself in fact after they've after the court determined that principles of commerce clause doctrine apply it immediately proceeded to do a very in depth analysis on their all the factors of the auto transit test showing no deviation whatsoever from black letter commerce fog doctrine so to and furthermore as as that it's been applied in the district court to the extent that's persuasive since polychrome the district court has had a a similar approach following that lead in polygram of using standard black letter form and commerce of doctrin now with the intervening change of the rules and regs and there is no possibility of the government going back to no rules and regs with respect to commerce clause or dharma commerce clause in the collection of excise taxes that issue is moot at this point we just seek to have the injunction lifted and the rules and regs actually place into effect an issues with the methodology as to the the procedures that set forth in the rules are bragg's so st come before the vi court  and then following that it would go to a federal court for any kind of review matters the number one is the request that we have a transcript prepared of your argument and secondly that the parties separately provide the court each provide the peel and if that memo be filed by mid day by noon on december thirty it's three weeks out i think that