Title: Northwest Airlines, Inc. v. Wisconsin Department of Revenue

State: wisconsin

Issuer: Wisconsin Supreme Court

Document:

2006 WI 88 
 
SUPREME COURT OF WISCONSIN 
 
 
 
 
 
CASE NO.: 
2004AP319 
 
 
COMPLETE TITLE: 
 
 
Northwest Airlines, Inc., 
          Plaintiff-Appellant-Cross-Respondent, 
     v. 
Wisconsin Department of Revenue, 
          Defendant-Respondent-Cross-Appellant, 
Midwest Airlines, Inc., 
          Intervening Defendant-Respondent-
Cross-Appellant. 
 
 
 
 
ON CERTIFICATION FROM THE COURT OF APPEALS 
 
 
OPINION FILED: 
July 7, 2006   
SUBMITTED ON BRIEFS: 
        
ORAL ARGUMENT: 
December 13, 2005   
 
 
SOURCE OF APPEAL: 
 
 
COURT: 
Circuit   
 
COUNTY: 
Dane   
 
JUDGE: 
John C. Albert   
 
 
 
JUSTICES: 
 
 
CONCURRED: 
        
 
DISSENTED: 
ABRAHAMSON, C.J., dissents (opinion filed). 
BRADLEY, J., joins the dissent.   
 
NOT PARTICIPATING:         
 
 
 
ATTORNEYS: 
 
For the plaintiff-appellant-cross-respondent there were 
briefs by Donald K. Schott, David D. Wilmoth, Kevin M. Long, 
Brian D. Winters, and Quarles & Brady LLP, Milwaukee, and oral 
argument by Donald K. Schott. 
 
For the defendant-respondent-cross-appellant the cause was 
argued by Mary E. Burke, assistant attorney general, with whom on 
the briefs was Peggy A. Lautenschlager, attorney general. 
 
For 
the 
intervening 
defendant-respondent-cross-appellant 
there were briefs by Joseph D. Kearney, Milwaukee; Robert H. 
Friebert, William B. Guis, Matthew W. O’Neill, Michael Mishlove, 
and Friebert, Finerty & St. John, S.C., Milwaukee, and oral 
argument by Robert H. Friebert. 
 
 
2006 WI 88
NOTICE 
This opinion is subject to further 
editing and modification.  The final 
version will appear in the bound 
volume of the official reports.   
No.  2004AP319   
(L.C. No. 
2002CV3533) 
STATE OF WISCONSIN  
 
 
   : 
IN SUPREME COURT 
 
 
Northwest Airlines, Inc., 
 
          Plaintiff-Appellant-Cross-Respondent, 
 
     v. 
 
Wisconsin Department of Revenue, 
 
          Defendant-Respondent-Cross-Appellant, 
 
Midwest Airlines, Inc., 
 
          Intervening Defendant-Respondent-
Cross-Appellant. 
 
 
 
FILED 
 
JUL 7, 2006 
 
Cornelia G. Clark 
Clerk of Supreme Court 
 
 
 
 
 
APPEAL from an order of the Circuit Court for Dane County, 
John Albert, Judge.   Reversed.   
 
¶1 
DAVID 
T. 
PROSSER, 
J.   In 
2001 
the 
Wisconsin 
legislature created an ad valorem tax exemption for air carrier 
companies that satisfy either of two criteria for operating a 
hub facility in this state.  The purpose of the exemption is to 
maintain Wisconsin's air transportation system, protect existing 
jobs, encourage the development of additional air transportation 
No. 2004AP319 
 
2 
 
facilities, 
and 
preserve 
the 
state's 
competitiveness 
in 
attracting and retaining business and industry. 
¶2 
Northwest Airlines, Inc. (Northwest), an air carrier 
company headquartered in Minnesota, did not qualify for the ad 
valorem tax exemption in 2002.  Had Northwest met the criteria 
for exemption, it would have been exempted from paying more than 
$1.5 million in ad valorem taxes in that year.  Believing itself 
disadvantaged, the air carrier challenged the constitutional 
validity of the tax exemption.  The case is before us on 
certification from the court of appeals1 after the Dane County 
Circuit Court, John Albert, Judge, held the tax exemption 
unconstitutional.  We reverse. 
I. THE HUB EXEMPTION AND PROCEDURAL HISTORY 
¶3 
In 2001 the legislature enacted an absolute exemption 
from ad valorem taxation for any air carrier that operates a hub 
facility in Wisconsin.  Wis. Stat. §§ 70.11(42) and 76.02(1) 
(2003-04).2  The legislature defined a hub facility in two ways: 
a. 
A facility at an airport from which an air 
carrier company operated at least 45 common carrier 
departing flights each weekday in the prior year and 
from which it transported passengers to at least 15 
nonstop destinations, as defined by rule by the 
department of revenue, or transported cargo to nonstop 
destinations, as defined by rule by the department of 
revenue. 
b. 
An airport or any combination of airports in 
this 
state 
from 
which 
an 
air 
carrier 
company 
                                                 
1 Wis. Stat. § (Rule) 809.61 (2003-04). 
2 All references to the Wisconsin Statutes are to the 2003-
04 edition unless otherwise indicated. 
No. 2004AP319 
 
3 
 
cumulatively operated at least 20 common carrier 
departing flights each weekday in the prior year, if 
the air carrier company's headquarters, as defined by 
rule by the department of revenue, is in this state. 
Wis. Stat. § 70.11(42)(a)2.3 
¶4 
The legislature then provided in Wis. Stat. § 76.02(1) 
that "'[a]ir carrier company' means any person engaged in the 
business of transportation in aircraft of persons or property 
for hire on regularly scheduled flights, except an air carrier 
company whose property is exempt from taxation under s. 
70.11(42)(b)."  (Emphasis added.) 
¶5 
As this provision implies, the hub exemption is not 
limited to property physically located at an air carrier's hub 
facility.  Instead, the exemption extends to all "[p]roperty 
owned by an air carrier company that operates a hub facility in 
this state, if the property is used in the operation of the air 
carrier company."  Wis. Stat. § 70.11(42)(b). 
¶6 
Midwest Airlines, Inc. (Midwest) and Air Wisconsin 
Airlines Corp. (Air Wisconsin) qualified for the exemption in 
2002.  Midwest operated a hub facility as defined by the first 
test, the Single Airport hub exemption; Air Wisconsin operated a 
hub facility as defined by the second test, the Headquarters hub 
exemption.  The Legislative Fiscal Bureau estimated that in 2002 
the hub exemption relieved Midwest of nearly $2 million in ad 
                                                 
3 For ease of reference, we refer to the 45-flight hub 
definition as the Single Airport hub exemption and the 20-flight 
hub definition as the Headquarters hub exemption.  When we use 
hub exemption without a modifier, we are referring to both 
exemptions. 
No. 2004AP319 
 
4 
 
valorem taxes, and relieved Air Wisconsin of nearly $600,000 in 
ad valorem taxes.  Legislative Fiscal Bureau, Tax Exemption for 
Air Carriers with Hub Terminal Facilities (DOT – Transportation 
Finance), Paper # 899 to Joint Committee on Finance, at 2-3 (May 
29, 2001) (hereinafter Legislative Fiscal Bureau Paper # 899). 
 
¶7 
Northwest received its 2002 ad valorem tax assessment 
on October 10, 2002, and filed a summons and complaint for re-
determination of its assessment in the Dane County Circuit Court 
on November 11, 2002.  Northwest claimed the hub exemption 
violated (1) the Interstate Commerce Clause, Article I, Section 
8 of the United States Constitution; (2) the Equal Protection 
Clause, 
Amendment 
XIV, 
Section 
1 
of 
the 
United 
States 
Constitution; and (3) the Uniformity Clause, Article VIII, 
Section 1 of the Wisconsin Constitution. 
 
¶8 
The named defendant, the Wisconsin Department of 
Revenue (DOR), filed a motion to dismiss because, inter alia, 
Northwest had failed to serve DOR within 30 days of receiving 
the assessment notice.  On the same day, June 13, 2003, 
Northwest filed a motion for summary judgment, requesting that 
the circuit court declare the hub exemption unconstitutional. 
 
¶9 
The circuit court granted in part the DOR's motion to 
dismiss.  The court held that Wis. Stat. § 76.08(1) required 
Northwest to serve DOR with a copy of the summons and complaint 
within 30 days of receiving an assessment notice and that 
Northwest failed to do so.  Northwest did not serve DOR until 
January 13, 2003.  Accordingly, the circuit court held that 
Northwest was not entitled to a re-determination of its 2002 ad 
No. 2004AP319 
 
5 
 
valorem tax assessment and that this denial of re-determination 
did not deprive Northwest of its due process right to meaningful 
retrospective relief. 
¶10 In addition, the circuit court ruled on Northwest's 
summary judgment motion.  The court held that the hub exemption 
was a facial violation of the dormant Commerce Clause because it 
benefited in-state air carriers while imposing an extra burden 
on out-of-state air carriers.  The court also concluded that the 
hub exemption could be severed from the ad valorem tax scheme, 
allowing the ad valorem tax to be imposed upon all air carriers. 
¶11 Both Northwest and DOR appealed.  Northwest appealed 
the circuit court's holdings that (1) the hub exemption was 
severable; (2) Wis. Stat. § 76.08(1) required it to serve DOR 
with a copy of the summons and complaint within 30 days; and (3) 
the denial of the re-determination claim did not violate 
Northwest's due process 
right 
to 
meaningful 
retrospective 
relief.  DOR cross-appealed the circuit court's holding that the 
hub exemption violates the dormant Commerce Clause. 
¶12 Faced with the prospect of having to pay the ad 
valorem tax, Midwest filed a motion to intervene.  The circuit 
court 
granted 
Midwest 
leave 
to 
intervene 
but 
would 
not 
reconsider its constitutional ruling.  On appeal, Midwest 
challenges the circuit court's holdings that (1) the hub 
exemption is severable; and (2) the hub exemption violates the 
dormant Commerce Clause.  Midwest contends that a federal 
statute, 
49 
U.S.C.A. 
§ 40116 
(2000 
& 
West 
Supp. 
2005), 
forecloses review of the constitutionality of the hub exemption 
No. 2004AP319 
 
6 
 
under the dormant Commerce Clause.  DOR joins Midwest in this 
argument. 
¶13 The parties also ask us to determine whether the hub 
exemption violates either the Equal Protection Clause or the 
Uniformity Clause even though the circuit court reached neither 
issue. 
¶14 We conclude: (1) 49 U.S.C.A. § 40116 precludes dormant 
Commerce Clause review of the hub exemption; (2) the hub 
exemption does not violate the Equal Protection Clause of the 
United States Constitution; and (3) the hub exemption does not 
violate the Uniformity Clause of the Wisconsin Constitution.  
Because we have determined that the hub exemption is valid, we 
need not reach the questions associated with whether Northwest 
complied with the procedural requirements for re-determination 
of its assessment.  Accordingly, we reverse the circuit court's 
decision that the hub exemption violates the dormant Commerce 
Clause. 
II. BACKGROUND 
 
¶15 Wisconsin taxes in-state property by means of either a 
general 
property 
tax 
or 
an 
ad 
valorem 
property 
tax.  
Wis. Stat. chs. 70 (general property tax) and 76 (ad valorem 
property tax).  The property of all "air carrier companies"4 is 
exempt from general property taxes.  Wis. Stat. §§ 70.11(42)(b) 
and 70.112(4) and (6). 
                                                 
4 As noted, an air carrier company is defined as "any person 
engaged in the business of transportation in aircraft of persons 
or 
property 
for 
hire 
on 
regularly 
scheduled 
flights."  
Wis. Stat. § 70.11(42)(a)1. 
No. 2004AP319 
 
7 
 
 
¶16 Wisconsin taxes air carrier companies under an ad 
valorem tax in Wis. Stat. ch. 76.5  See Wis. Stat. §§ 76.01, 
76.02, and 76.23.  Each air carrier's property is valued on a 
company-wide 
basis, 
and 
a 
percentage 
of 
this 
amount 
is 
attributed to Wisconsin for purposes of calculating the ad 
valorem tax.  Wis. Stat. § 76.07(4g)(b).  As noted, not all air 
carrier companies are subject to an ad valorem tax.  See 
Wis. Stat. § 76.02(1).  Any air carrier company that operates a 
"hub facility,"6 as defined by Wis. Stat. § 70.11(42)(a)2., is 
exempt from the ad valorem tax. 
¶17 At present, Midwest and Air Wisconsin are the only air 
carrier companies that qualify for the hub exemption. 
                                                 
5 Unlike general property taxes, which are levied and 
collected by towns, villages, and cities, the ad valorem tax 
imposed upon air carriers is levied and collected by the DOR.  
Compare Wis. Stat. § 70.05 with Wis. Stat. § 76.01. 
6 As noted, a "hub facility" is defined as: 
a. 
A facility at an airport from which an air 
carrier company operated at least 45 common carrier 
departing flights each weekday in the prior year and 
from which it transported passengers to at least 15 
nonstop destinations, as defined by rule by the 
department of revenue, or transported cargo to nonstop 
destinations, as defined by rule by the department of 
revenue. 
b. 
An airport or any combination of airports in 
this 
state 
from 
which 
an 
air 
carrier 
company 
cumulatively operated at least 20 common carrier 
departing flights each weekday in the prior year, if 
the air carrier company's headquarters, as defined by 
rule by the department of revenue, is in this state. 
Wis. Stat. § 70.11(42)(a)2. 
No. 2004AP319 
 
8 
 
 
¶18 As initially drafted, the hub exemption was tailored 
to benefit Midwest.  See Department of Revenue Fiscal Estimate 
to 1999 S.B. 411 (Mar. 1, 2000); Department of Transportation 
Fiscal Estimate to 1999 S.B. 411 (Feb. 29, 2000).  The 
legislature first proposed the hub exemption to induce Midwest 
to push forward with a nearly $1 billion expansion in Wisconsin 
rather than elsewhere.7  Sarah Wyatt, Airline won't expand in 
state without tax relief, Wis. St. J., Oct. 15, 1999, at 10B 
(noting the combination of income and property taxes paid by 
Midwest in Wisconsin was two to six times greater than the 
amount it would pay in income and property taxes in Illinois, 
Michigan, 
Missouri, 
Iowa, 
or 
Minnesota); Dennis 
Chaptman, 
Midwest Express turns attention to tax cut, Milwaukee J. 
Sentinel, Feb. 15, 2000, at 1D. 
                                                 
7 Wisconsin's hub exemption is one example of states using 
financial incentives to induce desirable behavior, promote 
economic development, and compete against other states for 
business development.  Wisconsin is not alone in enacting 
legislation to attract air carriers to establish hub facilities.  
For example, Alabama has a similar tax exemption for air 
carriers that operate a hub facility in-state, Ala. Code § 40-9-
1(24); Indiana provides a deduction from the ad valorem tax 
imposed upon air carriers to encourage intrastate flights, Ind. 
Code §§ 6-1.1-12.3-1 to 6-1.1-12.3-15; North Carolina grants a 
partial refund on sales and use taxes paid by interstate air 
carriers on their purchases of fuel and repair parts, N.C. Gen. 
Stat. § 105-164.14; and South Carolina authorizes its governor 
to issue bonds to pay a portion of an air carrier's expenses in 
acquiring or constructing a hub facility, S.C. Code Ann. §§ 55-
11-500 to 55-11-520. 
No. 2004AP319 
 
9 
 
¶19 Midwest's 
principal 
offices 
are 
in 
Oak 
Creek, 
Wisconsin; its primary base of operations is Milwaukee.8  In 
2000, when the legislature first considered the hub exemption, 
Midwest employed approximately 1,600 employees in Milwaukee.  
Dennis Chaptman, Midwest Express turns attention to tax cut, 
Milwaukee J. Sentinel, Feb. 15, 2000, at 1D.  In a press release 
issued two months before the hub exemption was passed, Governor 
Scott McCallum described the effect of Midwest upon Wisconsin's 
economy.  Governor McCallum noted that Midwest accounted, 
directly or indirectly, for more than 5000 jobs in Wisconsin and 
generated more than $173 million in personal income in 2000.  
Governor Scott McCallum, Press Release (June 6, 2001) at 1.9 
¶20 In 2002 ten jet airlines served Milwaukee.  As a 
general rule, the nine airlines serving Milwaukee other than 
Midwest provided nonstop flights only between Milwaukee and 
their hub cities.10  By contrast, Midwest provided nonstop 
service between Milwaukee and at least 18 cities.  In 2002 
Midwest had the largest share of the Milwaukee market, carrying 
37.5% of passengers emplaning in Milwaukee. 
                                                 
8 In addition to Milwaukee, Midwest has secondary bases of 
operation in Omaha, Nebraska, and Kansas City, Missouri. 
9 Another study, prepared in 1999 by the Metropolitan 
Milwaukee 
Association 
of 
Commerce, 
reported 
that 
Midwest 
generated 10,617 jobs for Wisconsin and $265.5 million in 
personal earnings. 
10 To illustrate, a person in Milwaukee who desires to fly 
to Boston, New York, or Washington D.C. on Northwest will 
normally have to stop, and likely change planes, in Detroit or 
Minneapolis before proceeding to his or her final destination. 
No. 2004AP319 
 
10 
 
 
¶21 Northwest is Midwest's strongest competitor in the 
Milwaukee market.  In 2002 Northwest had the second largest 
market share in Milwaukee, carrying 18.6 percent of the 
passengers emplaning in Milwaukee.  Northwest is a subsidiary of 
Northwest Airlines, Corporation, which has its principal offices 
in Eagan, Minnesota.  Northwest is the fourth largest airline in 
the world and has domestic hubs in Minneapolis, Minnesota; 
Detroit, Michigan; and Memphis, Tennessee.  From 2000 to 2002 
Northwest operated an average of 68 flights per day into and out 
of Wisconsin, flying out of five Wisconsin airports. 
¶22 In the course of considering the tax exemption, the 
legislature enlarged the definition of a hub facility to include 
the Headquarters hub exemption, allowing Air Wisconsin to 
qualify for an exemption from the ad valorem tax.  See 2001 
Wisconsin Act 16; Dennis Chaptman, Lawmakers haggle over tax 
breaks for airlines, Milwaukee J. Sentinel, Mar. 30, 2000, at 
1D.  Air Wisconsin is a regional and commuter airline founded in 
1965 and headquartered in Appleton.11 
 
¶23 Since 2001 Northwest has paid its ad valorem tax 
assessments under protest, challenging the validity of the hub 
exemption each year.  Northwest challenges the hub exemption on 
the grounds that it offers Midwest and Air Wisconsin a 
competitive advantage.  In 2000, the last year in which Midwest 
and Air Wisconsin paid an ad valorem tax, Midwest paid 
                                                 
11 Air Wisconsin, unlike Midwest, did not intervene and is 
not a party in this case. 
No. 2004AP319 
 
11 
 
$1,953,300.94; Air Wisconsin paid $577,062.34; and Northwest 
paid $1,653,437.20.  In 2002 Northwest paid $1,562,968.23 in ad 
valorem tax. 
¶24 After the circuit court denied Northwest's claim for a 
re-determination of its 2002 assessment but declared the hub 
exemption unconstitutional, Midwest intervened, and Northwest, 
DOR, and Midwest all appealed.  The City and County of Milwaukee 
and the Metropolitan Milwaukee Association of Commerce filed 
amicus briefs in support of the hub exemption.  The court of 
appeals certified the case, and we granted certification. 
III. STANDARD OF REVIEW 
 
¶25 This 
case 
presents 
questions 
of 
law 
involving 
statutory 
interpretation 
and 
a 
challenge 
to 
the 
constitutionality 
of 
a 
tax 
exemption, 
which 
we 
review 
independent of the circuit court, though benefiting from its 
analysis.  State v. James P., 2005 WI 80, ¶16, 281 Wis. 2d 685, 
698 N.W.2d 95 (statutory interpretation); Nankin v. Village of 
Shorewood, 2001 WI 92, ¶10, 245 Wis. 2d 86, 630 N.W.2d 141 
(constitutional challenge to a statute). 
 
¶26 "All legislative acts are presumed constitutional and 
every presumption must be indulged to uphold the law if at all 
possible."  Norquist v. Zeuske, 211 Wis. 2d 241, 250, 564 
N.W.2d 748 (1997).  This presumption of constitutionality is the 
strongest for tax statutes.  Id.  To overcome the presumption of 
No. 2004AP319 
 
12 
 
constitutionality, the party challenging the statute must prove 
it unconstitutional beyond a reasonable doubt.  Id.12 
IV. DISCUSSION 
A. 
Does 49 U.S.C.A. § 40116 Foreclose Dormant Commerce Clause 
Review of the Hub Exemption? 
 
¶27 Northwest's principal challenge to the hub exemption 
is that it violates the Interstate Commerce Clause.  Article I, 
Section 8, clause 3 of the United States Constitution gives 
Congress the power "[t]o regulate commerce . . . among the 
several states . . . ."  Courts have consistently held that 
there is a negative implication to this affirmative grant of 
power to Congress that restricts the ability of states to 
regulate interstate commerce.  Camps Newfound/Owatonna, Inc. v. 
Town of Harrison, Maine, 520 U.S. 564, 571 (1997); Olstad v. 
Microsoft Corp., 2005 WI 121, ¶30, 284 Wis. 2d 224, 700 
N.W.2d 139.  This restriction upon the states, called either the 
negative 
or 
dormant 
Commerce 
Clause, 
"prohibits 
economic 
protectionism——that is, 'regulatory measures designed to benefit 
in-state 
economic 
interests 
by 
burdening 
out-of-state 
competitors.'"  Fulton Corp. v. Faulkner, 516 U.S. 325, 330 
(1996).  Under the dormant Commerce Clause, courts "protect[] 
the free flow of commerce, and thereby safeguard[] Congress' 
latent power from encroachment by the several States[]" when 
Congress has not affirmatively exercised its Commerce Clause 
                                                 
12 The standards of review for an equal protection challenge 
and a uniformity clause challenge are discussed elsewhere in the 
opinion. See ¶¶54, 55, 62, 65, infra. 
No. 2004AP319 
 
13 
 
power.  Merrion v. Jicarilla Apache Indian Tribe, 455 U.S. 130, 
154 (1982). 
 
¶28 The Commerce Clause is a grant of plenary power to 
Congress 
to 
regulate 
interstate 
commerce. 
 
Fed'l 
Energy 
Regulatory Comm'n v. Mississippi, 456 U.S. 742, 753 (1982).  As 
part of its Commerce Clause power, Congress may "redefine the 
distribution of power over interstate commerce."  S. Pac. Co. v. 
State of Ariz. ex rel. Sullivan, 325 U.S. 761, 769 (1945).  
Thus, by affirmative legislation in an area, Congress can 
authorize the states to regulate interstate commerce in a manner 
that would otherwise violate the dormant Commerce Clause.  Id. 
¶29 Within the scope of congressional authorization, state 
regulation of interstate commerce is "invulnerable to Commerce 
Clause challenge."  W. & S. Life Ins. Co. v. State Bd. of 
Equalization, 451 U.S. 648, 652-53 (1981).  Describing the 
judiciary's role in applying the dormant Commerce Clause, the 
Supreme Court has said: "When Congress has struck the balance it 
deems appropriate, the courts are no longer needed to prevent 
States from burdening commerce, and it matters not that the 
courts would invalidate the state tax or regulation under the 
Commerce Clause in the absence of congressional action."  
Merrion, 455 U.S. at 154.  
 
¶30 A threshold question in many dormant Commerce Clause 
cases is whether Congress has exercised its Commerce Clause 
power in a field in which case judicial review is precluded.  
See Granholm v. Heald, 544 U.S. 460, 476-89 (2005); Wyoming v. 
Oklahoma, 502 U.S. 437, 457-58 (1992); Ne. Bancorp, Inc. v. Bd. 
No. 2004AP319 
 
14 
 
of Governors, 472 U.S. 159, 168-75 (1985); South-Central Timber 
Dev., Inc. v. Wunnicke, 467 U.S. 82, 87-93 (1984); Merrion, 455 
U.S. at 154-56; W. & S. Life Ins. Co., 451 U.S. at 652-53.  For 
a 
statute 
to 
preclude 
dormant 
Commerce 
Clause 
review, 
congressional intent must be unmistakably clear.  E.g., Wyoming, 
502 U.S. at 458;  Wunnicke, 467 U.S. at 91-92; see also Hillside 
Dairy, Inc. v. Lyons, 539 U.S. 59, 66 (2003) (requiring Congress 
to have "clearly expressed" its intent to permit states to 
discriminate against interstate commerce). 
¶31 Whether Congress has given its consent to state 
regulations that would otherwise run afoul of the dormant 
Commerce Clause requires a "reverse-preemption" analysis.  See 1 
Laurence H. Tribe, American Constitutional Law 1039 (3d ed. 
2000).  Whereas preemption operates on the presumption that 
state laws are constitutional unless Congress enacts legislation 
to the contrary, state laws that discriminatorily regulate or 
unduly 
burden 
interstate 
commerce 
are 
presumptively 
unconstitutional unless Congress enacts legislation to the 
contrary.  Id. 
¶32 In this case we apply a reverse-preemption analysis to 
discern whether Congress has consented to differential taxation 
of air carriers.  We first examine the text of 49 U.S.C.A. 
§ 40116 to determine whether Congress has expressly consented to 
differential taxation among air carriers.  Cf. Schneidewind v. 
ANR Pipeline Co., 485 U.S. 293, 299-00 (1988) (describing the 
first stage in standard preemption analysis as whether Congress 
made explicit the extent to which state law is preempted).  Only 
No. 2004AP319 
 
15 
 
if § 40116 fails to demonstrate that Congress gave its express 
consent to differential taxation of air carrier transportation 
property do we examine legislative history and extrinsic sources 
to 
determine 
whether 
Congress 
implicitly 
consented 
to 
differential taxation of air carriers.  Cf. id. at 300; Ne. 
Bancorp, Inc., 472 U.S. at 169 (noting that although the face of 
the 
statute 
did 
not 
establish 
with 
unmistakable 
clarity 
congressional 
consent 
to 
discriminatory 
regulations, 
the 
legislative history demonstrated congressional consent). 
¶33 Three subsections of 49 U.S.C.A. § 40116 are relevant 
to our inquiry: 
(b) Prohibitions. 
 
Except 
as 
provided 
in 
subsection (c) of this section and section 40117 of 
this title, a State, a political subdivision of a 
State, and any person that has purchased or leased an 
airport under section 47134 of this title, may not 
levy or collect a tax, fee, head charge, or other 
charge on—— 
(1) an individual traveling in air commerce; 
(2) the 
transportation 
of 
an 
individual 
traveling in air commerce; 
(3) the sale of air transportation; or 
(4)the gross receipts from that air commerce or 
transportation. 
. . . .  
(d) Unreasonable 
burdens 
and 
discrimination 
against interstate commerce. 
(1) In this subsection—— 
(A) "air carrier transportation property" means 
property 
(as 
defined 
by 
the 
Secretary 
of 
No. 2004AP319 
 
16 
 
Transportation) that an air carrier providing air 
transportation owns or uses. 
. . . .  
(D) "commercial and industrial property" means 
property (except transportation property and land used 
primarily for agriculture or timber growing) devoted 
to a commercial or industrial use and subject to a 
property tax levy. 
(2)(A) 
A State, political subdivision of a 
State, or authority acting for a State or political 
subdivision may not do any of the following acts 
because 
those 
acts 
unreasonably 
burden 
and 
discriminate against interstate commerce: 
(i) assess air carrier transportation property 
at a value that has a higher ratio to the true market 
value of the property than the ratio that the assessed 
value of other commercial and industrial property of 
the same type in the same assessment jurisdiction has 
to the true market value of the other commercial and 
industrial property. 
(ii) levy or collect a tax on an assessment that 
may not be made under clause (i) of this subparagraph. 
(iii) 
levy or collect an ad valorem property 
tax on air carrier transportation property at a tax 
rate 
greater 
than 
the 
tax 
rate 
applicable 
to 
commercial 
and 
industrial 
property 
in 
the 
same 
assessment jurisdiction. 
(iv) levy or collect a tax, fee, or charge, first 
taking effect after August 23, 1994, exclusively upon 
any business located at a commercial service airport 
or operating as a permittee of such an airport other 
than a tax, fee, or charge wholly utilized for airport 
or aeronautical purposes. 
. . . .  
(e) Other allowable taxes and charges.  Except 
as provided in subsection (d) of this section, a State 
or political subdivision of a State may levy or 
collect—— 
No. 2004AP319 
 
17 
 
(1) taxes (except those taxes enumerated in 
subsection (b) of this section), including property 
taxes, net income taxes, franchise taxes, and sales or 
use taxes on the sale of goods or services; and 
(2) reasonable rental charges, landing fees, and 
other service charges from aircraft operators for 
using airport facilities of an airport owned or 
operated by that State or subdivision. 
 
¶34 Midwest and DOR contend that 49 U.S.C.A. § 40116 
constitutes "unmistakably clear" evidence that Congress intended 
to preclude dormant Commerce Clause review of state taxation of 
air carriers.  Midwest and DOR reason as follows.  First,  
§ 40116(b) and (d) prohibit eight tax practices with regard to 
air carriers.13  Second, § 40116(e) clearly authorizes state 
taxes, including property taxes, except those proscribed in 
§ 40116(b) or (d).  Therefore, because property tax exemptions 
among air carriers are not expressly prohibited, Midwest and DOR 
conclude that Congress authorized exemptions like the hub 
                                                 
13 49 U.S.C.A. § 40116(c) constitutes another prohibition on 
state and local taxation.  It reads: 
A State or political subdivision of a State may levy 
or collect a tax on or related to a flight of a 
commercial aircraft or an activity or service on the 
aircraft only if the aircraft takes off or lands in 
the State or political subdivision as part of the 
flight. 
§ 40116(c). 
No. 2004AP319 
 
18 
 
exemption and precluded judicial review of tax exemptions under 
the dormant Commerce Clause.14 
¶35 Northwest 
disagrees 
and argues that 
49 U.S.C.A. 
§ 40116 does not demonstrate that Congress intended to preclude 
dormant Commerce Clause review.  It draws vastly different 
conclusions from the text of § 40116.  Northwest argues that 
§ 40116(b) and (d) preempt traditional state powers of taxation 
and that § 40116(e) is merely a non-preemption or saving clause, 
which was intended to preserve then-existing state tax powers 
rather than to confer upon the states new powers to tax.  
According to Northwest, § 40116 supplements but does not replace 
dormant Commerce Clause review; thus, taxes imposed upon air 
carriers must survive scrutiny under both § 40116 and the 
dormant Commerce Clause. 
¶36 We cannot accept Northwest's reading of the statute.  
To evaluate the parties' arguments, we begin with the statutory 
text to determine whether Congress made unmistakably clear its 
intent to authorize tax exemptions like the hub exemption, and 
thereby foreclose dormant Commerce Clause review.  We employ the 
same methodology to interpret a federal statute as we do when we 
interpret a state statute; that is, we start with the text of 
the statute.  If the statute's meaning is plain, then our 
                                                 
14 Precluding judicial review of tax exemptions under the 
dormant Commerce Clause does not foreclose judicial review of 
tax exemptions on other constitutional grounds.  W. & S. Life 
Ins. Co., 451 U.S. at 655-56.  However, when a tax statute 
involving interstate commerce is challenged on other grounds, 
the statute is presumed constitutional. 
No. 2004AP319 
 
19 
 
inquiry ordinarily stops.  State ex rel. Kalal v. Circuit Court 
for Dane County, 2004 WI 58, ¶45, 271 Wis. 2d 633, 681 
N.W.2d 110.  Accord Dodd v. United States, 545 U.S. 353, 360 
(2005); Lamie v. United States Trustee, 540 U.S. 526, 534 
(2004); Hartford Underwriters Ins. Co. v. Union Planters Bank, 
530 U.S. 1, 6 (2000) (when the statute's language is plain, the 
sole function of the courts——at least where the disposition 
required by the text is not absurd——is to enforce it according 
to its terms).  Because we conclude that 49 U.S.C.A. § 40116 
demonstrates——with unmistakable clarity——congressional consent 
to allow states to impose differential taxes among air carriers, 
we need not resort to extrinsic sources.15 
¶37 The statutory structure of 49 U.S.C.A. § 40116 creates 
two types of taxes on air carriers: taxes that are prohibited 
and taxes that are authorized.  Taxes that are not prohibited 
under either subsection (b) or subsection (d) are authorized by 
subsection (e).16  We must determine, therefore, whether the hub 
exemption fits within any of the prohibited provisions, and if 
                                                 
15 We note that the briefs and appendices submitted by the 
parties are replete with legislative history.  Our independent 
review of the legislative history demonstrates that documents 
exist that reasonably support the positions of both Northwest 
and Midwest and DOR.  We do not, however, turn to legislative 
history to find ambiguity.  State ex rel. Kalal v. Circuit Court 
for Dane County, 2004 WI 58, ¶51, 271 Wis. 2d 633, 681 
N.W.2d 110; Fox v. Catholic Knights Ins. Soc'y, 2003 WI 87, ¶19, 
263 Wis. 2d 207, 665 N.W.2d 181. 
16 Although subsection (c) also constrains the ability of 
states to tax air carriers, we will not consider it here because 
it is not relevant to this case. 
No. 2004AP319 
 
20 
 
it does not, whether subsection (e) evinces congressional intent 
to preclude dormant Commerce Clause review. 
¶38 The parties agree that the hub exemption does not 
contravene 49 U.S.C.A. § 40116(b), which prohibits a state from 
levying or collecting a tax on "(1) an individual traveling in 
air commerce; (2) the transportation of an individual traveling 
in air commerce; (3) the sale of air transportation; or (4) the 
gross receipts from that air commerce or transportation."  We 
agree that subsection (b) does not prohibit ad valorem taxes 
upon air carriers.  See Aloha Airlines, Inc. v. Dir. of Taxation 
of Hawaii, 464 U.S. 7, 12 (1983). 
¶39 The parties' real dispute centers on the relationship 
of 49 U.S.C.A. § 40116(d) to § 40116(e).  Subsection (d) deems 
certain methods of calculating a property tax or an ad valorem 
tax 
"[u]nreasonable 
burdens 
and 
discrimination 
against 
interstate commerce."  Subsection (d) constrains (1) the 
assessment ratio states may use to calculate the taxable value 
of air carrier property, § 40116(d)(2)(A)(i) and (ii); and (2) 
the tax rate states may use to calculate an ad valorem tax on 
air carrier property, § 40116(d)(2)(A)(iii).  Subsection (d) 
requires that neither the assessment ratio nor the tax rate for 
the property of air carriers be greater than the assessment 
ratio or tax rate of "commercial and industrial property" in the 
assessment jurisdiction. 
¶40 At the same time, 49 U.S.C.A. § 40116(e) authorizes 
states to levy and collect property taxes upon air carriers, 
"[e]xcept as provided in subsection (d)[.]" 
No. 2004AP319 
 
21 
 
¶41 The argument presented by Midwest and DOR turns on how 
49 U.S.C.A. § 40116(d)(1)(D) defines "commercial and industrial 
property."  "Commercial and industrial property" means "property 
(except transportation property and land used primarily for 
agriculture or timber growing) devoted to a commercial or 
industrial use and subject to a property tax levy."  49 U.S.C.A. 
§ 40116(d)(1)(D) (emphasis added).  Discrimination requires 
differential treatment of two otherwise comparable groups.  For 
purposes of § 40116(d), whether a state tax impermissibly 
discriminates against air carriers is determined by comparing 
the property tax assessment ratio and the ad valorem property 
tax rate of "air carrier transportation property" with the 
assessment ratio and tax rate of "commercial and industrial 
property."  "Commercial and industrial property" supplies the 
comparison class by which discrimination against air carriers is 
measured. 
¶42 Northwest 
argues 
the 
hub 
exemption 
discriminates 
against interstate commerce because it results in a different 
tax rate being applied to Midwest and Air Wisconsin from all 
other air carriers.  Midwest and DOR emphasize, however, that 
the ad valorem tax rate imposed upon Midwest and Air Wisconsin 
is irrelevant because the property of the two air carriers is 
both "transportation property" and exempt property.  This means, 
they contend, that the property of Midwest and Air Wisconsin is 
not part of the comparison class by which discrimination against 
an air carrier is measured under 49 U.S.C.A. § 40116(d). 
No. 2004AP319 
 
22 
 
¶43 Northwest 
discounts 
these 
exclusions 
from 
the 
comparison class.  Northwest first contends that transportation 
property had to be excluded to "make possible a sensible, non-
circular comparison class[.]"  Second, Northwest acknowledges 
that exempt property is not part of the comparison class, but, 
relying upon Department of Revenue of Oregon v. ACF Industries, 
Inc., 510 U.S. 332 (1994), it argues that the hub exemption is 
contrary to the anti-discriminatory purpose of 49 U.S.C.A. 
§ 40116. 
¶44 Ultimately, we agree with Midwest and DOR.  Although 
we acknowledge the need for a meaningful comparison class, we 
believe that Congress determined, first, that air carrier 
transportation property must not be assessed or taxed at a 
higher rate than other commercial property (implying that it 
could be assessed and taxed at a lower rate) and, second, air 
carrier transportation property need not be assessed and taxed 
the same as other transportation property (e.g., motor carrier 
and railroad property).  See Am. Airlines, Inc. v. County of San 
Mateo, 912 P.2d 1198, 1217 (Cal. 1996) (concluding that 
assessing the property of air carriers at 100 percent of fair 
market value while assessing the property of railroads at 70 
percent of fair market value did not violate 49 U.S.C.A. 
§ 40116(d)).  Moreover, we do not find persuasive Northwest's 
reliance upon ACF Industries to minimize the importance of 
excluding exempt property from the comparison class. 
¶45 In ACF Industries eight railroads challenged Oregon's 
ad valorem personal property tax, claiming that it violated the 
No. 2004AP319 
 
23 
 
Railroad Revitalization and Regulatory Reform Act (4-R Act) (49 
U.S.C.A. § 11501), the model for 49 U.S.C.A. § 40116(d).17  ACF 
Indus., 510 U.S. at 335.  Oregon imposed an ad valorem personal 
property tax that applied to railroads but created a number of 
exemptions for non-railroad business property for which the 
railroads did not qualify.  These included exemptions for 
business 
personal 
property, 
non-farm 
business 
inventories, 
livestock, and agricultural products in the possession of 
farmers.  Id.  The Supreme Court upheld the exemptions, 
concluding that "a State may grant exemptions from a generally 
applicable ad valorem property tax without subjecting the 
taxation of railroad property to challenge under the relevant 
provision of the 4-R Act[.]"  Id. 
¶46 The Supreme Court's decision in ACF Industries turned 
upon the definition of "commercial and industrial property" in 
the 4-R Act, which, like the definition in 49 U.S.C.A. 
§ 40116(d)(1)(D), defines the comparison class for evaluating 
discrimination against railroads.  See id. at 341-42.  Like the 
definition 
of 
"commercial 
and 
industrial 
property" 
in 
§ 40116(d)(1)(D), the 4-R Act excludes both transportation 
property and exempt property from the comparison class.  49 
                                                 
17 The text of 49 U.S.C.A. § 40116(d) is modeled upon the 
Railroad Revitalization and Regulatory Reform Act (4-R Act) (49 
U.S.C.A. § 11501) and the Motor Carrier Act (49 U.S.C.A. § 
14502).  Courts have consistently relied upon cases interpreting 
the 4-R act to interpret § 40116(d) and vice versa.  E.g., Am. 
Airlines, Inc. v. County of San Mateo, 912 P.2d 1198, 1207 (Cal. 
1996) (collecting cases); see also W. Air Lines, Inc. v. Bd. of 
Equalization, 480 U.S. 123, 130-131 (1987). 
No. 2004AP319 
 
24 
 
U.S.C.A. § 11501(a)(4).18  The Court found that principles of 
federalism made necessary the exclusion of exempt property from 
the comparison class, because the power to grant tax exemptions 
is among the traditional powers of the states and because the 
states must be allowed to grant "tax exemptions to encourage 
industrial development."  Id. at 345-46.  Thus, the Court 
explained that the 4-R Act would not prohibit tax exemptions 
unless the exemptions result in all property other than railroad 
property being exempt, in which case "it might be incorrect to 
say that the State 'exempted' the nontaxed property."  Id. at 
346.  "Rather, one could say that the State had singled out 
railroad property for discriminatory treatment."  Id. at 346-47. 
¶47 Northwest inverts the holding in ACF Industries, 
claiming the hub exemption targets select air carriers.  We 
acknowledge that the hub exemption is presently available to 
only two air carriers.  However, under ACF Industries, state tax 
exemptions do not violate the 4-R Act, and by extension 49 
U.S.C.A. § 40116, as long as the amount of property made exempt 
does not dwarf the amount of property subject to tax.  In the 
present case, the hub exemption is limited, like the exemptions 
in ACF Industries, and does not warrant the conclusion that the 
legislature 
"singled 
out" 
Northwest 
for 
discriminatory 
treatment.  Because § 40116(d)(1)(D) defines "commercial and 
                                                 
18 The 4-R Act defines "commercial and industrial property" 
as "property, other than transportation property and land used 
primarily for agricultural purposes or timber growing, devoted 
to a commercial or industrial use and subject to a property tax 
levy."  49 U.S.C.A. § 11501(a)(4). 
No. 2004AP319 
 
25 
 
industrial property" to exclude (1) transportation property, and 
(2) property not subject to a property tax levy, and because the 
property of Midwest and Air Wisconsin fits both exceptions to 
the comparison class, we conclude that the assessment ratio and 
tax rate at which the property of Midwest and Air Wisconsin are 
taxed is irrelevant.  See ACF Indus., Inc., 510 U.S. at 342.  
Northwest cannot establish that the hub exemption results in a 
violation of § 40116(d). 
¶48 The Supreme Court's holding in ACF Industries bolsters 
our conclusion that 49 U.S.C.A. § 40116 evinces congressional 
intent to (1) permit differential taxation of transportation 
property, including——by extension——differential taxation among 
air carriers;19 and (2) exclude the effect of property tax 
exemptions on the average property tax rate of the comparison 
class.  Consequently, the hub exemption is not prohibited by 
either § 40116(b) or (d); and § 40116(e) authorizes the states 
to create property tax exemptions for transportation property 
without exposing these exemptions to challenge under the dormant 
Commerce Clause. 
                                                 
19 The Supreme Court has previously upheld the power of 
state and local governments to impose differential fees upon 
aircraft operators.  In Northwest Airlines, Inc. v. County of 
Kent, Michigan, 510 U.S. 355, 358-60 (1994), the Court concluded 
that charging commercial airlines 100 percent of the user fees 
and costs allocated to them, but charging general aviation 
(corporate and privately owned aircraft) 20 percent of the costs 
allocated to it, did not violate 49 U.S.C.A. § 40116. 
No. 2004AP319 
 
26 
 
¶49 When Congress enacted 49 U.S.C.A. § 40116(b) and (d), 
Congress intended to replace the uncertainty and quagmire20 of 
dormant Commerce Clause review with the relative certainty of 
statutory tests that protect against discriminatory taxation.  
As the Supreme Court has recognized, its dormant Commerce Clause 
cases have resulted in a "case-by-case approach [that] has left 
'much room for controversy and confusion and little in the way 
of precise guides to the States in the exercise of their 
indispensable power of taxation.'"  Boston Stock Exchange v. 
State Tax Comm'n, 429 U.S. 318, 329 (1977) (quoting Nw. States 
Portland Cement Co. v. Minnesota, 358 U.S. 450, 457 (1959)).  A 
tax device, with respect to the property of air carrier 
companies, that does not conflict with § 40116(b) or (d) should 
not be required to run through an additional judicial gauntlet 
where it is subjected to a different standard of review than is 
normally applied to a tax statute. 
¶50 At least two features of 49 U.S.C.A. § 40116 support 
this conclusion.  First, the relationship between § 40116(d) and 
§ 40116(e) suggests Congress employed reasoning analogous to 
that which underlies the canon of construction expressio unius 
est exclusio alterius.  The expressio unius canon is an 
interpretive guide meaning that the expression of one thing in a 
statute excludes another that is not stated.  Motola v. LIRC, 
                                                 
20 The Supreme Court itself has referred to its dormant 
Commerce Clause jurisprudence as a "quagmire."  See Boston Stock 
Exchange v. State Tax Comm'n, 429 U.S. 318, 329 (1977) (quoting 
Nw. States Portland Cement Co. v. Minnesota, 358 U.S. 450, 458 
(1959)). 
No. 2004AP319 
 
27 
 
219 
Wis. 2d 588, 
605, 
580 
N.W.2d 297 
(1998). 
 
Congress 
specifically enumerated eight prohibited tax practices and 
provided that all other practices are "allowable."  Accordingly, 
we conclude that because the hub exemption does not run afoul of 
§ 40116(d), Congress unambiguously authorized forms of taxation 
like Wisconsin's ad valorem tax upon air carriers. 
¶51 Second, in evaluating whether Congress has exercised 
its Commerce Clause power in the field of state taxation of air 
carriers, we find it significant that Congress entitled 49 
U.S.C.A. § 40116(d), "Unreasonable burdens and discrimination 
against interstate commerce."  This title invokes the same test 
used in dormant Commerce Clause review, demonstrating——with 
unmistakable clarity——that Congress intended to exercise its 
Commerce Clause power in the field of state taxation of air 
carriers and thereby preclude dormant Commerce Clause review. 
¶52 Congress intended to allow state taxation of air 
carriers but also prevent unfair methods of taxation.  In 49 
U.S.C.A. § 40116(b) and (d) it enumerated the unfair methods of 
taxation.  When Congress enacted § 40116, its power under the 
Commerce Clause ceased to be dormant in the field of state 
taxation of air carriers.  Cf. Ne. Bancorp, Inc., 472 U.S. at 
174 ("When Congress so chooses, state actions which it plainly 
authorizes are invulnerable to constitutional attack under the 
Commerce Clause."); Wardair Canada, Inc. v. Fla. Dep't of 
Revenue, 477 U.S. 1, 9 (1986) (noting that when the federal 
government affirmatively acts, dormant Commerce Clause analysis 
is not warranted).  Congress prohibited a number of taxes and 
No. 2004AP319 
 
28 
 
types of tax assessment and collection practices.  49 U.S.C.A. 
§ 40116(b) and (d).  Congress also authorized the states to 
impose any type of tax and to use any tax assessment or 
collection practice not prohibited by § 40116(b) or (d).  49 
U.S.C.A. § 40116(e).  Because § 40116(e) authorizes the states 
to collect property taxes from air carriers, and because the hub 
exemption does not fall within any of the assessment or 
collection practices prohibited by the statute, we conclude the 
hub exemption is not subject to dormant Commerce Clause review. 
¶53 Even though we have concluded that 49 U.S.C.A. § 40116 
precludes review of the hub exemption under the dormant Commerce 
Clause, we must determine whether the hub exemption contravenes 
either the Equal Protection Clause of the United States 
Constitution 
or 
the 
Uniformity 
Clause 
of 
the 
Wisconsin 
Constitution.  See W. & S. Life Ins. Co., 451 U.S. at 655-56 
(1981). 
B. 
Does the Hub Exemption Violate the Equal Protection Clause? 
 
¶54 State tax classifications require only a rational 
basis to satisfy the Equal Protection Clause.  Gen. Motors Corp. 
v. Tracy, 519 U.S. 278, 311 (1997).  "[I]n taxation, even more 
than in other fields, legislatures possess the greatest freedom 
in classification."  Id.  To survive an equal protection 
challenge, a classification made by the legislature that does 
not concern a suspect class or implicate a fundamental right 
must bear a rational relationship to a legitimate government 
interest.  Ferdon v. Wis. Patients Compensation Fund, 2005 WI 
No. 2004AP319 
 
29 
 
125, ¶¶60-65, 284 Wis. 2d 573, 701 N.W.2d 440; State v. Hezzie 
R., 219 Wis. 2d 848, 894, 580 N.W.2d 660 (1998). 
¶55 Since the hub exemption implicates neither a suspect 
class 
nor 
a 
fundamental 
right, 
we 
will 
uphold 
the 
classifications as reasonable if, under any state of facts that 
can be reasonably conceived, the classification advances a 
legitimate governmental purpose.  Ferdon, 284 Wis. 2d 573, ¶¶71-
72 & n.77; Aicher v. Wis. Patients Compensation Fund, 2000 WI 
98, 
¶57, 
237 
Wis. 2d 99, 
613 
N.W.2d 849; 
State 
ex 
rel. 
Hammermill Paper Co. v. La Plante, 58 Wis. 2d 32, 74, 205 
N.W.2d 784 (1973). 
 
¶56 The 
Single Airport 
hub 
exemption 
classifies air 
carriers into two groups: those that operate at least 45 daily 
flights out of a single Wisconsin airport to at least 15 nonstop 
destinations versus those that operate less than 45 daily 
flights out of a single Wisconsin airport and/or that fly to 
less 
than 
15 
nonstop 
destinations. 
 
See 
Wis. Stat. § 70.11(42)(a)2.a.  The Headquarters hub exemption 
also classifies air carriers into two groups: those whose 
corporate headquarters are in Wisconsin and operate at least 20 
common carrier departing flights each weekday versus those whose 
corporate headquarters are not in Wisconsin and/or do not 
operate at least 20 common carrier departing flights each 
weekday.  § 70.11(42)(a)2.b.  The legislature chose to classify 
air carriers based on the amount and type of business activity 
they conduct in Wisconsin.  We must accept the classifications 
adopted by the legislature "unless we can say that [they are] 
No. 2004AP319 
 
30 
 
very wide of any reasonable mark."  Stanhope v. Brown County, 90 
Wis. 2d 823, 843 n.11, 280 N.W.2d 711 (1979) (quoting Louisville 
Gas & Elec. Co. v. Coleman, 277 U.S. 32, 41 (1928)). 
 
¶57 The legislature could have rationally concluded that a 
number of legitimate governmental purposes are advanced by 
exempting air carriers that conduct a minimum level of business 
in Wisconsin or that are headquartered in Wisconsin.  The 
Legislative Fiscal Bureau documented many of the expected 
benefits of the hub exemption in a summary of the 2001-2003 
budget.  Legislative Fiscal Bureau Paper # 899. 
¶58 The Legislative Fiscal Bureau noted the hub exemption 
would likely help retain an existing hub facility in Wisconsin 
or might encourage additional air carriers to expand in 
Wisconsin.  Id. at 2-3.  Expected benefits of a hub facility 
included: (1) more nonstop flights to and from the state, which 
would encourage existing business to remain in-state and help 
attract new businesses to the state; (2) an increase of all 
flights to and from the state; and (3) an increase in jobs in 
the state.  Id. 
¶59 Three historical facts demonstrate the rational basis 
for the belief that the hub exemption was necessary to protect 
Wisconsin's transportation infrastructure and economy.  First, 
in the early 1990s, Northwest downsized its Wisconsin presence, 
opting to expand its operations in Minnesota, in response to a 
public financing and incentive package of approximately $761 
No. 2004AP319 
 
31 
 
million.21  Minnesota Legislative Reference Library, Resources on 
Minnesota Issues Northwest Airlines and the State of Minnesota, 
http://www.leg.state.mn.us/lrl/issues/nwa.asp (last visited June 
30, 2006).  When Northwest reduced its Wisconsin presence, 
Milwaukee lost about 100 jobs.  The legislature could have 
reasonably believed that the hub exemption would guard against 
the loss of more jobs and prevent a further drop in the number 
of flights to and from Wisconsin. 
¶60 Second, at the time the legislature drafted and passed 
the hub exemption, Midwest was planning a nearly $1 billion 
expansion.  Dennis Chaptman, Midwest Express turns attention to 
tax cut, Milwaukee J. Sentinel (Feb. 15, 2000), at 1D.  Midwest, 
however, was undecided about where to expand.  Id.  The 
legislature 
could 
have 
reasonably 
believed 
that 
the 
hub 
exemption would influence Midwest to expand in Wisconsin. 
¶61 Third, Air Wisconsin was also planning to expand its 
operations.  Avrum D. Lank, Panel OKs airlines tax break, 
Milwaukee J. Sentinel (Feb. 7, 2001), at 1D.  Like Midwest, Air 
Wisconsin was uncertain about where it would expand: Wisconsin, 
Illinois, or Indiana.  Id.  Again, the legislature could have 
reasonably believed that the hub exemption would influence Air 
                                                 
21 Minnesota 
initially 
offered 
Northwest 
a 
financial 
assistance package of $838 million before the parties agreed 
upon a package of $761 million.  Minnesota Legislative Reference 
Library, Resources on Minnesota Issues Northwest Airlines and 
the 
State 
of 
Minnesota, 
http://www.leg.state.mn.us/lrl/issues/nwa.asp (last visited June 
30, 2006). 
No. 2004AP319 
 
32 
 
Wisconsin to expand in Wisconsin.  In short, we conclude that 
the legislature could have reasonably determined that creating 
the hub exemption would help retain air carriers with a 
Wisconsin hub facility, which would bolster economic development 
in Wisconsin, a legitimate governmental purpose. 
C. 
Does the Hub Exemption Violate the Uniformity Clause? 
¶62 The Uniformity Clause of the Wisconsin Constitution 
provides: "The rule of taxation shall be uniform . . . . Taxes 
shall be levied upon such property . . . as the legislature 
shall proscribe."  Wis. Const. art. VIII, § 1.  The Uniformity 
Clause requires that there be one class of taxable property and 
that all property within that class must, as nearly as 
practicable, be taxed uniformly, unless otherwise provided in 
Article VIII, Section 1.  See Noah's Ark Family Park v. Bd. of 
Review, 210 Wis. 2d 301, 317-18, 565 N.W.2d 230 (Ct. App. 1997) 
aff'd 216 Wis. 2d 387, 390, 573 N.W.2d 852 (1998) (adopting the 
analysis of the court of appeals).  We have consistently held 
that a tax conforms to the Uniformity Clause if it meets the 
following standards: 
1. 
For direct taxation of property, under the 
uniformity rule there can be but one constitutional 
class. 
2. 
All within that class must be taxed on a 
basis of equality so far as practicable and all 
property taxed must bear its burden equally on an ad 
valorem basis. 
3. 
All property not included in that class must 
be absolutely exempt from property taxation. 
No. 2004AP319 
 
33 
 
4. 
Privilege taxes are not direct taxes on 
property and are not subject to the uniformity rule. 
5. 
While there can be no classification of 
property for different rules or rates of property 
taxation, the legislature can classify as between 
property that is to be taxed and that which is to be 
wholly exempt, and the test of such classification is 
reasonableness. 
6. 
There can be variations in the mechanics of 
property assessment or tax imposition so long as the 
resulting taxation shall be borne with as nearly as 
practicable equality on an ad valorem basis with other 
taxable property. 
State ex rel. Ft. Howard Paper Co. v. State Lake Dist. Bd. of 
Review, 82 Wis. 2d 491, 506, 263 N.W.2d 178 (1978) (quoting 
Gottlieb v. City of Milwaukee, 33 Wis. 2d 408, 424, 147 N.W.2d 
633, 641 (1967)) (emphasis added). 
¶63 Northwest 
argues 
the 
hub 
exemption 
arbitrarily 
distinguishes between itself and Midwest because there is no 
meaningful 
basis 
for 
any 
distinction. 
 
Thus, 
Northwest 
concludes, the distinction made by the hub exemption cannot bear 
a reasonable relationship to a legitimate governmental purpose. 
¶64 DOR counters that the legislature is free to tax some 
property and wholly exempt other property as long as the basis 
for classifying the property differently is reasonably related 
to a legitimate governmental purpose.  DOR argues the hub 
exemption 
advances 
the 
legitimate 
governmental 
purpose of 
promoting a robust air transportation system in Wisconsin, a 
vital component of a strong economy.  DOR notes the hub 
exemption (1) encourages airlines to add or retain non-stop 
flights from Wisconsin, which has a positive impact on economic 
No. 2004AP319 
 
34 
 
development; (2) encourages airlines to expand or remain in 
Wisconsin, generally; and (3) generates and retains jobs in 
Wisconsin. 
¶65 We conclude there is no argument that can prove beyond 
a 
reasonable 
doubt 
that 
the 
hub 
exemption 
violates 
the 
Uniformity Clause.  Norquist, 211 Wis. 2d at 250; Bd. of 
Trustees of Lawrence Univ. v. Outagamie County, 150 Wis. 244, 
246, 136 N.W. 619 (1912).  "All legislative acts are presumed 
constitutional and every presumption must be indulged to uphold 
the law if at all possible."  Norquist, 211 Wis. 2d at 250.  
This is especially true where the challenged statute involves a 
tax measure, because the presumption of constitutionality is the 
strongest for taxation-related statutes.  Id. 
¶66 The Uniformity Clause grants the legislature the right 
to select some property for taxation and to totally omit or 
exempt other property.  Gottlieb, 33 Wis. 2d at 420.  The only 
limitation upon the legislature's authority to exempt property 
is that the distinction between taxed and wholly exempt property 
must bear "a reasonable relation to a legitimate purpose of 
government[.]"  Madison Gen. Hosp. Ass'n v. City of Madison, 92 
Wis. 2d 125, 129-30, 284 N.W.2d 603 (1979).  For the reasons 
stated under the equal protection analysis, we conclude the 
classifications made by the hub exemption are rationally related 
to the legitimate governmental purpose of ensuring the vitality 
of the Wisconsin economy. 
 
 
No. 2004AP319 
 
35 
 
V. CONCLUSION 
¶67 We conclude: (1) 49 U.S.C.A. § 40116 precludes dormant 
Commerce Clause review of the hub exemption; (2) the hub 
exemption does not violate the Equal Protection Clause of the 
United States Constitution; and (3) the hub exemption does not 
violate the Uniformity Clause of the Wisconsin Constitution.  
Finally, because we have determined that the hub exemption is 
valid, we need not reach the questions associated with whether 
Northwest complied with the procedural requirements for re-
determination of its assessment.  Accordingly, we reverse the 
circuit court's decision that the hub exemption violates the 
dormant Commerce Clause. 
By the Court.—The order of the circuit court is reversed. 
 
 
No.  2004AP319.ssa 
 
1 
 
¶68 SHIRLEY S. ABRAHAMSON, C.J.   (dissenting).  "The very 
purpose of the Commerce Clause was to create an area of free 
trade among the several States."1 The Wisconsin tax system 
favoring a Wisconsin hub carrier is a "homer," that is, it 
favors home air carrier companies.  Whatever else can be said 
about Wis. Stat. § 70.11(42), it flies in the face of the 
purpose of the Commerce Clause.   
¶69 The majority opinion concludes that 49 U.S.C. § 40116 
(2000)2 precludes Commerce Clause review of the hub exemption for 
ad valorem taxation in Wis. Stat. § 70.11(42) (2003-04).3  
Applying the test that the majority opinion sets forth regarding 
when a federal statute precludes Commerce Clause review of a 
state tax law, I conclude that Congress has not made it 
"unmistakably clear" that § 40116 authorizes the discriminatory 
tax created by the Wisconsin tax system favoring a Wisconsin hub 
air carrier company.  The Wisconsin tax system favoring a 
Wisconsin hub air carrier company must therefore be analyzed to 
determine 
whether 
it 
imposes 
an 
impermissible 
burden 
on 
interstate commerce.  Because I conclude that the Wisconsin tax 
system favoring a Wisconsin hub carrier imposes an impermissible 
burden on interstate commerce, interfering with the very purpose 
of the Commerce Clause, I dissent.  
 
                                                 
1 McLeod v. J.E. Dilworth Co., 322 U.S. 327, 330 (1944). 
2 Current through June 16, 2006. 
3 All references to the Wisconsin Statutes are to the 2003-
04 version. 
No.  2004AP319.ssa 
 
2 
 
I 
¶70 The first step in determining whether a state statute 
interferes with Congress's authority to regulate interstate 
commerce is to determine whether Congress has authorized the 
type of statute at issue.  A statute is spared review under the 
implied limitations of the Commerce Clause4 when Congress has 
provided "unmistakably clear" direction that a state statute is 
exempt from such review.5  "When Congress has struck the balance 
it deems appropriate, the courts are no longer needed to prevent 
States from burdening commerce, and it matters not that the 
courts would invalidate the state tax or regulation under the 
Commerce Clause in the absence of Congressional action."6 
                                                 
4 Courts and commentators have variously described the type 
of Commerce Clause jurisprudence at issue in this case as the 
"dormant" Commerce Clause, the "negative implications" of the 
Commerce Clause, and the "implied limitations" of the Commerce 
Clause.  These terms are interchangeable. 
5 Maine v. Taylor, 477 U.S. 131, 139 (1986) (citing S.-Cent. 
Timber Dev., Inc. v. Wunnicke, 467 U.S. 82, 91 (1984)) ("[The 
United States Supreme Court] has exempted state statutes from 
the 
implied 
limitations 
of 
the 
Clause 
only 
when 
the 
congressional 
direction 
to 
do 
so 
has 
been 
'unmistakably 
clear.'"); see also Wyoming v. Oklahoma, 502 U.S. 437, 458 
(1992) ("Congress must manifest its unambiguous intent before a 
federal statute will be read to permit or to approve such a 
violation of the Commerce Clause . . . ."); S.-Cent. Timber 
Dev., Inc. v. Wunnicke, 467 U.S. 82, 91 (1984) ("There is no 
talismanic 
significance to 
the phrase 
'expressly stated,' 
however; it merely states one way of meeting the requirement 
that for a state regulation to be removed from the reach of the 
dormant 
Commerce 
Clause, 
congressional 
intent 
must 
be 
unmistakably clear. The requirement that Congress affirmatively 
contemplate otherwise invalid state legislation is mandated by 
the policies underlying dormant Commerce Clause doctrine."). 
6 Merrion v. Jicarilla Apache Tribe, 455 U.S. 130, 154 
(1982). 
No.  2004AP319.ssa 
 
3 
 
¶71  In contrast, the United States Supreme Court has also 
explained that, when Congress has not "'expressly stated its 
intent and policy' to sustain state legislation from attack 
under the Commerce Clause, [a court has] no authority to rewrite 
its legislation based on mere speculation as to what Congress 
'probably had in mind.'"7  State laws that "discriminatorily 
regulate or unduly burden interstate commerce are presumptively 
unconstitutional unless Congress enacts legislation to the 
contrary."8 
¶72 To determine whether 49 U.S.C. § 40116 authorizes the 
hub exemption at issue in the instant case, I first set forth 
the state hub exemption and then determine whether § 40116 makes 
"unmistakably clear" that the Wisconsin hub exemption is spared 
analysis under the Commerce Clause. 
¶73 Wisconsin 
Stat. 
§ 70.11 provides 
for 
classes of 
property exempt from property taxation.  One of the exemptions 
is for an "air carrier company" with a hub facility in the 
State. 9 
                                                 
7 New England Power Co. v. New Hampshire, 455 U.S. 331, 343 
(1982) (citations omitted) (quoting Prudential Ins. Co. v. 
Benjamin, 328 U.S. 408, 427, 431 (1946) and United States v. 
Pub. Util. Comm'n of Cal., 345 U.S. 295, 319 (1953) (Jackson, 
J., concurring)).  
8 Majority op., ¶31 (citing 1 Laurence H. Tribe, American 
Constitutional Law 1039 (3d ed. 2000)). 
9 An "air carrier company" is "any person engaged in the 
business of transportation in aircraft of persons or property 
for 
hire 
on 
regularly 
scheduled 
flights." 
 
Wis. 
Stat. 
§ 70.11(42)(a)1.  Aircraft is defined as "a completely equipped 
operating unit, including spare flight equipment, used as a 
means of conveyance in air commerce."  Wis. Stat. § 76.02(1). 
No.  2004AP319.ssa 
 
4 
 
¶74 Section 70.11 defines a "hub facility" as follows: 
a. A facility at an airport from which an air 
carrier company operated at least 45 common carrier 
departing flights each weekday in the prior year and 
from which it transported passengers to at least 15 
nonstop destinations, as defined by rule by the 
department of revenue, or transported cargo to nonstop 
destinations, as defined by rule by the department of 
revenue. 
b. An airport or any combination of airports in 
this 
state 
from 
which 
an 
air 
carrier 
company 
cumulatively operated at least 20 common carrier 
departing flights each weekday in the prior year, if 
the air carrier company's headquarters, as defined by 
rule by the department of revenue, is in this state.10 
¶75 The 
question, 
then, 
when 
considering 
49 
U.S.C. 
§ 40116, 
is 
whether 
Congress 
with 
"unmistakable 
clarity" 
endorsed state taxation statutes that discriminate in taxing  
air carrier companies based on whether the air carrier company 
has a certain number of flights originating in the taxing state 
and whether the air carrier company has a headquarters in the 
taxing state.  I conclude that Congress did not do so. 
¶76 As the majority opinion points out, three subsections 
of 49 U.S.C. § 40116 are relevant in the instant case.  First, 
§ 40116(b) prohibits four types of taxation on air carrier 
companies: 
(b) Prohibitions.  Except as provided in subsection 
(c) of this section and section 40117 of this title, a 
State, a political subdivision of a State, and any 
person that has purchased or leased an airport under 
section 47134 of this title, may not levy or collect a 
tax, fee, head charge, or other charge on—— 
(1) an individual traveling in air commerce; 
                                                 
10 Wis. Stat. § 70.11(42)(a)2. 
No.  2004AP319.ssa 
 
5 
 
(2) the transportation of an individual traveling 
in air commerce; 
(3) the sale of air transportation; or 
(4) the gross receipts from that air commerce or 
transportation.11 
¶77 Section 40116(d) prohibits other practices that the 
Congress deemed unreasonable burdens and discrimination against 
interstate commerce: 
(d) Unreasonable burdens and discrimination against 
interstate commerce. 
(1) [definitions] . . . . 
(2)(A) A State . . . may not do any of the following 
acts 
because 
those 
acts 
unreasonably 
burden and 
discriminate against interstate commerce: 
(i) assess air carrier transportation property at 
a value that has a higher ratio to the true market 
value of the property than the ratio that the assessed 
value of other commercial and industrial property of 
the same type in the same assessment jurisdiction has 
to the true market value of the other commercial and 
industrial property. 
(ii) levy or collect a tax on an assessment that 
may not be made under clause (i) of this subparagraph. 
(iii) levy or collect an ad valorem property tax 
on air carrier transportation property at a tax rate 
greater than the tax rate applicable to commercial and 
industrial 
property 
in 
the 
same 
assessment 
jurisdiction. 
(iv) levy or collect a tax, fee, or charge, first 
taking effect after August 23, 1994, exclusively upon 
                                                 
11 49 U.S.C. § 40116(c) permits a state to "collect a tax on 
or related to a flight of a commercial aircraft or an activity 
or service on the aircraft only if the aircraft takes off or 
lands in the State . . . ." 
49 U.S.C. § 40117 deals with "passenger facility fees," and 
allows for certain types of fees. 
No.  2004AP319.ssa 
 
6 
 
any business located at a commercial service airport 
or operating as a permittee of such an airport other 
than a tax, fee, or charge wholly utilized for airport 
or aeronautical purposes.12 
¶78 Section 40116(e) permits certain types of taxes and 
charges except as provided in 49 U.S.C. § 40116(d): 
(e) Other allowable taxes and charges.  Except as 
provided in subsection (d) of this section, a State or 
political subdivision of a State may levy or collect—— 
(1) taxes (except those taxes enumerated in 
subsection (b) of this section), including property 
taxes, net income taxes, franchise taxes, and sales or 
use taxes on the sale of goods or services; and 
(2) reasonable rental charges, landing fees, and 
other service charges from aircraft operators for 
using airport facilities of an airport owned or 
operated by that State or subdivision. 
¶79 Nowhere in 49 U.S.C. § 40116 is it "expressly stated" 
that a discriminatory tax exemption for an air carrier company 
that has a hub in the taxing state is authorized.  Nothing in 49 
U.S.C. § 40116 expressly permits the hub exemption in Wis. Stat. 
§ 70.11.  Section 40116(e) permits taxation of an air carrier 
company's property, but it neither approves nor prohibits 
taxation of an air carrier company's property that discriminates 
                                                 
12 49 
U.S.C. 
§ 40116(d)(1) 
contains 
the 
following 
definitions relevant to the instant case: 
(A) 
"air 
carrier 
transportation 
property" 
means 
property . . . that 
an 
air 
carrier 
providing 
air 
transportation owns or uses. 
. . . . 
(D) 
"commercial 
and 
industrial 
property" 
means 
property (except transportation property and land used 
primarily for agriculture or timber growing) devoted 
to a commercial or industrial use and subject to a 
property tax levy. 
No.  2004AP319.ssa 
 
7 
 
against certain air carriers based on their connection to the 
taxing state.  Thus, there is nothing in the text of the statute 
that supports the majority opinion's proposition that Congress 
has made it "unmistakably clear" that a state may provide tax 
exemptions based on the amount of business an air carrier 
company does within a state.    
¶80 Nothing in 49 U.S.C. § 40116 prohibits the hub 
exemption in Wis. Stat. § 70.11.  That is, none of the various 
prohibitions in § 40116(b) and (d) applies to § 70.11.  Nothing 
in 49 U.S.C. § 40116 expressly prohibits a discriminatory tax 
exemption for an air carrier company that has a hub in the 
taxing state.  That 49 U.S.C. § 40116(d) does not prohibit the 
hub exemption does not mean that Congress, in enacting § 40116, 
made it "unmistakably clear" that a tax scheme like Wisconsin's 
hub exemption is spared Commerce Clause scrutiny. 
¶81 In sum, the federal statute permits certain taxes and 
prohibits certain taxes, but is silent about a tax exemption 
such as the one in Wis. Stat. § 70.11; § 70.11 fits neither the 
permitted nor prohibited classes.  The majority errs when it 
declares that the structure of 49 U.S.C. creates two types of 
taxes on air carrier companies and that taxes not prohibited 
under either subsection (b) or (d) are authorized by subsection 
(e).13  Because the majority begins its analysis with this 
erroneous 
conclusion 
about 
subsection 
(e), 
its 
ultimate 
conclusion is, by definition, wrong.    
                                                 
13 Majority op., ¶37. 
No.  2004AP319.ssa 
 
8 
 
¶82 The case law supports my reading of 49 U.S.C. § 40116 
as not rising to the level of "unmistakably clear" authorization 
of discriminatory tax exemptions such as the hub exemption.  In 
Northwest Airlines, Inc. v. County of Kent, Michigan, 510 U.S. 
355, (1994), the United States Supreme Court recognized that the 
predecessor to § 40116(e) was a savings clause.14  That is, 
§ 40116(e) is intended to make clear that certain state taxes 
and fees that might otherwise have been prohibited by § 40116(b) 
and (d) are not prohibited.15  Section 40116(e) was intended to 
preserve then-existing state tax powers rather than to confer 
new powers to tax on the states.     
¶83 The United States Court of Appeals for the First 
Circuit reached a similar conclusion, stating that 49 U.S.C. 
§ 40116(e), "[f]ar from a clear manifestation of congressional 
intent 
to . . . [create 
new 
rights] . . . merely 
preserves 
                                                 
14 For the purposes of the instant case, 49 U.S.C. § 1513, 
the predecessor to § 40116, was not materially different. 
15 Nw. Airlines, Inc. v. County of Kent, Michigan, 510 U.S. 
355, 365-66 (1994) (citing Wardair Canada Inc. v. Fla. Dep't of 
Revenue, 477 U.S. 1, 15-16 (1986) (Burger, C.J., concurring in 
part and concurring in judgment)). 
In County of Kent, 510 U.S. at 365-66, the Supreme Court 
explained the savings clause in the predecessor to § 40116 as 
follows: 
But § 1513(a) does not stand alone.  That subsection's 
prohibition is immediately modified by § 1513(b)'s 
permission. Sections 1513(a) and (b) together instruct 
that airport user fees are permissible only if, and to 
the extent that, they fall within § 1513(b)'s saving 
clause, which removes from § 1513(a)'s ban "reasonable 
rental charges, landing 
fees, and 
other 
service 
charges from aircraft operators for the use of airport 
facilities." 
No.  2004AP319.ssa 
 
9 
 
certain rights of taxation already held by the states."16  In 
short, nothing in § 40116 expressly authorizes a tax exemption 
such as the hub exemption.   
¶84 The majority opinion cites two cases as supporting the 
proposition that 49 U.S.C. § 40116 authorizes the tax at issue 
in the instant case.  However, both of those cases are 
inapposite to the issue currently before the court. 
¶85 In American Airlines v. County of San Mateo, 912 P.2d 
1198 (Cal. 1996), the California supreme court held that the 
predecessor to 49 U.S.C. § 40116(d) did not prohibit railroad 
and air carrier property from being taxed at different rates.  
Personal property of air carrier companies was assessed at 100% 
of full market value; railroad personal property was assessed at 
70% of full market value.  Even assuming that the California 
court is correct, this analysis does not answer the statutory 
"unmistakably clear" question presented in the instant case for 
two reasons.  
¶86 First, the instant case deals not with discrimination 
between types of transportation property, but, rather, between 
an in-state and out-of-state air carrier company's property.  
Second, even if these two situations were analogous, concluding 
that 49 U.S.C. § 40116 does not prohibit certain types of 
discrimination is very different from concluding that the 
statute authorizes (with "unmistakable clarity") this type of 
discrimination.  Nothing in § 40116 supports such an inference. 
                                                 
16 United Parcel Serv., Inc. v. Flores-Galarza, 318 F.3d  
323, 337 (1st Cir. 2003). 
No.  2004AP319.ssa 
 
10 
 
¶87 The majority also relies on Department of Revenue of 
Oregon v. ACF Industries, 510 U.S. 332 (1994).  In ACF 
Industries, the United States Supreme Court interpreted the 
Railroad Revitalization and Regulatory Reform Act (4-R Act).17  
The Supreme Court held that property tax exemptions for non-
railroad property were not prohibited by the provision in the 4-
R Act comparable to 49 U.S.C. § 40116(d).18         
¶88 Like American Airlines v. County of San Mateo, the ACF 
Industries case is clearly distinguishable from the instant case 
because it deals with discrimination between types of commercial 
properties, not with discrimination within a single type of 
                                                 
17 As the majority observes, the 4-R Act is the model for 49 
U.S.C. § 40116(d), and courts rely on cases interpreting the 4-R 
Act to interpret § 40116(d).  Majority op., ¶45 n.17. 
18 Dep't of Revenue of Or. v. ACF Indus., 510 U.S. 332, 335 
(1994). 
The majority opinion contends that the ACF Industries Court 
held that "principles of federalism" made it necessary to allow 
the tax exemptions because "the power to grant tax exemptions is 
among the traditional powers of the states and because states 
must be allowed to grant 'tax exemptions to encourage industrial 
development.'"  Majority op., ¶46 (quoting ACF Indus., 510 U.S. 
at 345).  
What the Supreme Court actually said is that there is 
nothing in the legislative history to support the conclusion 
that "Congress had any particular concern with property tax 
exemptions, or that Congress intended to prohibit exemptions in" 
the relevant provision of the 4-R Act.  ACF Indus., 510 U.S. at 
345.  In other words, the 4-R Act (and thus 49 U.S.C. § 40116) 
was not intended to prohibit property tax exemptions.  But, the 
issue in the present case is not whether § 40116 prohibits tax 
exemptions.  Rather, the issue is whether Congress authorized, 
with unmistakable clarity, air carrier company tax exemptions 
that discriminate against interstate commerce, thus removing 
those exemptions from Commerce Clause scrutiny.  
No.  2004AP319.ssa 
 
11 
 
commercial property based on how much business a particular 
company does in the state.  ACF Industries is thus no help in 
the instant case to determine whether 49 U.S.C. § 40116 
constitutes an "unmistakably clear" signal by Congress of 
approval for a discriminatory tax exemption in the present case 
for "home air carrier companies" but not other air carrier 
companies.   
¶89 Quite simply, the language of 49 U.S.C. § 40116 and 
the case law interpreting § 40116 do not support the proposition 
that 
Congress 
has 
authorized 
with 
"unmistakable 
clarity" 
property tax exemptions that discriminate on the basis of the 
amount of business an air carrier company does within the taxing 
state.  The majority opinion fails to build a persuasive case. 
¶90 The inquiry about Congress's "unmistakably clear" 
statement, it seems to me, ought to end here.  As the United 
States Supreme Court explained in New England Power Co. v. New 
Hampshire, 455 U.S. 331 (1982), Congress's intent to exempt 
certain types of state statutes from Commerce Clause analysis 
must be expressly stated.19   
¶91 Courts, including the United States Supreme Court, 
have not, however, always taken the "expressly stated" language 
literally and in some cases have considered a statute's purpose 
and history in determining whether there is unmistakably clear 
                                                 
19 New England Power, 455 U.S. at 343. 
No.  2004AP319.ssa 
 
12 
 
Congressional authorization.20  I therefore turn to the statutory 
and legislative history.   
¶92 I conclude that the statutory and legislative history 
and the purpose support the conclusion that 49 U.S.C. § 40116 
does not authorize states to discriminate between air carrier 
companies based on whether they have a hub in the state.  While 
the statutory and legislative history does not evince an intent 
to prohibit such statutes, it also does not authorize them with 
unmistakable clarity, which is required to foreclose Commerce 
Clause scrutiny.   
¶93 The predecessor to 49 U.S.C. § 40116 was first adopted 
in 1973.  The 1973 version of the statute included the 
predecessors to § 40116(b) and (e).21  The predecessor to 
§ 40116(d), the section prohibiting certain practices based on 
their effect on interstate commerce, was enacted in 1982.22 
                                                 
20 Maine v. Taylor, 477 U.S. 131, 140 (1986) (considering 
history of federal statute to determine whether Congress 
foreclosed Commerce Clause review with unmistakable clarity 
regarding state wildlife legislation prohibiting importation of 
live baitfish); United Egg Producers v. Dep't of Agric. of P.R., 
77 
F.3d 
567, 
571 
(1st 
Cir. 
1996) 
(same; 
egg 
labeling 
requirements for eggs imported to Puerto Rico); Goodman Oil Co. 
v. Idaho State Tax Comm'n, 28 P.3d 996, 1000-01 (Idaho 2001) 
(same; Indian tribe exemption from state excise tax). 
The majority ought to use federal methods of statutory 
interpretation of a federal statute.  It ought not impose this 
state's rules of statutory interpretation on a federal statute.  
See majority op., ¶36. 
21 See P.L. 93-44 (1973). 
22 See P.L. 97-248, § 532 (1982). 
No.  2004AP319.ssa 
 
13 
 
¶94 The 
1973 
statute 
was 
enacted 
in 
response 
to 
Evansville-Vanderburgh 
Airport 
Authority 
District 
v. 
Delta 
Airlines, Inc., 405 U.S. 707, 716-17 (1972), in which the United 
States Supreme Court held that a tax or fee on air travelers was 
not a violation of the Commerce Clause as long as the charges 
were reasonable.23  The Senate report on the bill indicated that 
Congress was concerned with the "chaos which local taxation 
brings on the national air transportation system."24  Thus, 
Congress sought to prohibit state and local governments from 
collecting head taxes on air carrier companies. 
¶95 Nothing in the limited legislative history regarding 
the 
1982 
amendments 
indicates 
that 
Congress 
intended 
to 
authorize discrimination among air carrier companies based on 
the amount of business a company does within a state.   
¶96 Courts look to the legislative history of the 4-R Act 
to construe 49 U.S.C. § 40116.25  The 4-R Act was passed in 1975, 
but similar legislation had been under consideration since at 
least 1961.  
However, like 
the 
1982 
amendments to the 
predecessor to 49 U.S.C. § 40116, nothing in the voluminous 
reports on the subject in 1961, 1969, or 1975 indicates that 
Congress intended to authorize discrimination among railroad 
                                                 
23 S. Rep. No. 93-12, at 17 (1973). 
24 Id.; see also 119 Cong. Rec. H11, 13897 (daily ed. May 2, 
1973) (statement of Rep. Clawson). 
25 See majority op., ¶45 n.17. 
No.  2004AP319.ssa 
 
14 
 
companies based on the amount of business a railroad company 
does within a state.26 
¶97 The United States Supreme Court explained the thrust 
of the legislative history on the 4-R Act in Western Air Lines, 
Inc. v. Board of Equalization of South Dakota, 480 U.S. 123, 131 
(1987).  The purpose of the 4-R Act (and, therefore, 49 U.S.C. 
§ 40116) was to insulate railroads from discrimination by states 
based on the fact that a railroad was an out-of-state business: 
The legislative history of the antidiscrimination 
provision 
in 
the 4-R 
Act demonstrates 
Congress' 
awareness that interstate carriers "are easy prey for 
State and local tax assessors" in that they are 
"nonvoting, 
often 
nonresident, 
targets 
for 
local 
taxation," who cannot easily remove themselves from 
the locality.27 
It seems inconceivable that a statute intended to circumscribe 
interstate discrimination would also authorize (without so 
stating 
with 
"unmistakable 
clarity") 
tax 
exemptions 
that 
discriminate based on the amount of business an air carrier 
company does within the taxing state. 
 
¶98 The 
majority 
opinion 
struggles 
mightily 
in 
17 
paragraphs, using intricate labyrinthine interpretive methods, 
to interpret 49 U.S.C. § 40116 as "unmistakably clear" in 
granting states authority to implement a tax discriminating 
among air carrier companies based on whether the air carrier 
company has a "hub" (as defined in Wis. Stat. § 70.11) in the 
                                                 
26 See S. Rep. No. 87-445, at 445-90 (1961); S. Rep. No. 91-
630, at 1-16 (1969); H.R. Rep. No. 94-725 (1975). 
27 W. Air Lines, Inc. v. Bd. of Equalization of S.D., 480 
U.S. 123, 131 (1987) (quoting S. Rep. No. 91-630, at 3 (1969)). 
No.  2004AP319.ssa 
 
15 
 
state.  The majority opinion essentially adopts the defendant's28 
argument that because Congress permitted property taxes and did 
not expressly prohibit property tax exemptions, exemptions such 
as the Wisconsin hub exemption are authorized.  The majority's 
interpretive tangle does not rise to the level of "explicit" 
Congressional 
authorization 
or 
an 
"unmistakably 
clear" 
authorization of discriminatory tax exemptions such as the hub 
exemption. 
¶99 Based on the text, the case law, and the statutory and 
legislative history, I conclude that, in adopting 49 U.S.C. 
§ 40116, Congress did not, with unmistakable clarity, authorize 
the 
states 
to 
implement 
a 
tax 
and 
tax 
exemption 
that 
discriminate among air carrier companies based on the amount of 
business they do in a state.  As a result, the hub exemption in 
Wis. Stat. § 70.11(42) must be scrutinized to determine whether 
it interferes with interstate commerce contrary to the implied 
limitations of the Commerce Clause. 
II 
¶100 The negative Commerce Clause jurisprudence has been 
described 
as 
a 
"tangled 
underbrush" 
and 
a 
"quagmire."29  
                                                 
28 The defendant in the instant case is the Department of 
Revenue.  Midwest Airlines, Inc. intervened as a defendant to 
protect its interest in maintaining the hub exemption.  Air 
Wisconsin, the other air carrier that benefits from the hub 
exemption, did not intervene.  Except where necessary to 
distinguish between the parties, in this opinion "defendant" 
refers to both the Department of Revenue and Midwest Airlines. 
29 Nw. States Portland Cement Co. v. Minnesota, 358 U.S. 
450, 457, 458 (1959), overruled by statute on other grounds as 
stated in Silent Hoist & Crane Co. v. Dir., Div. of Taxation, 
494 A.2d 775, 779 n.1 (N.J. 1985). 
No.  2004AP319.ssa 
 
16 
 
Nevertheless, several basic principles for analyzing a statute 
under the negative Commerce Clause can be determined from the 
case law.   
¶101 A state statute that directly discriminates against 
interstate commerce, or has the direct effect of favoring in-
state business, is almost always invalidated without further 
inquiry.  When the effect on interstate commerce is indirect, it 
must be determined (1) whether there is a legitimate state 
interest in the statute, and (2) whether the benefits to that 
interest outweigh the burden on interstate commerce.   
¶102 In Brown-Forman Distillers Corp. v. New York State 
Liquor Authority, 476 U.S. 573, 578-79 (1986), the United States 
Supreme Court outlined how it scrutinizes a statute under the 
implied limitations of the Commerce Clause as follows: 
This Court has adopted what amounts to a two-tiered 
approach to analyzing state economic regulation under 
the Commerce Clause.  When a state statute directly 
regulates 
or 
discriminates 
against 
interstate 
commerce, or when its effect is to favor in-state 
economic interests over out-of-state interests, we 
have generally struck down the statute without further 
inquiry.  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.  We have also recognized that there is no 
clear line separating the category of state regulation 
that is virtually per se invalid under the Commerce 
Clause, and the category subject to the Pike v. Bruce 
Church[, 397 U.S. 137, 142 (1970)] balancing approach. 
In either situation the critical consideration is the 
No.  2004AP319.ssa 
 
17 
 
overall effect of the statute on both local and 
interstate activity.30 
¶103 A 
statute 
that 
clearly 
discriminates 
against 
interstate commerce, either on its face or in direct effect, 
violates the implied limitations of the Commerce Clause "unless 
the discrimination is demonstrably justified by a valid factor 
unrelated to economic protectionism."31  The Supreme Court has 
further observed that when a "state statute amounts to simple 
economic protectionism, a 'virtually per se rule of invalidity' 
has applied."32  The Pike balancing test is not applied to a 
facially or directly discriminatory statute.33 
¶104 In state taxation cases, the U.S. Supreme Court has 
generally applied an additional, more specific test.  Under the 
test established in Complete Auto Transit, Inc. v. Brady, 430 
U.S. 274 (1977), a state tax is permissible under the implied 
                                                 
30 Citing City of Philadelphia v. New Jersey, 437 U.S. 617 
(1978); Shafer v. Farmers' Grain Co., 268 U.S. 189 (1925); Edgar 
v. MITE Corp., 457 U.S. 624, 640-643 (1982) (plurality opinion); 
Pike v. Bruce Church, Inc., 397 U.S. 137, 142 (1970); Raymond 
Motor Transp., Inc. v. Rice, 434 U.S. 429, 440-441 (1978). 
The Pike balancing test, referred to in Brown-Forman 
Distillers, states that when a "statute regulates even-handedly 
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."  Pike, 
397 U.S at 142. 
31 Wyoming v. Oklahoma, 502 U.S. 437, 454 (1992) (citing 
Maine v. Taylor, 477 U.S. 131 (1986)). 
32 Wyoming, 502 U.S. at 454 (quoting City of Philadelphia, 
437 U.S. at 624. 
33 See Pike, 397 U.S. at 142. 
No.  2004AP319.ssa 
 
18 
 
limitations of the Commerce Clause if (1) there is a substantial 
nexus between the taxed activity and the taxing State; (2) the 
tax is fairly apportioned; (3) the tax does not discriminate 
against interstate commerce; and (4) the tax is fairly related 
to the services provided by the State.34  The third element——the 
tax does not discriminate against interstate commerce, the test 
in general negative Commerce Clause jurisprudence——is important 
in the instant case.35  The Supreme Court has interpreted the 
Complete Auto test as stating that "'discrimination' simply 
means differential 
treatment 
of in-state and 
out-of-state 
economic interests that benefits the former and burdens the 
latter."36       
¶105 A review of the cases applying the Complete Auto test 
suggests that a facially or directly discriminatory state tax 
will be invalidated just as would any other facially or directly 
discriminatory legislation. 
¶106 In Boston Stock Exchange v. State Tax Commission, 429 
U.S. 318 (1977), six stock exchanges located outside of New York 
asserted a negative Commerce Clause challenge to a New York 
state statute that taxed securities transactions involving out-
                                                 
34 Complete Auto Transit, Inc. v. Brady, 430 U.S. 274, 279 
(1977); Dep't of Revenue, State of Wash. v. Ass'n of Wash. 
Stevedoring Cos., 435 U.S. 734, 750 (1978). 
35 The other three elements of the Complete Auto test appear 
to be additional requirements for state taxes. 
36 Or. Waste Sys., Inc. v. Dep't of Envtl. Quality of Or., 
511 U.S. 93, 99 (1994). 
No.  2004AP319.ssa 
 
19 
 
of-state sales more heavily than those involving in-state 
sales.37 
¶107 The Supreme Court invalidated the application of a 
higher tax on out-of-state sales.38  In invalidating the tax, the 
Supreme Court considered the history of the New York tax statute 
and determined that the statute was enacted for economic 
protection, that is, to help the New York Stock Exchange and 
encourage it to remain in New York.39  The Supreme Court observed 
that the tax was invalid because the state was using its taxing 
power as a means of forcing more business into the state: 
[T]he State is using its power to tax an in-state 
operation as a means of requiring other business 
operations to be performed in the home State. As a 
consequence, the flow of securities sales is diverted 
from the most economically efficient channels and 
directed to New York. This diversion of interstate 
commerce 
and 
diminution 
of 
free 
competition 
in 
securities sales are wholly inconsistent with the free 
trade purpose of the Commerce Clause.40 
                                                 
37 Boston Stock Exch. v. State Tax Comm'n, 429 U.S. 318, 
319-20 (1977). 
The taxes at issue in Boston Stock Exchange all involved a 
"taxable event" in New York.  Id., 321-23. 
38 Boston Stock Exch., 429 U.S. at 328. 
39 Id. at 323-28. 
40 Id. at 336 (quoted source omitted). 
The Court also observed in Boston Stock Exchange, 429 U.S. 
at 336-37, that a taxation system could still be used to 
encourage business growth and to compete with businesses from 
other states, 
as 
long as 
the taxation system 
does not 
discriminate: 
Our decision today does not prevent the States from 
structuring their tax systems to encourage the growth 
and development of intrastate commerce and industry. 
No.  2004AP319.ssa 
 
20 
 
¶108 Thus, because the tax was directly discriminatory 
against 
out-of-state 
business, 
it 
violated 
the 
implied 
limitations of the Commerce Clause.   
¶109 This outcome is unsurprising.  As early as 1958, the 
Supreme Court observed in Northwestern States Portland Cement 
Co. v. Minnesota, 358 U.S. 450, 457 (1959), that a state may not 
"impose 
a 
tax 
which 
discriminates 
against 
interstate 
                                                                                                                                                             
Nor do we hold that a State may not compete with other 
States for a share of interstate commerce; such 
competition lies at the heart of a free trade policy.  
We hold only that in the process of competition no 
State 
may 
discriminatorily 
tax 
the 
products 
manufactured or the business operations performed in 
any other State. 
The tax exemption also may have a coercive effect to force 
air carriers to do more business in Wisconsin.  See Westinghouse 
Elec. Corp. v. Tully, 466 U.S. 388, 406 (1984) (a New York tax 
credit that increased as the amount of exports from New York 
increased violated the commerce clause because it discriminated 
against export shipping from other states).   
For a discussion of how the U.S. Supreme Court has gone 
about 
distinguishing 
between 
state 
tax 
regulations 
that 
impermissibly discriminate and those regulations that are held 
to be permissible "location incentive" tax regulations, see 
Walter Hellerstein & Dan T. Coenen, Commerce Clause Restraints 
on State Business Development Incentives, 81 Cornell L. Rev. 789 
(1996). 
Hellerstein and Coenen further conclude that the Supreme 
Court has given little guidance as to how a state tax scheme can 
encourage growth and development within the state without 
offending the Commerce Clause.  Id. at 795-96.  They explain the 
distinction between tax schemes that violate the Commerce Clause 
and those that do not and the distinction between permissible 
and impermissible property tax incentives.  The instant case is 
clearly 
more 
like 
the 
impermissible 
examples 
offered 
by 
Hellerstein and Coenen. 
 
No.  2004AP319.ssa 
 
21 
 
commerce . . . by providing a direct commercial advantage to 
local business . . . ."41  The taxes in most of the cases in 
which the Supreme Court has upheld a state tax against negative 
Commerce Clause challenges are not directly discriminatory.42 
¶110 Applying the case law to the instant case, I conclude 
that the tax is facially discriminatory.  Air carrier companies 
pay the ad valorem tax only if they do not do enough business in 
Wisconsin.  The hub exemption in Wis. Stat. § 70.11(42) applies 
only to businesses that the legislature is satisfied do "enough" 
business in the state.   
                                                 
41 Nw. States Portland Cement, 358 U.S. at 458; see also Am. 
Trucking Ass'ns, Inc. v. Schneiner, 483 U.S. 266 (1987) 
(invalidating lump sum annual tax on operating trucks in 
Pennsylvania as directly discriminatory, and therefore invalid, 
because it imposed disproportionate share of costs on out-of-
state businesses); Maryland v. Louisiana, 451 U.S. 725 (1981) 
(Louisiana's "first-use" tax, imposing tax on imported but not 
in-state natural gas, invalid discrimination against interstate 
commerce); Burlington N., Inc. v. City of Superior, 131 
Wis. 2d 564, 575-76, 388 
N.W.2d 916 
(1986) 
(tax 
exemption 
invalid where "only real effect of the exemption . . . is to 
enhance or encourage the Wisconsin metalliferous mining industry 
at the expense of out-of-state miners"). 
42 See, e.g., Okla. Tax Comm'n v. Jefferson Lines, Inc., 514 
U.S. 175 (1995) (uniform state sales tax valid when applied to 
tickets for interstate bus travel); Itel Containers Int'l Corp. 
v. Huddleston, 507 U.S. 60 (1993) (sales tax on cargo containers 
in state valid when applied to shipper with only international 
business); Quill Corp. v. North Dakota, 504 U.S. 298 (1992) 
(uniform use tax valid when applied to mail order company with 
no physical presence in state); Dep't of Revenue, State of Wash. 
v. Ass'n of Wash. Stevedoring Cos., 435 U.S. 734 (1978) (equally 
apportioned tax on value of goods loaded and unloaded in state 
valid when applied to out-of-state corporation).  But see 
Complete Auto Transit, Inc. v. Brady, 430 U.S. 274 (1977) 
(Mississippi tax on transportation of out-of-state goods into 
the state, the "privilege of doing business" tax, valid under 
principle that interstate commerce must "pay its own way"). 
No.  2004AP319.ssa 
 
22 
 
¶111 The 
tax, 
therefore, 
is 
invalid 
as 
directly 
discriminatory against interstate commerce.  The defendants have 
not shown that the discrimination is demonstrably justified by a 
valid factor unrelated to economic protectionism.43  Indeed, as 
the majority opinion explains, the purpose of the exemption (and 
the 
discrimination) 
is 
to 
protect 
jobs, 
encourage 
the 
development of additional air transportation facilities in 
Wisconsin, 
and 
preserve 
the 
state's 
competitiveness 
in 
attracting and retaining business.44   
¶112 Just like the taxes invalidated by the United States 
Supreme Court in Boston Stock Exchange and Northwest States 
Portland Cement and invalidated by this court in Burlington 
Northern, Inc. v. City of Superior, 131 Wis. 2d 564, 388 
N.W.2d 916 (1986), the tax in the instant case discriminates 
against interstate commerce by providing a direct commercial 
advantage to companies that do enough business in the state.  
Only if an air carrier company does enough business in the state 
(as defined in § 72.11(42)) does it get the benefit of not 
paying the ad valorem tax.  Thus, the tax and exemption together 
make up a tax that discriminates against interstate commerce by 
providing a tax advantage to in-state businesses.45   
¶113 Because the tax and exemption at issue in the instant 
case directly discriminate against out-of-state air carrier 
companies based on the amount of business an air carrier does in 
                                                 
43 See Wyoming v. Oklahoma, 502 U.S. 437, 454 (1992). 
44 Majority op., ¶¶1, 18-22. 
45 See Nw. States Portland Cement, 358 U.S. at 457. 
No.  2004AP319.ssa 
 
23 
 
the state, and because the tax system does not support a non-
discriminatory state interest, I conclude that the tax and 
exemption, taken together, are unconstitutional as a violation 
of the implied limitations of the Commerce Clause. 
III 
¶114 Having concluded that the hub and headquarters tax 
exemptions are unconstitutional, I must now consider the remedy. 
¶115 Northwest, which doesn't want to pay its taxes, would 
like this court to strike down the entire ad valorem tax.46  It 
therefore contends that the exemption is not severable from the 
rest of the tax statute.  It argues that striking down the 
exemption instead of the entire statute would create a tax 
contrary to the legislative intent,47 which was, according to 
Northwest, to exempt air carrier companies from taxation.  
¶116 I do not agree.  The proper remedy in the instant case 
is to invalidate the hub exemption in Wis. Stat. § 70.11(42).  
Under Wis. Stat. § 990.001(11), the general rule is that the 
invalidity of a statutory provision "shall not affect other 
provisions or applications which can be given effect without the 
invalid provision or application."  The rule of severability 
                                                 
46 The Department of Revenue, of course, opposes this 
result.  Unsurprisingly, Midwest Airlines does not.  Midwest has 
not been paying taxes because of the exemption.  If the 
exemption were invalidated, Midwest (as well as Air Wisconsin, 
which did not intervene in the instant case) would have to start 
paying. 
47 See Burlington N., Inc. v. Superior, 131 Wis. 2d 564, 
580-84, 388 N.W.2d 916 (1986). 
No.  2004AP319.ssa 
 
24 
 
applies unless severability "would produce a result inconsistent 
with the manifest intent of the legislature."48   
¶117 Northwest's position is belied by the history of the 
ad valorem tax.  The exemption was enacted in 2001.49  The ad 
valorem tax, on the other hand, has existed since 1933.50  The ad 
valorem tax statute itself was not changed in any relevant 
manner when the exemption was enacted.  Clearly, the tax can 
exist independent of the exemption.   
¶118 Striking down the exemption would not defeat the 
intent of the legislature.  The statute was not intended to 
exempt air carrier companies from taxation.  As I have already 
explained, the intent was to exempt air carrier companies who do 
a lot of business in the state from taxation, thus creating an 
incentive for air carrier companies to do more business in 
Wisconsin.   
¶119 Striking down the tax altogether would not support the 
legislative purpose of charging a lower tax to air carrier 
companies who do more business in the state.  The result is that 
striking down the entire statute would no more effectuate the 
intent of the legislature than striking down just the exemption. 
¶120 I therefore agree with the circuit court that there is 
no reason to conclude that the legislature would not have 
enacted an ad valorem tax system for air carrier companies 
without an exemption for Wisconsin hub facilities.  Northwest 
                                                 
48 Wis. Stat. § 990.001(11). 
49 2001 Wis. Act 16, § 2109; majority op., ¶3. 
50 See § 3, ch. 349, Laws of 1933. 
No.  2004AP319.ssa 
 
25 
 
has not shown that the hub facility is so integral to the ad 
valorem tax system that it may not be severed.  I conclude, as 
did the circuit court, that the proper remedy is to strike down 
just the exemption portion of the ad valorem tax. 
¶121 For the reasons set forth, I dissent. 
¶122 I am authorized to state that Justice ANN WALSH 
BRADLEY joins this dissent. 
No.  2004AP319.ssa 
 
 
 
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