Source: https://supreme.justia.com/cases/federal/us/426/660/
Timestamp: 2019-04-19 10:30:52+00:00

Document:
Under the New Jersey Transportation Benefits Tax Act, New Jersey does not tax its residents' domestic income, but does tax nonresidents' New Jersey-derived income and imposes an equivalent tax on residents' income earned outside the State except that such income is exempted to the extent it is taxed by the State in which it is earned. The New Hampshire Commuters Tax was held unconstitutional in Austin v. New Hampshire, 420 U. S. 656, in violation of the Privilege and Immunities Clause because it fell exclusively on nonresidents' income and was not offset by other taxes imposed on residents alone. Pennsylvania, suing on behalf of itself and as parens patriae on behalf of its citizens, moved to file an original bill of complaint against New Jersey, contending that the New Jersey tax Act violates the Privileges and Immunities Clause as interpreted in Austin, supra, and also the Equal Protection Clause of the Fourteenth Amendment, and seeking declaratory and injunctive relief and an accounting for taxes diverted from its treasury by the New Jersey tax. Maine, Massachusetts, and Vermont on behalf of themselves, moved, in reliance on Austin, supra, to file an original bill of complaint against New Hampshire seeking an accounting for the taxes diverted from their respective treasuries by the New Hampshire Commuters Income Tax. Pennsylvania, Maine, Massachusetts, and Vermont all extend a tax credit to their residents for income taxes paid to other States.
1. The motions for leave to file bills of complaint based on claims brought by the plaintiff States on their own behalf are denied. In neither suit has the defendant State directly injured the plaintiff States by imposing the taxes in question, but the injuries to the plaintiffs' fiscs were self-inflicted, resulting from decisions by their respective state legislatures to allow their residents credit for taxes paid to other States. Moreover, the Privileges and Immunities and Equal Protection Clauses protect people, not States.
v. New Hampshire, 420 U. S. 656 (1975), in which we held the New Hampshire Commuters Income Tax unconstitutional.
The resident State of the plaintiff in Austin was Maine, and it provided a credit for income taxes paid to other States. Thus, New Hampshire's beggar-thy-neighbor tax rendered the total state tax liability of nonresidents unchanged, but diverted to New Hampshire tax revenues from the treasury of Maine. We held New Hampshire's taxing scheme unconstitutional, since the tax "[fell] exclusively on the income of nonresidents . . . , and [was] not offset even approximately by other taxes imposed upon residents alone." Id. at 420 U. S. 665 (footnote deleted).
Benefits Tax Act, however, New Jersey does tax the New Jersey-derived income of nonresidents. And while that Act imposes an equivalent tax on. the income of New Jersey residents earned outside the State, it exempts such income to the extent it is taxed by the State in which it is earned. Finally, like Maine in the Austin case, Pennsylvania permits a tax credit to any of its residents for income taxes paid to other States, including, of course, New Jersey. Pennsylvania, suing on behalf of itself and as parens patriae on behalf of its citizens, seeks declaratory and injunctive relief and, apparently, an accounting for the taxes that New Jersey's allegedly unconstitutional tax has diverted from the Pennsylvania treasury.
"To constitute such a [justiciable] controversy, it must appear that the complaining State has suffered a wrong through the action of the other State, furnishing ground for judicial redress. . . ."
"Missouri, in claiming a right to recover taxes from the . . . trustees, or in taking proceedings for collection, is not injuring Massachusetts. By the allegations, the property held in Missouri is amply sufficient to answer the claims of both States, and recovery by either does not impair the exercise of any right the other may have. It is not shown that there is danger of the depletion of a fund or estate at the expense of the complainant's interest. It is not shown that the tax claims of the two States are mutually exclusive. On the contrary, the validity of each claim is wholly independent of that of the other. . . ."
Tax Act violates both the Privileges and Immunities Clause and the Equal Protection Clause. Maine, Massachusetts, and Vermont claim that New Hampshire's withholding of taxes collected under its unconstitutional commuters tax violates the Privileges and Immunities Clause. The short answer to these contentions is that both Clauses protect people, not States.
The Court has recognized the legitimacy of parens patriae suits. See Hawaii v. Standard Oil Co., 405 U. S. 251, 405 U. S. 257-260 (1972); Louisiana v. Texas, 176 U. S. 1, 176 U. S. 19 (1900). It has, however, become settled doctrine that a State has standing to sue only when its sovereign or quasi-sovereign interests are implicated and it is not merely litigating as a volunteer the personal claims of its citizens. Compare, e.g., Oklahoma ex rel. Johnson v. Cook, 304 U. S. 387 (1938); Oklahoma v. Atchison, T. & S. F. R. Co., 220 U. S. 277 (1911); Kansas v. United States, 204 U. S. 331 (1907) (States may not invoke original jurisdiction of Supreme Court to prosecute purely personal claims of their citizens), with, e.g., North Dakota v. Minnesota, 263 U. S. 365 (1923); Pennsylvania v. West Virginia, 262 U. S. 553 (1923); New York v. New Jersey, 256 U. S. 296 (1921); Georgia v. Tennessee Copper Co., 206 U. S. 230 (1907); Kansas v. Colorado, 206 U. S. 46 (1907) (original jurisdiction sustained for States protecting quasi-sovereign interests).
the Constitution, between suits brought by "Citizens" and those brought by "States" would evaporate.
MR. JUSTICE POWELL and MR; JUSTICE STEVENS took no part in the consideration or decision of these cases.
* Together with No. 69, Orig., Maine et al. v. New Hampshire, also on motion for leave to file bill of complaint.
has done is what Maine specifically permits and, indeed, invites it to do. If Maine should become disenchanted with its bestowed bounty, its legislature may change the Maine statute. The crux is the statute of Maine, not the statute of New Hampshire. The appellants, therefore, are really complaining about their own statute. It is ironic that the State of Maine, which allows the credit, has made an appearance in this case as an amicus urging, in effect, the denial of the credit by an adjudication of unconstitutionality of New Hampshire's statute. It seems to me that Maine should be here seeking to uphold its own legislatively devised plan or turn its attention to its own legislature."
Austin v. New Hampshire, 420 U. S. 656, 420 U. S. 668-669 (1975).
The Court, in its per curiam, ante at 426 U. S. 664, now concedes that the "injuries to the plaintiffs' fiscs were self-inflicted," and that no State "can be heard to complain about damages inflicted by its own hand." Quod approbo non reprobo.

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