Title: Regency Transp., Inc. v. Comm’r of Revenue
Citation: N/A
Docket Number: SJC-11873
State: Massachusetts
Issuer: Massachusetts Supreme Court
Date: January 6, 2016

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SJC-11873 
 
REGENCY TRANSPORTATION, INC.  vs.  COMMISSIONER OF REVENUE. 
 
 
 
Suffolk.     November 5, 2015. - January 6, 2016. 
 
Present:  Gants, C.J., Spina, Cordy, Botsford, Duffly, Lenk, & 
Hines, JJ. 
 
 
Taxation, Sales and use tax, Abatement.  Constitutional Law, 
Taxation, Commerce clause, Interstate commerce.  Interstate 
Commerce. 
 
 
 
 
Appeal from a decision of the Appellate Tax Board. 
 
 
The Supreme Judicial Court granted an application for 
direct appellate review. 
 
 
 
Matthew A. Morris (Richard L. Jones with him) for the 
taxpayer. 
 
Marikae G. Toye (Joseph J. Tierney with her) for the 
Commissioner of Revenue. 
 
Elizabeth J. Atkinson, of Virginia, & Andrew J. Fay & 
Patrick E. McDonough, for Massachusetts Motor Transportation 
Association & others, amici curiae, submitted a brief. 
 
 
 
CORDY, J.  Regency Transportation, Inc. (Regency), appeals 
from a decision of the Appellate Tax Board affirming in part the 
denial of an abatement of the motor vehicle use tax assessed 
2 
 
against it under G. L. c. 64I, § 2.  We granted Regency's 
application for direct appellate review to decide whether an 
unapportioned use tax imposed on Regency's interstate fleet of 
vehicles violates the commerce clause of the United States 
Constitution. For the reasons discussed herein, we conclude it 
does not.1 
 
1.  Background.  The essential facts are not disputed.  
Regency is a Massachusetts S corporation that operates a freight 
business with terminals in Massachusetts and New Jersey.  
Regency is licensed by the Interstate Commerce Commission as an 
interstate carrier to operate a fleet of tractors and trailers.  
The Regency fleet carries and delivers goods throughout the 
eastern United States. 
 
Throughout the tax periods at issue, Regency maintained its 
corporate headquarters in Massachusetts, as well as four 
warehouses and a combined maintenance facility and terminal 
location which it used for repairing and storing vehicles in its 
fleet.  Regency also operated five warehouses in New Jersey and 
two combined maintenance facility and terminal locations there.  
Regency performed thirty-five per cent of the maintenance and 
repair work on its fleet at its Massachusetts locations and 
thirty-five per cent of the work at its New Jersey locations, 
                                                          
 
 
1 We acknowledge the amicus brief filed by the Massachusetts 
Motor Transportation Association and other State transportation 
associations. 
3 
 
with the remainder being performed by third parties.  All 
vehicles in the Regency fleet entered into Massachusetts at some 
point during the tax periods at issue, and during these same 
periods Regency employed between sixty-three and eighty-three 
per cent of its workforce in the Commonwealth. 
 
Regency purchased the vehicles in its fleet from vendors in 
New Hampshire, New Jersey, Indiana, and Pennsylvania and 
accepted delivery and possession outside the Commonwealth.  The 
vehicles were registered in New Jersey and bore New Jersey 
registration plates.  Regency did not pay sales or use tax to 
any jurisdiction on its purchases of the vehicles because New 
Hampshire does not impose a sales tax and the remaining States 
provide an exemption for vehicles engaged in interstate 
commerce, known as a "rolling stock exemption."  The majority of 
States provides such an exemption from sales and use tax; 
Massachusetts does not, having abolished its rolling stock 
exemption in 1996. 
 
In August, 2010, the Commissioner of Revenue (commissioner) 
issued a notice of assessment to Regency pursuant to an audit of 
its sales and use tax liabilities for the monthly tax periods 
beginning October 1, 2002, and ending January 31, 2008.  The 
commissioner imposed a use tax on the full purchase price of 
each tractor and trailer in Regency's fleet, totaling 
$1,472,258.22, including $298,286.61 in interest and $391,323.95 
4 
 
in penalties for failure to file use tax returns and failure to 
pay use tax.  Regency requested full abatement of the 
assessment, which the commissioner denied in November, 2010.  
Regency timely appealed to the Appellate Tax Board (board) in 
January, 2011. 
 
In its appeal, Regency argued that the Commonwealth's 
imposition of a use tax on vehicles engaged in interstate 
commerce violated the commerce clause of the United States 
Constitution and the equal protection clauses of the United 
States and Massachusetts Constitutions.  Regency also argued 
that its reliance on a "letter ruling" issued by the Department 
of Revenue (department) under prior law constituted reasonable 
cause for the commissioner to abate the penalties assessed for 
failure to file returns and pay the tax. 
 
The board rejected Regency's arguments as to the commerce 
and equal protection clauses and concluded that Regency was 
liable for the Massachusetts use tax on the full sales price of 
its vehicles that were either stored or used in the 
Commonwealth.  It ruled that the tax was permissible under the 
commerce clause and administered in a manner consistent with the 
equal protection clauses of the United States and Massachusetts 
Constitutions.  The board noted that "while the fact that 
Massachusetts imposes a use tax on the use of interstate 
vehicles in the Commonwealth when many [S]tates do not may 
5 
 
increase costs for taxpayers who use vehicles here, this 
difference is not unconstitutional discrimination because 
Massachusetts allows a credit for any taxes paid to other 
jurisdictions." 
 
The board, however, abated the penalties imposed after 
finding that the commissioner's continued publication of 
incorrect guidance created uncertainty constituting reasonable 
cause for Regency's failure to file use tax returns and pay use 
tax.  Regency timely appealed the board's decision, and 
petitioned this court for direct appellate review, which we 
granted.  On appeal to this court, Regency challenges only the 
board's determination that the motor vehicle use tax does not 
violate the commerce clause. 
 
2.  General Laws c. 64I, § 2.  General Laws c. 64I, § 2, 
imposes a tax on the "storage, use or other consumption in the 
commonwealth of tangible personal property."  "The use tax was 
designed to prevent the loss of sales tax revenue from out-of-
State purchases."  M & T Charters, Inc. v. Commissioner of 
Revenue, 404 Mass. 137, 140 (1989).  The use tax and the sales 
tax "are complementary components of our tax system, created to 
reach all transactions, except those expressly exempted, in 
which tangible personal property is sold inside or outside the 
Commonwealth for storage, use, or other consumption within the 
Commonwealth" (quotation and citation omitted).  Town Fair Tire 
6 
 
Ctrs., Inc. v. Commissioner of Revenue, 454 Mass. 601, 605 
(2009).  They are mutually exclusive and the tax rate is 
identical.  See G. L. c. 64H, § 2; G. L. c. 64I, § 2. 
 
The statute creates a rebuttable presumption that property 
brought into the Commonwealth by the purchaser within six months 
of purchase was purchased for storage, use, or other consumption 
in Massachusetts.  G. L. c. 64I, § 8 (f).  See 830 Code Mass. 
Regs. § 64H.25.1(3)(c)(2) (1993).  The use tax imposed under 
c. 64I applies to transfers of title or possession of a motor 
vehicle where the vehicle transferred is thereafter stored, 
used, or otherwise consumed in Massachusetts.  830 Code Mass. 
Regs. § 64H.25.1(3)(a) (1993). 
 
A purchaser may be exempt from the use tax if it has paid a 
comparable use or sales tax in another jurisdiction, and, if the 
tax paid is less than the corresponding Massachusetts tax, the 
purchaser may offset its Massachusetts tax liability by any 
amount previously paid to the other jurisdiction.  G. L. c. 64I, 
§ 7 (c) (§ 7 [c] exemption).2  As amplified in the department's 
                                                          
 
 
2 General Laws c. 64I, § 7 (c), exempts from the use tax 
"[s]ales upon which the purchaser has paid a tax or made 
reimbursement therefor to a vendor or retailer under the laws of 
any [S]tate or territory of the United States, provided that 
such tax was legally due without any right to a refund or credit 
thereof and that such other [S]tate or territory allows a 
corresponding exemption with respect to the sale or use of 
tangible personal property or services upon which such a sales 
or use tax was paid to this [S]tate.  To the extent that the tax 
imposed by this chapter is at a higher rate than the rate of tax 
7 
 
regulations, a § 7 (c) exemption exists for the sale or transfer 
of a vehicle that is subsequently brought to or used in 
Massachusetts if (1) "the purchaser or the transferee [has paid] 
a sales or use tax on the vehicle to the [S]tate or territory in 
which the sale or transfer occurred"; (2) "the sales or use tax 
[has been paid] by the purchaser or the transferee and [was] 
legally due the State or territory"; (3) "the purchaser or the 
transferee [has not received and does not] have a right to 
receive a refund or credit of the sales or use tax from the 
[S]tate or territory in which the sale or transfer occurred"; 
and (4) "the [S]tate or territory to which the sales or use tax 
was paid [allows] a corresponding exemption with respect to 
motor vehicle sales and use taxes paid to Massachusetts."  830 
Code Mass. Regs. § 64H.25.1(7)(g) (1996).  The department 
regulations further provide that sales or transfers are exempt 
from the imposition of a sales or use tax if their taxation is 
impermissible under the Constitution or laws of the United 
States.  830 Code Mass. Regs. § 64H.25.1(7)(h) (1996). 
 
Regency does not dispute that it used and stored its 
tractors and trailers in Massachusetts during the tax periods at 
issue, nor does it dispute that it did not pay sales or use tax 
to any other State on the purchase of the vehicles.  The § 7 (c) 
                                                                                                                                                                                           
in the first taxing jurisdiction, this exemption shall be 
inapplicable and the tax imposed by this chapter shall apply to 
the extent of the difference in such rates." 
8 
 
exemption delineated in 830 Code Mass. Regs. § 64H.25.1(7)(g) 
therefore does not apply.  Consequently, we focus our inquiry on 
whether the use tax is otherwise impermissible under the United 
States Constitution, as Regency contends. 
 
3.  Commerce clause.  The Commonwealth's taxing powers are 
limited by the commerce clause's broad grant of authority to the 
Federal government to "regulate commerce with foreign nations 
and among the several [S]tates."  Art. 1, § 8, of the United 
States Constitution.   The United States Supreme Court has 
interpreted the clause to comprehend a negative, or dormant, 
command that prevents the States from unduly burdening 
interstate commerce, even where Congress has not otherwise 
acted.  See D.H. Holmes Co. v. McNamara, 486 U.S. 24, 29-30 
(1988).  "The dormant commerce clause seeks to prevent economic 
'Balkanization,' . . . and to protect an area of free trade 
among the several States" (quotations and citation omitted).  
DIRECTV, LLC v. Department of Revenue, 470 Mass. 647, 653, cert. 
denied, 136 S. Ct. 401 (2015).  The dormant commerce clause is 
implicated where, as here, a State imposes a tax that touches on 
interstate commerce.  Aloha Freightways, Inc. v. Commissioner of 
Revenue, 428 Mass. 418, 421 (1998). 
 
Our review of commerce clause challenges to State taxes 
focuses on "the practical effect of a challenged tax" (citation 
omitted).  Commonwealth Edison Co. v. Montana, 453 U.S. 609, 615 
9 
 
(1981).  Interstate commerce does not enjoy a "'free trade' 
immunity from State taxation," George S. Carrington Co. v. State 
Tax Comm'n, 375 Mass. 549, 551-552 (1978), but rather "may be 
made to pay its way" within the bounds of the commerce clause.  
Complete Auto Transit, Inc. v. Brady, 430 U.S. 274, 281 (1977) 
(Complete Auto).   A State tax will be sustained under the 
commerce clause if it meets the test articulated by the Supreme 
Court in Complete Auto, supra at 279, which requires that the 
tax "[1] is applied to an activity with a substantial nexus with 
the taxing State, [2] is fairly apportioned, [3] does not 
discriminate against interstate commerce, and [4] is fairly 
related to the services provided by the State" (Complete Auto 
test). 
 
4.  Discussion.  In reviewing the board's final decision, 
we affirm findings of fact by the board that are supported by 
substantial evidence.  M & T Charters, Inc., 404 Mass. at 140.  
"We review conclusions of law, including questions of statutory 
construction, de novo."  New England Forestry Found., Inc. v. 
Assessors of Hawley, 468 Mass. 138, 149 (2014), citing 
Bridgewater State Univ. Found. v. Assessors of Bridgewater, 463 
Mass. 154, 156 (2012). 
 
Because the parties agree that Regency's activities in 
Massachusetts constitute a "substantial nexus" with the 
10 
 
Commonwealth, we begin our analysis with the second prong of the 
Complete Auto test. 
 
a. Fair apportionment.  The fair apportionment requirement 
of the Complete Auto test ensures "that each State taxes only 
its fair share of an interstate transaction."  Goldberg v. 
Sweet, 488 U.S. 259, 260-261 (1989).  "Apportionment also seeks 
to avoid multiple taxation by different States."  Aloha 
Freightways, Inc., 428 Mass. at 421. 
 
There is no set formula for determining whether a tax is 
fairly apportioned; rather, we examine whether the tax is both 
internally and externally consistent.  Aloha Freightways, Inc., 
428 Mass. at 422, quoting Goldberg, 488 U.S. at 261. 
 
i.  Internal consistency.3  A tax is internally consistent 
if it is "structured so that if every State were to impose an 
                                                          
 
 
3 The parties disagree about whether we may reach the issue 
of internal consistency on appeal.  In the proceedings below, 
Regency Transportation, Inc. (Regency), acknowledged that the 
tax is internally consistent.  On appeal, however, it takes the 
opposite position, and further argues that it may challenge the 
statute as internally inconsistent in spite of its concession 
below because "the issue of law presented on appeal is whether 
the use tax is fairly apportioned [and] not the precise means 
. . . by which this Court could conclude that the use tax is not 
fairly apportioned," i.e., whether it meets both prongs of the 
fair apportionment test.  The Commissioner of Revenue 
(commissioner) is of the view that Regency's concession 
effectively waived the argument, barring its revival on appeal.  
See G. L. c. 58A, § 13 ("The court shall not consider any issue 
of law which does not appear to have been raised in the 
proceedings before the [Appellate Tax Board (board)]"); Minchin 
v. Commissioner of Revenue, 393 Mass. 1004, 1005 (1984) ("[t]o 
raise a constitutional question on appeal to this court from the 
11 
 
identical tax, no multiple taxation would result."  Aloha 
Freightways, Inc., supra, quoting Goldberg, supra. 
 
In Regency's view, the § 7 (c) exemption is rendered 
unconstitutional by the language in 830 Code Mass. Regs. 
§ 64H.25.1(7)(g)(1)(a), which exempts from liability a taxpayer 
who has paid taxes "to the [S]tate or territory in which the 
sale or transfer occurred."  Regency believes that this language 
limits the exemption such that it is not available where a sales 
or use tax was paid to a State where sale or transfer did not 
occur, potentially subjecting purchasers to multiple taxation.  
To illustrate this possibility, Regency proposes a hypothetical 
situation whereby an interstate carrier purchases a tractor in 
New Hampshire (which has no sales tax) and drives the tractor to 
New Jersey, where it is registered.  The carrier pays no sales 
or use tax in New Jersey because the State provides a rolling 
stock exemption.  The carrier then drives the tractor to 
                                                                                                                                                                                           
board, the taxpayer must present the question to the board and, 
in so doing, make a proper record for appeal.  Otherwise, the 
taxpayer waives the right to press the constitutional argument."  
We have not had occasion to decide whether an appellant may 
raise an argument in support of its constitutional claim on 
appeal where it raised the claim below but then conceded the 
argument.  For the purposes of this appeal, we assume without 
deciding that Regency waived its internal consistency argument 
by conceding the matter below.  We nevertheless reach the issue 
because the matter has been fully briefed on the merits, there 
is a public interest in promptly resolving the issue, and the 
answer to be given is reasonably clear and dependent on issues 
of general application and not on factual determinations 
specific to the case at hand.  See Brown v. Guerrier, 390 Mass. 
631, 632-633 (1983). 
12 
 
Vermont, which provides no rolling stock exemption, and is 
assessed the Vermont use tax.  The carrier then drives the truck 
to Massachusetts, where it is assessed the Massachusetts use 
tax.  According to Regency, Massachusetts will not credit the 
Vermont use tax paid because the tax was not paid "to the State 
or territory in which the sale or transfer occurred" per the 
language of § 64H.25.1(7)(g).  The result, Regency asserts, is 
that the carrier is assessed the use tax twice because the 
language precludes its eligibility for the exemption and renders 
the scheme internally inconsistent. 
 
We do not agree with Regency's interpretive legerdemain, 
which ignores the "catch-all" exemption provided by 830 Code 
Mass. Regs. § 64H.25.1(7)(h), which exempts a taxpayer from 
Massachusetts' use tax liability, beyond the exemptions set 
forth in § 64H.25.1(7)(g): 
"if the use of the vehicle in Massachusetts as part of 
interstate commerce is exempt from use tax under the 
Constitution or laws of the United States.  For the 
purposes of this subsection, the use of such a vehicle in 
Massachusetts as part of interstate commerce is exempt from 
Massachusetts use tax under the Constitution or laws of the 
United States only if application of the use tax violates 
the test applied by the United States Supreme Court 
in [Complete Auto]." 
 
 
The commissioner responds to this hypothetical by 
explaining that, because the hypothetical imposition of the use 
tax would violate the Complete Auto test due to its potential 
for multiple taxation, it is, by its terms, otherwise exempted 
13 
 
under § 64H.25.1(7)(h).  Consequently, Massachusetts would 
either not impose a use tax, or if the Vermont tax rate was 
lower than the Massachusetts tax rate, Massachusetts would 
credit the amount of the tax paid to Vermont.  We agree with the 
commissioner's reading of the regulations.  See Biogen IDEC MA, 
Inc. v. Treasurer & Receiver Gen., 454 Mass. 174, 187 (2009) 
("We accord substantial deference to the agency's regulations 
and apply all rational presumptions in favor of the validity of 
the administrative action and [do] not declare it void unless 
its provisions cannot by any reasonable construction be 
interpreted in harmony with the legislative mandate").  Because 
any potential for multiple taxation under § 64H.25.1(7)(g) is 
averted by the language of § 64H.25.1(7)(h), with respect to use 
taxes paid to another jurisdiction, we conclude that the use tax 
is internally consistent.  See, e.g., M & T Charters, Inc., 404 
Mass. at 143.  This conclusion is dependent upon the 
commissioner's interpretation of the department's regulations as 
presented to the court. 
 
ii.  External consistency.  We turn next to the question of 
whether the use tax is externally consistent.  This inquiry is 
satisfied where "the State has taxed only that portion of the 
revenues from the interstate activity which reasonably reflects 
the in-state component of the activity being taxed."  Aloha 
Freightways, Inc., 428 Mass. at 422, quoting Goldberg, 488 U.S. 
14 
 
at 262.  To make this determination, we examine the "in-state 
business activity which triggers the taxable event and the 
practical or economic effect of the tax on that interstate 
activity."  Goldberg, supra.  Here, the in-State activity at 
issue is the "storage, use or other consumption in the 
commonwealth of tangible personal property."  G. L. c. 64I, § 2.  
There are ample facts to support the board's finding that 
Regency's tax liability reasonably reflects the in-State 
activity being taxed.  Regency has used all of the tractors and 
trailers in its fleet in Massachusetts, and stores and maintains 
its fleet, at least in part, in the Commonwealth. 
 
Nevertheless, Regency contends that the tax is externally 
inconsistent because the tax base on the property engaged in 
interstate commerce (tractors and trailers) is not apportioned 
reasonably to reflect the in-State activity being taxed, which 
it says is its use of Commonwealth's roads.4  We disagree with 
this characterization, as G. L. c. 64I, § 2, is not so limited 
                                                          
 
 
4 For this proposition, Regency cites a decision from the 
Alabama Court of Appeals, Boyd Brothers Transp., Inc. v. State 
Dep't of Revenue, 976 So. 2d 471, 482 (Ala. App. 2007), which 
struck down an unapportioned use tax on the value of trucks used 
in interstate commerce as violating the commerce clause.  We are 
not bound by this decision, but note that the court failed to 
consider the issue of credit provisions in lieu of 
apportionment, and deviated from a decision of its own supreme 
court, which upheld a use tax where a credit was available to 
prevent multiple taxation.  See Ex parte Fleming Foods of Ala., 
Inc., 648 So. 2d 577, 579-580 (Ala. 1994).  Accordingly, Boyd 
Brothers Transp., Inc., is irrelevant to our analysis. 
15 
 
in its scope and application.  The statute, by its terms, 
applies to use, storage, or consumption, and Regency's 
activities in the Commonwealth are not limited only to its use 
of the Commonwealth's roads. 
 
Moreover, the Supreme Court has, in considering a challenge 
to a sales tax, rejected the argument that a tax must be 
apportioned to satisfy the external consistency requirement, 
stating that it has "consistently approved taxation of sales 
without any division of the tax base among different States, and 
[has] instead held such taxes properly measurable by the gross 
charge for the purchase, regardless of any activity outside the 
taxing jurisdiction that might have preceded the sale or might 
occur in the future."  Oklahoma Tax Comm'n v. Jefferson Lines, 
Inc., 514 U.S. 175, 186 (1995) (Jefferson Lines, Inc.).  The 
taxpayer in that case argued that Oklahoma should be limited to 
imposing sales tax only on an apportioned value of a bus ticket 
that represented the miles of the journey traversed in Oklahoma.  
Id. at 191-192. 
 
The court rejected the argument that the tax must be 
apportioned based on mileage simply because it was possible to 
do so where the taxpayer had otherwise failed to demonstrate 
that the unapportioned tax was grossly out of proportion to 
taxed activity transacted in Oklahoma.  Id. at 195-196.  The 
Court explained that there was "no reason to leave the line of 
16 
 
longstanding precedent and lose the simplicity of our general 
rule sustaining sales taxes measured by full value."  Id. at 
196.  It concluded that the Oklahoma tax was therefore 
externally consistent, "reaching only the activity taking place 
within the taxing State, that is, the sale of the service."  Id. 
 
Similarly, the motor vehicle use tax need not be 
apportioned, so long as we can discern the "economic 
justification for the State's claim" and determine that the use 
tax does not "reach[] beyond that portion of value that is 
fairly attributable to economic activity within the taxing 
State."  Id. at 185.  The use tax is intended to "to prevent the 
loss of sales tax revenue from out-of-State purchases." 
Commissioner of Revenue v. J.C. Penney Co., 431 Mass. 684, 687 
(2000), quoting M & T Charters, Inc., 404 Mass. at 140.  Given 
this intent, the tax is properly measurable by the sale value of 
a vehicle that is subsequently brought to the Commonwealth for 
storage, use, or other consumption.  Here, the use tax imposed 
on Regency is reasonably related to the in-State activity being 
taxed, which includes a great deal more than the mere use of its 
roads, and Regency is not subject to the imposition of multiple 
use or sales taxes in other jurisdictions.  Accordingly, the tax 
is externally consistent.  Because both internal and external 
consistency requirements are met, we hold that the use tax is 
17 
 
fairly apportioned in keeping with the requirements of the 
commerce clause. 
 
b.  Discrimination against interstate commerce.  The third 
prong of the Complete Auto test examines whether a tax 
discriminates against interstate commerce.  Although the use tax 
is imposed at the same rate as the sales tax and is levied on 
residents and nonresidents alike, see G. L. c. 64I, § 2, Regency 
argues that the use tax is nevertheless discriminatory because 
the tax, when divided by the miles actually driven by Regency 
vehicles in Massachusetts, is significantly greater for Regency 
than for intrastate companies.  As a result, Regency says, the 
Massachusetts use tax places it at a competitive disadvantage as 
compared to companies doing business in States that impose no 
sales tax or provide rolling stock exemptions, and this 
disadvantage must be ascribed to the discriminatory nature of 
the use tax.  See Comptroller of Treasury of Md. v. Wynne, 135 
S. Ct. 1787, 1802 (2015).  We disagree. 
 
As an initial matter, Regency fails to articulate why we 
should assess the impact of the use tax based on the miles 
traveled by the Regency fleet within the Commonwealth.  As noted 
earlier, the use tax is imposed in connection with Regency's use 
and storage of the fleet within the Commonwealth, and not solely 
based on its use of roads within the Commonwealth. 
18 
 
 
For this reason, Regency's reliance on the holdings in 
American Trucking Ass'ns, Inc. v. Scheiner, 483 U.S. 266 (1987), 
and American Trucking Ass'ns, Inc. v. Secretary of Admin., 415 
Mass. 337 (1993), is misplaced.  In both cases, the courts found 
that flat, unapportioned user fees imposed on trucking companies 
for the use of State roads placed an impermissible burden on 
interstate trucking companies that were potentially required to 
pay similar fees in multiple jurisdictions, whereas their purely 
intrastate competitors would have only one fee to pay.  See 
American Trucking Ass'ns, Inc., 483 U.S. at 284-285; American 
Trucking Ass'ns, Inc., 415 Mass. at 345.  Regency believes that 
the use tax similarly discriminates against interstate commerce 
because, when broken down by cost per mile, the result is that 
Regency bears a heavier burden than other interstate carriers 
not subject to the Massachusetts use tax and intrastate carriers 
traveling only in Massachusetts, rendering the tax 
unconstitutional. 
 
This argument misconstrues the courts' decisions in the 
American Trucking Ass'ns cases.  First, the fees in both cases 
were flat fees imposed solely for the use of the roads.  See 
American Trucking Ass'ns, Inc., 483 U.S. at 273, 283-284; 
American Trucking Ass'ns, Inc., 415 Mass. at 339-340.  As we 
have emphasized throughout this decision, the use tax is not a 
tax on the use of the Commonwealth's roads, but rather on the 
19 
 
privilege of using and storing the tractors and trailers in the 
State.  Thus, "miles traveled within the State simply are not a 
relevant proxy for the benefit conferred upon the parties['] 
[use and storage]" of the fleet within Massachusetts.  Jefferson 
Lines, Inc., 514 U.S. at 199.   
 
Second, in the American Trucking Ass'ns cases, the courts 
found that the flat fee was internally inconsistent in violation 
of the commerce clause because taxpayers were potentially 
subject to the same tax in multiple jurisdictions, which 
resulted in the additional cost per mile for interstate 
carriers.  See American Trucking Ass'ns, Inc., 483 U.S. at 284-
285; American Trucking Ass'ns, Inc., 415 Mass. at 345-346.  As 
discussed supra, the use tax is internally consistent because of 
the exemptions provided in G. L. c. 64I, § 7 (c), and 830 Code 
Mass. Regs. § 64H.25.1(7)(g) and (h).  For these reasons, 
Regency's reliance on these cases is inapposite. 
 
We also reject Regency's position that because 
Massachusetts chooses to tax an activity that other States do 
not, the tax is discriminatory.  Regency urges us to consider 
"not the formal language of the tax statute but rather its 
practical effect."  Comptroller of Treasury of Md., 135 S. Ct. 
at 1795, quoting Complete Auto, 430 U.S. at 279.  In doing so, 
we agree with the board, and not Regency, that "[d]iscrimination 
results when a [S]tate subjects taxpayers doing business outside 
20 
 
of the [S]tate to disparate tax treatment from those based 
inside the [S]tate, not when a [S]tate subjects all taxpayers to 
tax on a transaction that another [S]tate may exempt."  "The 
adverse economic impact in dollars and cents upon a participant 
in interstate commerce for crossing a [S]tate boundary and thus 
becoming subject to another State's taxing jurisdiction is 
neither necessary to establish a commerce clause violation . . . 
nor [is it] sufficient" (citations omitted).  American Trucking 
Assn's, Inc., 483 U.S. at 283, n.15.5  Regency "seeks to use the 
commerce clause of the United States Constitution not as 
protection against multiple or discriminatory taxation, but as 
an escape from any taxation at all.  This the Constitution does 
not permit."  M & T Charters, Inc., 404 Mass. at 143-44. 
 
c.  Relation to State services.  The final prong of the 
Complete Auto test requires that the use tax be "fairly related" 
to the services provided by the State.  Regency again invokes 
its argument that because the use tax is not apportioned based 
on miles traveled in the Commonwealth, the measure of the use 
                                                          
 
 
5 Nor do we agree with Regency's assertion that the statute 
and regulations give the commissioner unfettered authority to 
assess the use tax on all interstate tractors and trailers 
brought into the Commonwealth.  Such a result is contrary to the 
plain language of G. L. c. 64I, § 7, and 830 Code Mass. Regs. 
§ 64H.25.1(7)(c), (g), and (h).  Not only may a party rebut the 
presumption that it is bringing a vehicle into the Commonwealth 
for storage, use, or other consumption, it is also exempted from 
the use tax where it has already paid a sales or use tax to 
another State and otherwise meets the statutory requirements for 
the exemption. 
21 
 
tax imposed cannot bear a reasonable relation to the services 
provided to it by the State.  This argument fails, however, 
because the commerce clause does not require such an exacting 
measurement.  The fair relation prong 
"requires no detailed accounting of the services provided 
to the taxpayer on account of the activity being taxed, 
nor, indeed, is a State limited to offsetting the public 
costs created by the taxed activity . . . [rather] Complete 
Auto's fourth criterion asks only that the measure of the 
tax be reasonably related to the taxpayer's presence or 
activities in the State." 
 
Jefferson Lines, Inc., 514 U.S. at 199-200. 
 
Thus, the tax need not relate directly to the interstate 
activity at issue, that is, driving the trucks; rather, the 
strictures of the commerce clause are satisfied where the 
taxpayer receives "police and fire protection, the use of public 
roads and mass transit, and the other advantages of civilized 
society."  Goldberg, 488 U.S. at 267, citing D.H. Holmes Co., 
486 U.S. at 32.  See Towle v. Commissioner of Revenue, 397 Mass. 
599, 606 (1986); George S. Carrington Co., 375 Mass. at 553-554 
(1978).  Regency is incorporated and headquartered in 
Massachusetts.  The majority of its workforce is employed here.  
It also uses, stores, and maintains its vehicles in the 
Commonwealth.  Given the nature and extent of Regency's 
activities in the Commonwealth, and the benefits it receives 
consonant with its presence here, we conclude the tax is fairly 
related to Regency's activities in the Commonwealth. 
22 
 
 
Conclusion.  Based on the foregoing analysis, we conclude 
that the motor vehicle use tax, G. L. c. 64I, § 2, meets the 
requirements of the Complete Auto test and therefore does not 
violate the commerce clause.  On account of Regency's use and 
storage of its trucking fleet in the Commonwealth, the 
Commonwealth may require Regency to "pay its way," and the 
Commonwealth's method of doing so is well within the bounds of 
the commerce clause.  Accordingly, we affirm the decision of the 
board. 
 
 
 
 
 
 
 
So ordered.