Opinion ID: 1868607
Heading Depth: 1
Heading Rank: 8

Heading: Center for Auto Safety, Inc.

Text: The Fourth Circuit has also held that user fees charged for regulation should be distinguished from general revenue taxes for purposes of Commerce Clause analysis. Center for Auto Safety, Inc. v. Athey, 37 F.3d 139 (4th Cir.1994), cert. denied, ___ U.S. ___, 115 S.Ct. 1401, 131 L.Ed.2d 289 (1995). In Athey, the court upheld a Maryland statute regulating out-of-state charitable organizations' solicitation practices in Maryland. The statute imposed a sliding scale fee on a charity, whether in state or out, based on a charity's nationwide level of public contributions. At the outset, the court indicated that central to the Commerce Clause analysis in the case was whether the statute constituted a general revenue tax or a user fee assessed to defray the costs of state-provided services. Id. at 142. A general revenue tax, the court acknowledged, is a state tax levied against interstate commerce to raise general revenue and is subject to the stringent four-part test set out in Complete Auto Transit. On the other hand, the court reasoned that this stringent standard does not apply when the state tax at issue is a user fee. User fees are taxes or other fees collected by the state as reimbursement for use of state-owned or state-provided facilities or services such as those provided by the state in regulating particular commercial practices. The court believed the Supreme Court has drawn a clear distinction between user fees and general revenue taxes, noting that `[b]ecause [user fees] are purportedly assessed to reimburse the State for costs incurred in providing specific quantifiable services,' they `are not true revenue measures and ... the considerations applicable to ordinary tax measures do not apply.' Id. The court noted that the rationale for this distinction is that, where taxes are narrowly drawn to reimburse a state for its expenses, the possibility that the tax will discriminate against interstate commerce is sharply diminished. Id. Citing United States Supreme Court precedent, the court held that to qualify as a constitutional user fee, a state tax must (1) reflect a fair, if imperfect, approximation of the cost of using state facilities for the taxpayer's benefit, (2) not discriminate against interstate commerce, and (3) not be excessive in relation to the costs incurred by the taxing authorities. [5] The court concluded that, under these principles, the sliding scale fee imposed under the Maryland Statute is a constitutionally sound user fee. Id. at 143. Once again, although solicitation by charities is the activity regulated rather than installment sales, we find the regulatory scheme in Maryland to be similar to the regulatory scheme involved herein.