Opinion ID: 2113449
Heading Depth: 1
Heading Rank: 3

Heading: The Commerce Clause Analysis

Text: Ford contends that the Wholesalers' Tax, as applied to the proceeds of its sales where title to the product passes outside Delaware before being physically delivered to dealers in Delaware, violates Article I, § 8 of the United States Constitution (the Commerce Clause). [9] Specifically, Ford argues the tax violates the negative or dormant aspect of the Commerce Clause that denies the States the power to exact more than their fair share from interstate commerce than would be commensurate with the burden imposed by that activity. [10] In Complete Auto Transit, Inc. v. Brady, [11] the United States Supreme Court laid out a pragmatic approach for applying the dormant Commerce Clause to a state's taxation of interstate commerce. A state tax can be sustained against a Commerce Clause challenge where it: (i) is applied to an activity with a substantial nexus with the taxing State, (ii) is fairly apportioned, (iii) does not discriminate against interstate commerce, and (iv) is fairly related to the services provided by the State. [12] The test is designed to ensure that those engaged in interstate commerce pay their fair share of the state tax burden. [13] On appeal, Ford does not contest the Superior Court's determination that the first and fourth requirements of the test are satisfied. At issue is whether the Wholesalers' Tax is fairly apportioned and whether it discriminates against interstate commerce.