Opinion ID: 2630311
Heading Depth: 4
Heading Rank: 1

Heading: The discriminatory measure must be rationally related to a valid purpose.

Text: The Supreme Court has held that states should be granted considerable leeway in enacting taxes. [31] However, when a tax implicates a federal right, and in the case of discrimination against nonresidents, implicates federalism itself, courts will hold the taxing scheme to a higher standard. As Justice Marshall wrote for the majority in Austin v. New Hampshire: [32] In resolving constitutional challenges to state tax measures this Court has made it clear that in taxation, even more than in other fields, legislatures possess the greatest freedom in classification. Our review of tax classifications has generally been concomitantly narrow, therefore, to fit the broad discretion vested in the state legislatures. When a tax measure is challenged as an undue burden on an activity granted special constitutional recognition, however, the appropriate degree of inquiry is that necessary to protect the competing constitutional value from erosion. .... The Privileges and Immunities Clause, by making noncitizenship or nonresidence an improper basis for locating a special burden, implicates not only the individual's right to nondiscriminatory treatment but also, perhaps more so, the structural balance essential to the concept of federalism. Since nonresidents are not represented in the taxing State's legislative halls ... judicial acquiescence in taxation schemes that burden them particularly would remit them to such redress as they could secure through their own State; but to prevent (retaliation) was one of the chief ends sought to be accomplished by the adoption of the Constitution. Our prior cases, therefore, reflect an appropriately heightened concern for the integrity of the Privileges and Immunities Clause by erecting a standard of review substantially more rigorous than that applied to state tax distinctions among, say, forms of business organizations or different trades and professions.[ [33] ] As we have stated previously in Carlson I and Carlson II, the state may charge nonresidents more than residents in order to equalize the burden of fisheries management between them. [34] However, the state must also demonstrate that the discriminatory fee system bears a substantial relationship to its goal. [35] The state should meet this burden by calculating the resident contribution to fisheries management and comparing it with the challenged differentials charged to nonresidents. [36] We indicated that these two quantities must be equivalent in order for the fee differential to be constitutional. [37] That is, if the fee differential substantially exceeds the resident contribution, the state will have failed to demonstrate that the fees have a substantial enough relationship to the goal of equalizing economic burdens to comply with the Privileges and Immunities Clause. [38] Thus something less than strict equality is allowable; the nonresident fees will comply with the clause if they are not substantially in excess of the allowable differential. That is, the discriminatory measure must bear a reasonable relationship to a valid state objective. [39] It is enough if the state achieves a a reasonably[] fair distribution of burdens, [40] since absolute equality is impracticable in taxation. [41] In examining the challenged statutory scheme, we may consider the availability of less restrictive means to achieve the state's valid objective.