Opinion ID: 2188488
Heading Depth: 1
Heading Rank: 5

Heading: does south dakota's taxation scheme impermissibly burden interstate commerce?

Text: In deciding whether a state's tax scheme burdens interstate commerce the United States Supreme Court employs a four part test: Whether 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 Transit, Inc. v. Brady, 430 U.S. 274, 97 S.Ct. 1076, 51 L.Ed.2d 326 (1977). Brink argues this test has not been met because there is no nexus between South Dakota and the subject matter of these contracts other than the happenstance that the substations in question, and Ellsworth Air Force Base, are physically located within this State. We conclude otherwise; the test clearly shows that the tax does not burden interstate commerce. First, a substantial nexus existed, since the construction took place entirely within South Dakota. Second, the tax was fairly apportioned because no other state could tax the gross receipts of contracts performed entirely within this State. Third, the tax did not discriminate against interstate commerce. Brink's work dealt with building substations for the transmission of electricity, not the actual transmission of electricity, which took place after the construction was completed. Fourth, the tax was in proper proportion to the consequent enjoyment of the opportunities and protections which the state has afforded in connection with those activities. Commonwealth Edison Co. v. Montana, 453 U.S. 609, 626, 101 S.Ct. 2946, 2958, 69 L.Ed.2d 884, 900 (1981). The trial court found that Brink had introduced no evidence tending to show that excise or use taxation on the proceeds of Brink's real estate construction activities in South Dakota had any effect on the interstate transmission of electricity. We concur. Affirmed. MILLER, C.J., and SABERS, J., and MORGAN, Retired J., concur. WUEST, J., concurs specially. KONENKAMP, Circuit Judge, for HENDERSON, J., disqualified. AMUNDSON, J., not having been a member of the Court at the time this action was submitted did not participate.