Opinion ID: 2603848
Heading Depth: 1
Heading Rank: 2

Heading: Multiple Burden Test

Text: Appellants also argue that the energy tax is discriminatory because its sole and exclusive economic impact is upon an interstate transaction  the transmission of electricity for consumption in other states. They cite as authority, Mich.-Wis. Pipe Line Co. v. Calvert, 347 U.S. 157, 74 S.Ct. 396, 98 L.Ed. 583 (1954). In that case the United States Supreme Court invalidated a Texas tax on the occupation of gathering gas, measured by the volume of gas taken, because the incidence of the tax had been delayed beyond the step where production had ceased and transmission in interstate commerce had begun. The Court held that the incidence of the tax was on the exit of gas from the State, and found that the gathering of the gas into transmission lines was an integral part of interstate commerce. Id. at 167, 74 S.Ct. 396. Had Texas been allowed to impose such a tax, the door would have been opened for other states on the line to tax the volume of gas in the pipeline as it crossed their boundaries. The net effect would have been to resurrect the customs barriers which the Commerce Clause was designed to eliminate. Id. at 170, 74 S.Ct. at 403. Appellants contend that the Electrical Energy Tax Act carries the vice condemned in Michigan-Wisconsin further, stating that it is only interstate transmission and consumption of electricity that incurs any monetary liability by reason of the energy tax. We cannot agree with their analysis. There is a distinct difference between the generation of electricity and the transmission of electricity as it relates to interstate commerce. The United States Supreme Court has held that: [T]he process of generation is as essentially local as though electrical energy were a physical thing; and to that situation we must apply, as controlling, the general rule that commerce does not begin until manufacture is finished, and hence the commerce clause of the Constitution does not prevent the state from exercising exclusive control over the manufacture. Utah Power & L. Co. v. Pfost, 286 U.S. 165, 181, 52 S.Ct. 548, 552, 76 L.Ed. 1038 (1932). The energy tax is a tax on the generation of electricity and electricity can only be generated once. Since the electricity is generated in the State of New Mexico, only New Mexico can impose a tax on the generation. Only if the tax were imposed upon some later, nonlocal process would the Michigan-Wisconsin case be applicable. For the reasons stated, we affirm the trial court and hold the Electrical Energy Tax to be constitutional and valid. IT IS SO ORDERED. SOSA and EASLEY, JJ., concur.