Document: 128 S. Ct. 1801 (2008) DEPARTMENT OF REVENUE KENTUCKY, et al., Petitioners, v. George W. DAVIS ux. No. 06-666. Supreme Court of United States. Argued November 5, 2007. Decided May 19, 2008. *1804 C. Christopher Trower, Atlanta, GA, for petitioners. G. Eric Brunstad, Jr., Hartford, CT, respondents. Douglas M. Dowell, Donald Guier, Frankfort, KY, Counsel Record, Gwen R. Pinson, Office General Counsel, Petitioners. Charles Watkins, John Wylie, Futterman Howard Wylie & Ashley Chtd., Chicago, Illinois, David J. Guin, Tammy McClendon Stokes, Donaldson LLC, Birmingham, Alabama, Rheba Rutkowski, Bingham McCutchen LLP, Connecticut, Stephen Dampier, Law Offices P.C., Fairhope, Irvin D. Foley, Anthony Raluy, Foley Bryant Holloway, Louisville, Kentucky, Scott Barrett, Dennis T. Trainor, Barrett Associates, Bloomington, Indiana, Zimmerman, Hart L. Robinovitch, Zimmerman Reed P.L.L.P., Minneapolis, Minnesota, Seth N. Stratton, Hurld, Sukti Dhital, Alison E. Hickey, Michael Moran, Jeff Goldman, Amy Lawler, Nicholas Salazar, Donn H. Wray, Stewart Irwin, Indianapolis, Arthur Susman, Matthew Hurst, Heffner, Susman Heffner Respondents. Justice SOUTER delivered the opinion Court, except as to Part III-B.[*] For better part two centuries States and their political subdivisions have issued bonds public purposes, nearly half that time some exempted interest on own from state income taxes, which are imposed bond other The question here is whether Kentucky's version this differential tax scheme offends Commerce Clause. We hold it does not. I A Like most States, Commonwealth Kentucky taxes its residents' income. See Ky.Rev.Stat. Ann. § 141.020(1) (West 2006). assessed "net income," see ibid., calculated by reference "gross income" defined Internal Revenue Code, §§ 141.010(9)-(11) Supp.2007),[1]*1805 excludes "interest any State or local bond" ("municipal bond," short[2]), 26 U.S.C. 103(a). piggybacks exclusion, but only up a point: adds derived obligations sister states thereof" back into taxable net. 141.010(10)(c). Interest thus entirely exempt,[3] whereas municipal taxable. (Interest private entities taxed regardless issuer's home.) ostensible reason regime attractiveness tax-exempt at "lower rates ... than paid comparable risk." Graetz Schenk, Federal Income Taxation 215 (5th ed.2005) (hereinafter Schenk). Under example, 103, "if market rate 10 percent corporate bond, municipality could pay 6.5 debt purchaser in 35 marginal bracket would be indifferent between since after-tax percent," Schenk 215.[4] works same way; Commonwealth's benefit residents who buy makes lower acceptable,[5] while limiting *1806 exception raises in-state demand them without also subsidizing issuers. significance immense. Between 1996 2002, $7.7 billion long-term spending transportation, safety, education, utilities, environmental protection, among things. IRS, Statistics Bulletin, Belmonte, Tax-Exempt Bonds, 1996-2002, pp. 169-170, http://www.irs.gov/pub/irs-soi/02gov bnd. pdf (as visited Jan. 23, 2008, available Clerk Court's case file). Across Nation during period, over $750 bonds, with third money going followed transportation (13%) utilities (11%). ibid. Municipal currently finance roughly two-thirds capital expenditures governments. Thomas, Money, Banking Financial Markets 55 (2006). Funding work government way follows tradition far 17th century. Johnson Rubin, Bond Market: Structure Changes, Handbook Public Finance 483, 485 (F. Thompson Green eds.1998) ("[In] 1690 Massachusetts bills credit soldiers had participated an unsuccessful raid City Quebec"). first appeared early 19th century: "New York began float [debt] securities about 1812," A. Hillhouse, Bonds: Century Experience 31 (1936) Hillhouse), 1822 Boston "had bonded $100,000," id., 32. swelled mid-1840s, when aggregate American cities exceeded $27 million, total was times amount. Bonds funded great day, including New City's water system, 31, Erie Canal, Amdursky Gillette, Debt 1.2.1, p. 15 (1992) Gillette). At turn 20th century, closing $2 billion, Hillhouse 35, millennium, "$1.5 trillion were outstanding," Temel, Fundamentals ix ed.2001). Differential schemes like long pedigree, too. taxation became widespread Comstock, Personal Incomes 11 (1921) (reprinted 2005) Comstock), along new regimes came exemptions deductions, 171-184, induce all sorts economic behavior, lending governments favorable untaxed interest. enacted these statutes 1919, 1919 N.Y. Laws 1641-1642, year tax, Comstock 104,[6] followed, see, e.g., 1921 N.C. Sess. 208; 1923 N.H. 78; 1926 Va. Acts ch. 576, 960-961, joining pack 1936, 1936 Ky. 71. Today, 41 *1807 laws one before us.[7] B Petitioners (for brevity, Commonwealth) collect tax. Respondents Catherine Davis out-of-state then sued collectors court refund claim impermissibly discriminates against interstate commerce violation Clause National Constitution. trial granted judgment Commonwealth, relying our cases recognizing "market-participant" dormant limit regulation. App. Pet. Cert. A18-A19 (citing Reeves, Inc. Stake, 447 U.S. 429, 100 2271, 65 Ed. 2d 244 (1980), Hughes Alexandria Scrap Corp., 426 794, 96 2488, 49 220 (1976)). Appeals reversed. 197 S.W.3d 557 In brief discussion, rejected reasoning Ohio upholding similar challenged under Clause, 563 (discussing Shaper Tracy, 97 3d 760, 647 N.E.2d 550 (1994)), distinguished participant cases, S.W.3d, 564, well decision century relied on, 563-564 Bonaparte Tax 104 592, 845 (1882)). thought "no choice find system taxing extraterritorial runs afoul Clause," *1808 denied motion discretionary review, A14. certiorari owing conflict raised important constitutional law, because result reached casts doubt adopted majority ___, 127 2451, 167 1129 (2007). now reverse. II empowers Congress "[t]o regulate several States," Art. I, 8, cl. 3, although terms do not expressly restrain "the States" way, we sensed negative implication provision days, Cooley Board Wardens Port Philadelphia ex rel. Soc. Relief Distressed Pilots, 12 How. 299, 318-319, 13 996 (1852); cf. Gibbons Ogden, 9 Wheat. 1, 209, 6 23 (1824) (Marshall, C.J.) (dictum). modern law what has come called driven concern "economic protectionismthat is, regulatory measures designed interests burdening competitors." Energy Co. Ind. Limbach, 486 269, 273-274, 108 1803, 302 (1988). point "effectuat[e] Framers' purpose `prevent retreating [the] isolation,'" Fulton Corp. Faulkner, 516 325, 330, 116 848, 133 796 (1996) (quoting Oklahoma Comm'n Jefferson Lines, Inc., 514 175, 180, 115 1331, 131 261 (1995); brackets omitted), "that plagued relations Colonies later Articles Confederation," Oklahoma, 441 322, 325-326, 99 1727, 60 250 (1979). respect cross well, distrust Balkanization limited federalism favoring degree autonomy. Compare Federalist Nos. 7 (A. Hamilton), 42 (J. Madison), 51 Madison); Garcia San Antonio Metropolitan Transit Authority, 469 528, 546, 105 1005, 83 1016 (1985) ("The essence federal within realm authority left open Constitution, must equally free engage activity citizens choose common weal"). resulting protocol analysis, ask commerce. Oregon Waste Systems, Department Environmental Quality Ore., 511 93, 99, 114 1345, (1994). discriminatory "virtually per se invalid," ibid.; Jersey, 437 617, 624, 98 2531, 57 475 (1978), will survive if "advances legitimate cannot adequately served reasonable nondiscriminatory alternatives," supra, 101, 1345 (internal quotation marks omitted); Maine Taylor, 477 131, 138, 106 2440, 91 110 (1986). Absent discrimination forbidden purpose, however, "will upheld unless burden [interstate] clearly excessive relation putative benefits." Pike Bruce Church, 397 137, 142, 90 844, 25 174 (1970). frequently scrutiny, Haulers Assn., Oneida-Herkimer Solid Management ___ _ *1809 S.Ct. 1786, 1797-98, 655 (2007) (plurality opinion); Northwest Central Pipeline Corporation Kan., 489 493, 525-526, 109 1262, 103 509 (1989); Minnesota Clover Leaf Creamery Co., 449 456, 472-474, 101 715, 66 659 (1981), though always, itself, U.S., 146, 844. Some run different course, covers go beyond regulation themselves "participat[e] market" so "exercis[e] right favor [their] others." Scrap, 810, 2488. This reflects "basic distinction... participants regulators," 436, "[t]here [being] no indication plan ability operate freely market," 437, 2271. White Council Constr. Employers, 460 204, 208, 1042, 75 1 (1983) ("[W]hen enters subject restraints Clause"). Thus, found authorizing payments processors automobile hulks validly burdened more onerous documentation requirements counterparts. Likewise, Reeves accepted South Dakota's policy giving customers dibs cement produced state-owned plant, held executive order requiring workers city-financed construction projects city passed muster. Our recent look reach just last Term, decided independently participation precedents. Haulers, "flow control" ordinance trash haulers deliver solid waste processing plant owned operated State. "[c]ompelling reasons" "treating [the ordinance] differently particular businesses Id., S.Ct., 1795. provide goods services own, unlike businesses, "vested responsibility protecting health, welfare citizens," such may "be directed toward number goals unrelated protectionism," 1796. That true where addressed disposal, "both typically traditionally function." 1796 F.3d 245, 264 (C.A.2 2001) (Calabresi, J., concurring); internal omitted). And been needed show York's object consequently protectionism, pointed out palpable harm ordinancesmore expensive removal [was] likely fall upon very people voted laws," rather interests. 1797. Being concerned "contrary approach lead unprecedented unbounded interference courts government," 1796, did "not discriminate purposes *1810 1795.[8] III It fortiori prevail. explained function susceptible standard scrutiny motivation objectives distinct simple protectionism abhors. ("Laws protectionism"); (noting "[w]e should particularly hesitant interfere guise Clause" engages traditional function).[9] logic applies even greater force State's given issuance quintessentially function, venerable history already sketched, 1806. By issuing "sprea[d] costs time," Gillette 1.1.3, 11, much might house loan monthly payments. place cost project years, they allow current revenues support, *1811 1.2, 12-13. proceeds shoulder cardinal civic responsibilities listed Haulers: health,[10] safety,[11] welfare[12] citizens. saying apprehension "unprecedented interference" warranted here, Davises us invalidate century-old practice, 1806, presently employed n. 7, 1807 affirmatively supported them, Brief Amici Curiae. fact, emphasis character enterprise preference step addressing fundamental element jurisprudence, principle "any notion assumes comparison substantially entities." 1795 omitted) Motors 519 278, 298, 117 811, 136 761 (1997)). (1882), involving Full Faith Credit foreign properly treated entity state-issued traveled outside borders. 595 (beyond borders, debtor "is compelled borrower, disabilities individuals," none "of attributes sovereignty owes"). Viewed through lens, parallels "benefit[s] [issuer, Kentucky], treating [issuers] exactly same." There entity, treat itself being "substantially similar" issuers market.[13] provides firm basis reversal. Just ordinances there, exemption favors treatment type `discriminate commerce' Clause." case, seen broader rubric doctrine, say inapposite here. view, characterize action ignore fact absent central here: *1812 taxation, difference amounts heavier forbidden, Camps Newfound/Owatonna, Town Harrison, 520 1590, 137 852 (1997) (invalidating statute exempting charities real estate personal property conducted principally residents); (striking down stock residents, inversely proportional corporation's exposure tax); Bacchus Imports, Ltd. Dias, 468 263, 3049, 82 200 (1984) (holding excise sale liquor wholesale unconstitutional locally alcoholic beverages). make fair extent argue acts roles once, setting looked seems invite activity, Walling Michigan, 446, 455, 454, 29 691 (1886) ("A discriminating operating disadvantage products introduced mentioned State, effect, restraint usurpation power conferred Constitution Congress"); Newfound, 578, 1590 ("[I]t clear burdens violate Clause"); 287, 811 prohibits unduly commerce"). But there ignoring imposing sense issuer. entered securities, Maryland hulks, 806, Dakota market, 440, simply blinks reality disaggregate pretend regulating garden variety made vulnerable regulated price milk, West Lynn Creamery, Healy, 512 186, 2205, 129 157 (1994); Baldwin G.A.F. Seelig, 294 511, 497, 79 1032 (1935), keep herds cows compete dairy producers dollars milk drinkers. exempts interest, competing investment dollars, alongside structure tools competition.[14] failure appreciate goes hand selling allows advocate error focusing exclusively regulator seller, 36-39, "`when chooses citizens, acting regulator[,]' participant." *1813 564 Shaper, App.3d, 764, N.E.2d, 552).[15] To indulge single vision, require overruling most, all, Scrap. White, scrutinized dual roles. mayor promulgated bore hallmarks regulation: applied every wholly partially funds (or administered city), general restrictions hiring practices contractors, mandating 50% forces bona fide thresholds minorities (25%) women (10%) well. 205, 1042; 218-219, 1042 (Blackmun, concurring dissenting part) direct attempt govern relationships.... [It] regulation"). time, took "expend[ing] entering contracts projects." 214-215, (opinion Court). After speaking "`[t]he basic distinction regulators,'" 207, 436-437, 2271), dissect Boston's conduct former. Instead, minority labor conditions government's efforts role, dispositive. Similarly, invigorate hulks. specific controversy included "comprehensive speed scrap cycle." 796, Superficially, nature; premised view that, practical terms, "entered bid price" placed umbrella, another example. Not process trash, governmental superiors forbade deal processors. latter determine outcome, however; dispositive trash. shut old created thereby supplier necessary service. If instead monopoly hauler, struck C Carbone, Clarkstown, 383, 1677, 399 accordingly turned give paramount consideration actively dealing market; overruled doctrine describe null set maybe one, supra). each commercial activities complemented *1814 tying foray understood objective unlawful: paradigm chills creating advantage marketed actors, those employ fulfill objectives, (higher corporations little presence State); Ind., (tax sellers ethanol Ltd., sales certain liquors); Lewis BT Investment Managers, 27, 2009, 64 702 (1980) (prohibition banks owning provided advisory services); Stock Exchange Comm'n, 429 318, 599, 50 (1977) nonresidents sold out-of-state, in-state, exchange). sum, prescribe analysis; joined (the usual situation) exceptional markets public's benefit.[16] falls favors, entrepreneurs, code eye making marketable. When issues relies code, seller intimately, say, Boston. Issuing therefore processing, junk car construction; can rejecting Davises' argument viewed isolation discrimination.[17] *1815 exemption's effects felt both confirms conclusion underway points distinctive policy. broadly conceived holders fixed-income whatever source ultimate destination. treats privately elsewhere; issuer, holder, entailed grants serving objectives. specialized solely federally funds.[18] Here, counterparts stark. remarkable believes tax-and-exemption feature, (with tax) despite ranges relative wealth them. These facts suggest perceives permissible ones *1816 market. 1811-1814. An significant perception emerges examining bonds: issue, large proportion managed single-state funds. definition, features reveals intrastate absorb smaller lesser known municipalities tend ignore. Federation (compared funds, "[n]ational mutual less dedicate evaluate small, obscure infrequent issuer purchase entities"); 19 ("[N]ational higher premium liquidity holdings willing liquid familiar fund's mandate state"). many disappear upset. 18 ("[O]ne predictable impact elimination incentives disappearance, consolidation national funds"); ("Although handful continue exist small (such Florida) high populations affinity issuers, raison d'être virtually cease financially viable absence outweighed lack diversification vis-à-vis reduced asset base"); accord, States' "have fostered growth state," "[a]s compared [with] risk cost"); Kiplinger's Retirement Report, Win With Home-State Muni Funds, 2 (Dec.2004) scheme, "there's incentive create [single-state] muni funds"). Nor suggestion discover welcome weaker lose homes after victory 18, main adverse disappearance issuers" "would stand developed prevailing gaining elimination"). Financing improvements change radically feature disappeared.[19] *1817 probable indispensability maintaining borrowers underscores how probably lie business; tends explain why committed practice scholarship says often produces net lost expense saved. See, Alan Viard al. Curiae ("[S]tates routinely fail recoup subsidy form financing rates" Chalmers, Default Risk Cannot Explain Puzzle: Evidence Secured Treasury Obligations, Rev. Studies 281, 282-283 (1998))). critical operation identifiable segment financial functions, alone demonstrates unanimous desire preserve cry development fatal backup remanded analysis rule Pike, 174. IV Concluding amount death knell challenges, generally leave courtroom door plaintiffs invoking showing outweigh benefits practice. enquiry, remand now, 43. request balancing answer question: sort. 1797-98 opinion), applying not, 1; 220. need decide today, argued irrelevant, Reply 2, assumption examination record scholarly material convince Judicial Branch institutionally suited draw reliable conclusions kind satisfy case. institutional difficulty manifest train disadvantages counsel scheme: "First, harms (i.e., subdivisions) blocking access Kentucky. Second, similarly (e.g., underwriters, individuals, funds) wish sell Third, distorting impeding flow capital. Fourth, investors promoting *1818 risky, high-cost vehicles. Fifth, compelling enact decrease revenues." 9. Even drawbacks eventuate apparent anyone weighing quantifying cost-benefit subtle exercise. striking, allegedly flowing directly indirectly failed dissuade supporting system; lined prospect dims further benign flagged moment ago. Is position municipalities, ready funds? Consider definite value existing confront what-if questions. termination jeopardized eliminated cited authorities predict) take place? Would accommodate predict), replaced (unlikely, considering involved), assume taxation? Or dry up, eliminating class improvements?[20] sources produce measurable seeking capital, perceptibly freer Money spent front increased invested bonds; sinking obviated, effect flows? What questions answering inevitable uncertainty predictions trying answers, unsuitability judicial forums reaching answers possible all. 308, ("[T]he unsuited gather made, professionally untrained them"); 342, 848 ("`[C]ourts institutions poorly equipped precision various methods taxation. complexities factual proof always present potential error, familiarity evaluating *1819 taxes'" Minneapolis Star Tribune Comm'r Revenue, 575, 589-590, 1365, 295 (1983))). While business reconsidered, congressional forum advantages. hope acquiring complete information adversary trials produce, elected legislature preferable institution incurring risks alteration things done. urging miss mark think courts, ultimately invited merely tinker details scheme; asked apply throw throughout never intended authorize expose uncertainties experimentation request. * dissent rightly praises virtues warns uphold untoward consequences post, 1830. warning alarmism; elements wilting threat come, instead, dissent's approach, certainty upset settled expectations based experience before. predecessors responded earlier invitation adventurism overturning Holmes answered mode standing, habits community play part.... [T]he strong leaving improvement desired legislature." Paddell York, 211 448, 139, 53 275 (1908).[21] reversed, proceedings inconsistent opinion. ordered. STEVENS, concurring. Having dissented (2007), appropriate briefly join differently. involved marketsthe disposal Haulers. *1820 services. units trade improvements. Putting side "market previously exist," 815, (1976) (STEVENS, concurring), agree Powell's "State operates evade Balkanization." 449-450, 2271 (dissenting opinion). On hand, borrows "to protection," ante, 1805, "operat[e] enterprise" As stressed (1994)and ALITO reiterated his Haulersinstead enacting ordinances, "free, `subsidize the[ir] [program] bonds. having use earn for' management program, [they] `may rival State.'" ___[, 1797-98] 394[, 1677]; citation reliance "general bonds" merit "operating fee-for-service area established market." 1794 (ALITO, dissenting). am persuaded pays exempt law. natural beneficiaries programs financed. Moreover, enable discharge indebtedness. enhances marketability motivating support Instead borrowed bank notes syndicate lenders implicating fundraising preclude equal bonds.[*] Free tickets Derby purchasers comparable, presumably lesser, effect. my motivates taxpayers lend sort "burden" *1821 implicated jurisprudence. Chief ROBERTS, part. III-B Court. readily resolved Term's shares view. proceed alternative III-B. SCALIA, stare decisis compels me so. "an unjustified invention, expanded domain." 312, (SCALIA, concurring). Stare compel invalidation statute. explains, leap invalidating performing function. broaden "`beyond scope, intrude sphere occupied . States.'" 1798, (omission original). enough me. III-A resolves issue. IV, describes so-called "open" one. Ante, 1817. declines ill determining imposes law's benefits, "balancing" Congress. 1817-1819. problem perform incommensurate, opposite balances scale assigning policy-based weight matter apples apples, deciding three six tangerines. end side) rests suppression competition borrowing; facilitation borrowing. Of course you "outweighs" you. abandon Pike-balancing altogether legislative judgments branch assigns Bendix Autolite Midwesco Enterprises, 888, 897-898, 2218, 896 (1988) judgment). THOMAS, judgment. constitutional. body "has *1822 proved unworkable practice," "discard jurisprudence." (THOMAS, Trucking Assns., Michigan Pub. Serv. 545 439, 125 2419, 162 407 (2005) (same) ("`[T]he text sense, application'" 610, dissenting))). Because Congress' "among Const., necessarily includes prevent commerce," 1799 judgment), Legislaturenot Judiciary bears curbing acknowledges, unique. 1804. Ibid. present, vast longstanding widespread, yet refrained preempting it. Cf. Jersey Realty Title Ins. Division N.J., 338 665, 671, 70 413, 94 439 (1950) interest-bearing pre-empted conflicting statute). "face [this] silence," scheme. reverse below basis. JUSTICE KENNEDY, whom joins, dissenting. Eighteenth-century thinkers, prescient, foresee technological interdependence. Yet foundation. unobstructed barriers, indispensable unite ensure liberty progress whole people. primary objective, Framers History, know, vindicates national, borders singular shaping consciousness destiny. emerged decisions implement Constitution's design. observations offered outset underscore imprudent creates misinterpreting precedents True, opinion, wrong threaten economy unity alone. explicit, ratifies today extra, manageable, accommodation welcomed profit perhaps discrimination; stands anomaly, cannot. *1823 Reactive adjusting forcesfor instance Statealready response protectionist issue vogue. mechanisms distorted deviation essential principles, cope efficient manner; damage discrete, distorted, Many economists unfortunate, inefficient, departure principles. today's discrimination, return proper form, freed artificial restraints. seem necessary, systemic decisionif confine discourage experiments trade. incorrect reaches; delicate, sensible implementation original purpose; unsatisfactory, brief, circular contained commands respectful dissent. Protectionist policies, pursued larger trading area, prompt retaliatory response. dynamic theory saw fact. 193, 9, Confederation laws. difficult costly, energies, remove barriers negotiated agreements; few compacts seemed destined powerful immediate escalating real, soon deemed urgent. Open concerns led Annapolis Convention 1786. Morgan, Birth Republic, 1763-89, (1956). frustrations meeting built consensus necessity compact call Convention. Morison, Commager, Leuchtenburg, Growth Republic (rev. 6th ed.1969). nation, laws, dominant theme convention ratification debates followed. 22, 143-144 (C. Rossiter ed.1961) Hamilton) ("It indeed evident, superficial object, either respects finance, strongly demands superintendence"). repeat earlier, account Lopez, 549, 568-583, 1624, 626 (1995) (KENNEDY, (1824), Willson Black Bird Creek Marsh 412 (1829), (1852), elaboration expertise, *1824 preserving Nation. Though oversimplification, suffices note invalidated types barriers: impose unreasonable commerce; deterrent enactments attempting ways restrict free, corollary valid exercise powers expertise Government. eliminate sweeping legislation. line occasional detractors. CTS Dynamics America, 481 69, 95, 107 1637, 95 67 (1987) judgment); Southern Pacific Arizona Sullivan, 325 761, 790-795, 1515, 89 1915 (1945) (Black, undue rule, remains safeguard restrictive otherwise decades until act. Those background formulation used (1970), ignored discussing principle, however. invalid second instruct protect void. relevant majority, 1810-1811, address reasons advances disregard defends explaining serves "cardinal responsibilities" welfare. 1811, nn. 10-12. reformulation phrase "police power," abandoned mere tautology. identify meet description. why, unfortunate ceased concept anything instructive. contravene beneficial purpose. police shorthand empowered constraints; but, restates question. labelas dodoes analysis. said striking order, flood control needs, directing railroad bridges raise others rail lines commerce: "[A] avoid Clause] convenient apologetics power." Kansas Kaw Valley *1825 Drainage Dist., 233 75, 79, 34 58 857 (1914) Holmes, J.). holds fulfills function: raising revenue projects. 1810-1811. Aside extension ("this good law") argument, premise wrong. covenant promising relief holder. contain provision. security formal obligation repay. word promises favored holders. Indeed, done impairing marketability. payment residence holder intends encumber premiums penalties depending correct legal framework issuance, issued, incorrect; still too plain prejudicial sustained. 1810-11 dissenting) ("[T]o majority's] holding `traditional' functions nontraditional counterparts, reconciled prior precedent" (citation omitted)). insufficiency apparent, incorrect. issuance. repealed tomorrow altering matters; gives establish rule: erect commodities. Lynn, 2205 paradigmatic example protective tariff customs duty, imported State"). Nothing begins inapplicable uses enterprise. explicit issuances admitted purposes. sustained disavows protections elaborated Nation's markets. ruled protectionist, invalid. (1977). considered validity transfer transactions. heavily sales. transactions concluded exchanges, Exchange, located All conceded sufficient contacts *1826 tax; closed exchanges out-of-state. 328, 599. "[I]n discriminatorily manufactured operations performed State." 337, (1984), observing "as nonexempt effect." 271, 3049. refutes majority's contention, inquiry product competes. investor's standpoint, advantages suggested dependent nature competitors. justified goal promote industry, "determination constitutionality" depend benefited party." 273, permit outcome "benefited (1996). North Carolina devised intangibles deduction companies by, companies. 327-328, 848. "domestic competitors tend[ed], least, domestic plying trades commerce." 333, contrary 347, poses serious threats once flexible potent. issue; relatively rare, resemble tariffsthe "paradigmatic law[s] 2205. ("[T]ariffs patently reveal filled aspire reap tariffs means"). forbidding subset regulations too, today. commodities commerce, consumers *1827 entitled Dean Milk Madison, 340 349, 71 295, 329 (1951); Hunt Washington Apple Advertising 432 2434, 383 (1977); landfill, Fort Gratiot Sanitary Landfill, Dept. Natural Resources, 504 353, 112 2019, 119 139 (1992); transfer, waste, (1978); ethanol, (a case). Cases export controls relevance hereprovide instruction proposition isolated (1979) prohibiting shipment minnows England Power Hampshire, 455 331, 102 1096, 188 (1982) utility commission's permission convey electricity State). validation Term overlooks entire commerceand differentiation commercebecause monopolized industry. 1790. Nondiscrimination, involvement, rationale. justification invoked competitive, nonmonopolized and, advantage, rate. rationale differentiate Haulers; rejection principal rationalethat monopolizing next returning idea revenue-raising major flaws. First, replay circularity inherent powers, rhetoric. approval assuming respects, description ignores charitable benevolent organizations application camps primarily residents. (1997). *1828 not-for-profit 584, special, historic assistance Newfound applicable nonprofit exclude coverage affirmative aspect So, bond-issuing concludes discrete says, chooses. Quite apart proceeds, again, premise. record. investor knows. Within submarket Code. 1804-1805 103(a)). separate defines sellers' investors' touchstone definition. seller-based definition odds beneficiary benefit; relates ends sought means. Bacchus, 272-273, 3049; 1809-10 then, proceeds. consumer mistake defining No precedent permits define challenge effects. double counting work. barrier exist, nationwide tax-free reinforce restriction. alleged want irrelevant. 1816. pass, fellow bear burden, positioned barrier. circumstance measure (assuming entrenched law) quite irrelevant: "This accepted, undermine almost ordinarily *1829 consumers, products, unconstitutional." 203, 2205; 272, proves allowing principles proud exemption. That, importance adhering rules discrimination. trouble respects. wealthy, high-tax hoard travel offer competitive pretax dollars. Blumstein, Intersections Negative Federalism: Case Discriminatory Treatment Out-of-State Vand. 473, 546 (1978). wake barrier, follow, knew. illustrates dynamics politics economics, demonstrating validating somehow misapplying rationales controlling precedents, invites erosion remain serve system. categorical ways. justifying stop rate, 80%, advantage. High attractive unheard cases. Fulton, Today upholds schemes. Furthermore, condition reciprocal 1806-1807, (citing, Utah's Utah bonds), leading blocs eliminate. examples objections noted. plurality sufficiently diluted market-participant applies. needs comment. "tax involvement market-participation doctrine." 593, 1590. expansion exception, unleashed kinds lawslaws instance. quintessential act regulation, participation. Energy, 1803 [is] *1830 Ohio's assessment computation fuel subsidy, plausibly analogized purchaser"). owns downstream permitted. South-Central Timber Development, Wunnicke, 467 82, 98, 2237, 81 opinion) ("[A]lthough timber using leverage exert participant"). Throughout invalidated, disrupted. legitimate, cast terms. sui generis noting considerable time. statement disagreement consequences, misinterprets weakens preventative risking dislocations inefficiencies origin traded barriers. reasons, affirmed. ALITO, assumption, KENNEDY's NOTES [*] GINSBURG joins [1] Specifically, noncorporate "adjusted gross minus deductions. Rev.Stat. 141.010(11). "Adjusted turn, deductions spelled Code elsewhere statutes. 141.010(10). Finally, meaning 61 141.010(9); 61. [2] "Municipal commonly "debt entity." Downes Goodman, Dictionary Terms (7th ed.2006). here; references "municipal include subdivisions. amici focuses "private-activity," "industrial-revenue," "conduit" entities. (but always) contend plainly violates 25-26. below, pressed themselves, barely amici. tell disrupt Accordingly, best aside day private-activity evaluated generally. [3] exceptions derive 103(b), [4] approximated comparing "[A]t 2006, borrowing AAA-rated, 10-year average 80.3 taxable, [and] 2005 88.4 bonds." Analysts Amicus 4. [5] precise reduction depends rates, rating term factors. 8. rates. 6. [6] Government got game earlier. "every passage Sixteenth Amendment" 1913. 7.2.1, 440. [7] figure 36 identical Kentucky's. Ala.Code 40-18-4, 40-18-14(3)(f) (2003); Ariz.Rev.Stat. 43-1021(3) Supp.2007); Ark.Code 26-51-404(b)(5) (Supp.2007); Cal. Tax.Code 17133 2004); Colo.Rev.Stat. 39-22-104(3)(b) (2007); Conn. Gen.Stat. 12-701(a)(20)(A)(i) Del.Code Ann., Tit. 30, 1106(a)(1) (1997); Ga.Code 48-7-27(b)(1)(A) (2005); Haw.Rev.Stat. 39-11, 47-13 (1994), 235-7(a)(6), (b)(2) (2001); Idaho 63-3022M(1), (3)(b) (Lexis 2007); Kan. Stat. 79-32,117(b)(i) (2006 Cum.Supp.); La. 47:48, 47:293(9)(a), (b) 2001 Supp.2008); Me.Rev.Stat. 36, 5122(1)(A) Md. Tax-Gen. 10-204(b) Supp. Mass. Gen. Laws, 62, 2(a)(1)(A) 2006); Mich. Comp. 206.30(1)(a) Minn.Stat. 290.01, subd. 19a(1)(i) (2006); Miss.Code 27-7-15(4)(d) Mo.Rev. 143.121(2)(b) (2007 Supp.); Mont. 15-30-111(2)(a)(i) Neb. 77-2716(1)(c) N.H.Rev.Stat. 77:4(I) N.J. 54A:6-14 2002); N.M. 7-2-2(B)(3), (V) 612(b)(1) 105-134.6(b)(1)(b), (c)(1) 2005); N.D. Cent.Code 57-38-01.2(1)(g) Rev.Code 5747.01(A)(1) Ore. 316.680(2)(a) Pa. 72, 9901 (Purdon 2000); R.I. 44-30-12(b)(1) S.C.Code 12-6-1120(1) (2000); Tenn. 67-2-104(e)(1) Vt. 32, 5811(18)(A)(i)(II) 58.1-322(B)(1), (C)(2) Va.Code 11-21-12(b)(1), (c)(2) Supp.2007). four some, Iowa 422.7(36) Okla. Stat., 68, 2358.5, 2358.5A 2007 Wis. 71.05(1)(c) (2003-2004); compare Ill. 5/203(a)(2)(A) 2006) 45, 35/80(e). remaining extends 59-10-114(1)(g), (6) Indiana Ind.Code 6-3-1-3.5 balance [8] holding, grounds. Carbone ordinance, facility, "this constitutionally significant" adverted text. Although facility "essentially facility," 419, 1677 SOUTER, J.), characterized private, 1793-94. [9] dissent) rationalization, acceptance equivalent power" "tautology," justified. 1824. misunderstands asking fine distinctions fulfilling interests, local. preference, enquiry other. 1809; 1810, 1795-96. aimed, entails neither tautology nor hopeless effort pick (1985). One dissenters 1825, 1827, 1828; carry battle fought (The realism legitimacy provisions aggregated finance. infra, 1812-1813, 1829.) [10] Buyer, Apr. 20, 2007, col. (describing Grayson County Hospital District Corporation). [11] June 29, 3 Todd "Detention Facility Project"). [12] cols. 2-3 School [13] Contrary dissent, 1828, recognize broadly. 1815-1816. contours characterization [14] discussion claims 1826. [15] same. 1829. [16] Significantly, supplies uniquely product. (1980). nothing inherently produced, recognized buyers regular undoubtedly unconstitutional. [17] criticizes (1997), "[a] misses leaves language shorn context. unaccompanied State; institutions. correctly constitutes occasion consider employs facilitate noted before, premises disaggregation treatment, 1829; strikes denial reality. suggests conflicts 1829-1830, conflict. South-Central, Alaska conditioned processed export, plurality's requirement constituted "restrictio[n] dispositions subsequent coming rest hands." 2237; 2237 ("Under requirement, purchaser]: he buys processing"). disposition whomever please. "downstream regulation" objectionable 2237. "more rigorous" "foreign commerce" resale "a resource." 100, 96, Neither appears [18] Brief) ("In approximately $365 [municipal] $155 $210 230 [and March 2007,] $254 [in short-term bonds] $125 funds" Company Institute, Fact Book 98; Lipper Analytical Services, Fixed Fund Performance Analysis, 1st Quarter Report)); ("[A]pproximately 58% [owned funds] 67% purchased regard match shareholders"). [19] opposition petition, removed, "states instruments." Opposition 10-11. result, "[o]nce coercive schemes, selective fund.... careful selecting funding sales." 5. [20] History poorer places harder taking least investments. Goldin Katz, Shaping Higher Education: Formative Years 1890 1940, Econ. Perspectives 37, 50-55 (Winter 1999) (per capita universities depended wealth); Goldin, America's Graduation School: Evolution Spread Secondary Schooling Twentieth Century, Hist. 345, 369-372 (1998) (likewise schools). [21] thinks "controlling rationale" 15, acknowledged such. Holmes's shows, constitutionality considerations discussed preferences discriminations taxes. lieu increasing enlarged partake

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