Court Opinion

ID: 9427147
Source: CourtListenerOpinion
Date Created: 2023-08-02 23:19:52.978223+00
Date Added: 2024-06-11T17:23:04.630879
License: Public Domain

Mr. Justice Powell,
concurring in part and concurring in the result.
I join the opinion of the Court with the exception of Part 1II-B. As that section of the Court’s opinion appears to *762resurrect the discarded “direct-indirect” test, I cannot join it.
In Michelin Tire Corp. v. Wages, 423 U. S. 276 (1976), this Court abandoned the traditional, formalistic methods of determining the validity of state levies under the Import-Export Clause and applied a functional analysis based on the exaction’s relationship to the three policies that underlie the Clause: (i) preservation of uniform federal regulation of foreign relations; (ii) protection of federal revenue derived from imports; and (iii) maintenance of harmony among the inland States and the seaboard States. The nondiscriminatory ad valorem property tax in Michelin was held not to violate any of those policies, but the Court suggested that even a nondiscriminatory tax on goods merely in transit through the State might run afoul of the Import-Export Clause.
The question the Court addresses today in Part III-B is whether the business tax at issue here is such a tax upon goods in transit. The Court gives a negative answer, apparently for two reasons. The first is that Canton R. Co. v. Rogan, 340 U. S. 511 (1951), indicates that this is a tax “not on the goods but on the handling of them at the port.” Id., at 514 (emphasis in original). While Canton R. Co. provides precedential support for the proposition that a tax of this kind is not invalid under the Import-Export Clause, its rather artificial distinction between taxes on the handling of the goods and taxes on the goods themselves harks back to the arid “direct-indirect” distinction that we rejected in Complete Auto Transit, Inc. v. Brady, 430 U. S., 274 (1977), in favor of analysis framed in light of economic reality.
The Court’s second reason for holding that the instant tax is not one on goods in transit has the surface appearance of economic-reality analysis, but turns out to be the “direct-indirect” test in another guise. The Court likens this tax to the one at issue in Canton R. Co. and declares that since “ [t] axation in neither setting relates to the value of the goods,... in neither can it be considered taxation upon the goods themselves.” *763Ante, at 757. That this distinction has no economic significance is apparent from the fact that it is possible to design transit fees that are imposed “directly” upon the goods, even though the amount of the exaction bears no relation to the value of the goods. For example, a State could levy a transit fee of $5 per ton or $10 per cubic yard. These taxes would bear no more relation to the value of the goods than does the tax at issue here, which is based on the volume of the stevedoring companies’ business, and, in turn, on the volume of goods passing through the port. Thus, the Court does not explain satisfactorily its pronouncement that Washington’s business tax upon stevedoring — in economic terms — is not the type of transit fee that the Michelin Court questioned.
In my view, this issue can be resolved only with reference to the analysis adopted in Michelin. The Court’s initial mention of the validity of transit fees in that decision is found in a discussion concerning the right of the taxing state to seek a quid pro quo for benefits conferred by the State:
“There is no reason why local taxpayers should subsidize the services used by the importer; ultimate consumers should pay for such services as police and fire protection accorded the goods just as much as they should pay transportation costs associated with those goods. An evil to be prevented by the Import-Export Clause was the levying of taxes which could only be imposed because of the peculiar geographical situation of certain States that enabled them to single out goods destined for other States. In effect, the Clause was fashioned to prevent the imposition of exactions which were no more than transit fees on the privilege of moving through a State. [The tax at issue] obviously stands on a different footing, and to the extent there is any conflict whatsoever with this purpose of the Clause, it may be secured merely by prohibiting the assessment of even nondiscriminatory property taxes on goods which are merely in transit through the State when *764the tax is assessed.” 423 U. S., at 289-290. (Footnotes omitted.)
In questioning the validity of “transit fees,” the Michelin Court was concerned with exactions that bore no relation to services and benefits conferred by the State. Thus, the transit-fee inquiry cannot be answered by determining whether or not the tax relates to the value of the goods; instead, it must be answered by inquiring whether the State is simply making the imported goods pay their own way, as opposed to exacting a fee merely for “the privilege of moving through a State.” Ibid.
The Court already has answered that question in this case. In Part II-C; the Court observes that “nothing in the record suggests that the tax is not fairly related to services and protection provided by the State.” Ante, at 750-751. Since the stevedoring companies undoubtedly avail themselves of police and fire protection, as well as other benefits Washington offers its local businesses, this statement cannot be questioned. For that reason, I agree with the Court’s conclusion that the business tax at issue here is not a “transit fee” within the prohibition of the Import-Export Clause.