Lead Opinion
delivered the opinion of the Court.
Thе question presented is whether an otherwise generally applicable state property tax violates the Commerce Clause of the United States Constitution, Art. I, § 8, cl. 3, because its exemption for property owned by charitable institutions excludes organizations operated principally for the benefit of nonresidents.
I
Petitioner is a Maine nonprofit corporation that operates a summer camp for the benefit of children of the Christian Science faith. The regimen at the camp includes supervised prayer, meditation, and church services designed to help the children grow spiritually and physically in accordance with the tenets of their religion. App. 40-41. About 95 percent of the campers are not residents of Maine. Id., at 44.
The camp is located in the town of Harrison (Town); it occupies 180 acres on the shores of a lake about 40 miles northwest of Portland. Brief for Respondents 4, and n. 6. Petitioner’s revenues include camper tuition averaging about $400 per week for each student, contributions from private donors, and income from a “modest endowment.” App. 42, 51. In recent years, the camp has had an annual operating deficit of approximately $175,000. Id., at 41. From 1989 to 1991, it paid over $20,000 in real estate and personal property taxes each year.
In 1992 petitioner made a formal request to the Town for a refund of taxés paid from 1989 through 1991, and a continuing exemption from future property taxes, based principally on. a claim that the tax exemption statute violated the Commerce Clause of the Federal Constitution.
“Denial of a tax exemption is explicitly and primarily triggered by engaging in a certain level of interstate commerce. This denial makes operation of the institutions serving non-residents more expensive. This increased cost results from an impermissible distinction between in-state and out-оf-state consumers. See Commonwealth Edison Co.,453 U. S., at 617-19 . . . . Maine’s charitable tax exemption is denied, not because there is a difference between the activities of charitable institutions serving residents and non-residents, but because of the residency of the people whom the institutions serve.” App. to Pet. for Cert. 14a-15a (footnote omitted).
The Town, but not the State, appealed and the Maine Supreme Judicial Court reversed.
We granted certiorari.
II
During the first years of our history as an independent confederation, the National Government lacked the power to regulate commerce among the States. Because each State was free to adopt measures fostering its own local interests without regard to possible prejudice to nonresidents, what Justice Johnson characterized as a “conflict of commercial regulations, destructive to the harmony of the States,” ensued. See Gibbons v. Ogden,
We have subsequently endorsed Justice Johnson’s appraisal of the central importance of federal control over interstate and foreign commerce and, more narrowly, his conclusion that the Commerce Clause had not only granted Congress express authority to override restrictive and conflicting commercial regulations adopted by the States, but that it also had immediately effected a curtailment of state power. “In short, the Commerce Clause even without implementing legislation by Congress is a limitation upon the power of the States. Southern Pacific Co. v. Arizona ex rel.
This case involves an issue that we have not previously addressed — the disparate real estate tax treatmеnt of a nonprofit service provider based on the residence of the consumers that it serves. The Town argues that our dormant Commerce Clause jurisprudence is wholly inapplicable to this ease, because interstate commerce is not implicated here and Congress has no power to enact a tax on real estate. We first reject these arguments, and then explain why we think our prior cases make it clear that if profit-making enterprises were at issue, Maine could not tax petitioner more heavily than other camp operators simply because its campers come principally from other States. We next address the novel question whether a different rule should apply to a discriminatory tax exemption for charitable and benevolent institutions. Finally, we reject the Town’s argument that the exemption should either be viewed as a permissible subsidy or as a purchase of services by the State acting as a “market participant.”
III
We are unpersuaded by the Town’s argument that the dormant Commerce Clause is inapplicable here, either because campers are not “articles of commerce” or, more generally, because the camp’s “product is delivered and ‘consumed’ entirely within Maine.” Brief for Respondents
Summer camps are comparable to hotels that offer their guests goods and services that are consumed locally. In Heart of Atlanta Motel, Inc. v. United States,
Although Heart of Atlanta involved Congress’ affirmative Commerce Clause powers, its reasoning is applicable here. As we stated in Hughes v. Oklahoma,
The Town’s arguments that the dormant Commerce Clause is inapplicable to petitioner because the campers are not “articles of commerce,” or more generally that interstate commerce is not at issue here, are therefore unpersuasive. The services that petitioner provides to its principally out-of-state campers clearly have a substantial effect on commerce, as do state restrictions on making those services available to nonresidents. Cf. C & A Carbone, Inc. v. Clarkstown,
The Town also argues that the dormant Commerce Clause is inapplicable because a real estate tax is at issue. We disagree. A tax on real estate, like any other tax, may imper-missibly burden interstate commerce. We may assume as the Town argues (though the question is not before us) that Congress could not impose a national real estate tax. It does not follow that the States may impose real estate taxes in a manner that discriminates against interstate commerce. A State’s “power to lay and collect taxes, comprehensive and necessary as that power is, cannot be exerted in a way which
To allow a State to avoid the strictures of the dormant Commerce Clause by the simple device of labeling its discriminatory tax a levy on real estate would destroy the barrier against protectionism that the Constitution provides. We noted in West Lynn Creamery, Inc. v. Healy,
We therefore turn to the question whether our prior cases preclude a State from imposing a higher tax on a camp that serves principally nonresidents than on one that limits its services primarily to residents.
IV
There is no question that were this statute targeted at profit-making entities, it would violate the dormant Commerce Clause. “State laws discriminating against interstate commerce on their face are Virtually per se invalid.’ ” Fulton Corp. v. Faulkner,
If such a policy were implemented by a statutory prohibition against providing camp services to nonresidents, the statute would almost certainly be invalid. We have “consistently .. . held that the Commerce Clause .. . precludes a state from mandating that its residents be given a preferred right of access, over out-of-state consumers, to natural resources located within its borders or to the products derived therefrom.” New England Power Co. v. New Hampshire,
Avoiding this sort of “economic Balkanization,” Hughes v. Oklahoma,
Of course, this case does not involve a total prohibition. Rather, the statute provides a strong incentive for affected entities not to do business with nonresidents if they are able to so avoid the discriminatory tax. In this way, the statute is similar to the North Carolina “intangibles tax” that we struck down in Fulton Corp. v. Faulkner,
To the extent that affected Maine organizations are not deterred by the statute from doing a principally interstate business, it is clear that discriminatory burdens on interstate commerce imposed by regulation or taxation may also violate the Commerce Clause. We have held that special fees assessed on nonresidents directly by the State when they attempt to use local services impose an impermissible burden on interstate commerce. See, e. g., Chemical Waste Management, Inc. v. Hunt,
Unlike in Chemical Waste, we recognize that here the discriminatory burden is imposed on the out-of-state customer indirectly by means of a tax on the entity transacting business with the non-Maine customer. This distinction makes no analytic difference. As we noted in West Lynn Creamery discussing the general phenomenon of import tariffs: “For over 150 years, our cases have rightly concluded that the imposition of a differential burden on any part of the stream of commerce — from wholesaler to retailer to consumer — is invalid, because a burden placed at any point will result in a disadvantage to the out-of-state producer.”
With respect to those businesses — like petitioner’s — that continue to engage in a primarily interstate trade, the Maine statute therefore functionally serves as an export tariff that targets out-of-state consumers by taxing the businesses that
Ninety-five percent of petitioner’s campers come from out of State. Insofar as Maine’s discriminatory tax has increased tuition, that burden is felt almost entirely by out-of-staters, deterring them from enjoying the benefits of camping in Maine.
We recognize that the Town might have attempted to defend the Maine law under the per se rule by demonstrating that it “ ‘advances a legitimate local purpose that cannot be adequately served by reasonable nondiscriminatory alternatives.’ ” Id., at 101 (quoting New Energy Co.,
V
The unresolved question presented by this case is whether a different rule should apply to tax exemptions for charitable and benevolent institutions. Though we have never had cause to address the issue directly, the applicability of the dormant Commerce Clause to the nonprofit sector of the economy follows from our prior decisions.
Our cases have frequently applied laws regulating commerce to not-for-profit institutions. In Associated Press v. NLRB,
We have similarly held that federal antitrust laws are applicable to the anticompetitive activities of nonprofit organizations. See National Collegiate Athletic Assn. v. Board of Regents of Univ. of Okla.,
We have already held that the dormant Commerce Clause is applicable to activities undertaken without the intention of earning a profit. In Edwards v. California,
We see no reason why the nonprofit character of an enterprise should exclude it from the coverage of either the affirmative or the negative aspect of the Commerce Clause. See Hughes,
A nonprofit entity is ordinarily understood to differ from a for-profit corporation principally because it “is barred from distributing its net earnings, if any, to individuals who exercise control over it, such as members, officers, directors, or trustees.” Id., at 838.
For purposes of Commerce Clause analysis, any categorical distinction between the activities of profit-making enterprises and not-for-profit entities is therefore wholly illusory. Entities in both categories are major participants in interstate markets. And, although the summer camp involved in this ease may have a relatively insignificant impact on the commerce of the entire Nation, the interstate commercial activities of nonprofit entities as a class are unquestionably significant.
VI
Rather than urging us to create a categorical exception for nonprofit entities, the Town argues that Maine’s exemption statute should be viewed as an expenditure of government money designed to lessen its social service burden and to foster the societal benefits provided by charitable organizations. So characterized, the Town submits that its tax exemption scheme is either a legitimate discriminatory subsidy
The Town argues that its discriminatory tax exemption is, in economic reality, no different from a discriminatory subsidy of those charities that cater principally to local needs. Noting our statement in West Lynn Creamery that “[a] pure subsidy funded out of gеneral revenue ordinarily imposes no burden on interstate commerce, but merely assists local business,”
In New Energy Co. of Ind. v. Limbach,
In Alexandria Scrap we concluded that the State of Maryland had, in effect, entered the market for abandoned automobile hulks as a purchaser because it was using state funds to provide bounties for their removal from Maryland streets and junkyards. Id., at 809-810. In Reeves, the State of South Dakota similarly participated in the market for cement as a seller of the output of the cement plant that it had owned and operated for many years.
Maine’s tax exemption statute cannot be characterized as a proprietary activity falling within the market-participant exception. In New Energy Co., Ohio argued similarly that a discriminatory tax credit program fell within the exception. We noted that the tax program had “the purpose and effect of subsidizing a particular industry, as do many dispositions of the tax laws.”
Even if we were prepared to expand the exception in the manner suggested by the Town, the Maine tax statute at issue here would be a poor candidate. Like the tax exemption upheld in Walz — which applied to libraries, art galleries, and hospitals as well as churches
As was true in Bacchus Imports, Ltd. v. Dias, the facts of this particular case, viewed in isolation, do not appear to pose any threat to the health of the national economy. Nevertheless, history, including the history of commercial conflict that preceded the Constitutional Convention as well as the uniform course of Commerce Clause jurisprudence animated and enlightened by that early history, provides the context in which each individual controversy must be judged. The history of our Commerce Clause jurisprudence has shown that even the smallest scale discrimination can interfere with the project of our Federal Union. As Justice Cardozo recognized, to countenance discrimination of the sort that Maine’s statute represents would invite significant inroads on our “national solidarity”:
“The Constitution was framed under the dominion of a political philosophy less parochial in range. It was framed upon the theory that the peoples of the several states must sink or swim together, and that in the long run prosperity and salvation are in union and not division.” Baldwin v. G. A. F. Seelig, Inc.,294 U. S. 511 , 523 (1935).
The judgment of the Maine Supreme Judicial Court is reversed.
It is so ordered.
Notes
Most of petitioner’s tax bill was for real estate taxes. See, e. g., App. 43 (petitioner paid 1991 real estate taxes of $20,770.71 and personal property taxes of $994.70).
The statute provides:
“The following property of institutions and organizations is exempt from taxation:
“1. Property of institutions and organizations.
“A. The real estate and personal property owned and occupied or used solely for their own purposes by benevolent and charitable institutions incorporated by this State, and none of these may be deprived of the right of exemption by reason of the source from which its funds are derived or by reason of limitation in the classes of persons for whose benefit such funds are applied.
“(1) Any such institution that is in fact conducted or operated principally for the benefit of persons who are not residents of Maine is entitled to an exemption not to exceed $50,000 of current just value only when the total amount of any stipends or charges that it makes or takes during any tax year, as defined by section 502, for its services, benefits or advantages divided by the total number of persons receiving such services, benefits or advantages during the same tax year does not result in an average rate in excess of $30 per week when said weekly rate is computed by dividing the average yearly charge per person by the total number of weeks in a tax year during which such institution is in fact conducted or operated principally for the benefit of persons who are not residents of Maine. No such institution that is in fact conducted or operated principally for the benefit of persons who are not residents of Maine and makes charges that result in an average weekly rate per person, as computed under this sub-paragraph, in excess of $30 may be entitled to tax exemption. This sub-paragraph does not apply to institutions incorporated as nonprofit corporations for the sole purpose of conducting medical research.
“For the purposes of this paragraph, ‘benevolent and charitable institutions’ include, but are not limited to, nonprofit nursing homes and nonprofit*569 boarding homes and boarding care facilities licensed by the Department of Human Services pursuant to Title 22, chapter 1665 or its successor, nonprofit community mental health service facilities licensed by the Commissioner of Mental Health, Mental Retardation, and Substance Abuse Services, pursuant to Title 34-B, chapter 3 and nonprofit child care centers incorporated by this State as benevolent and charitable institutions. For the purposes of this paragraph, ‘nonprofit’ means a facility exempt from taxation under Section 501(c)(3) of the Code . . . .” Me. Rev. Stat. Ann., Tit. 36, § 652(1)(A) (Supp. 1996).
The statute’s language reserving the property tax exemption for those entities operated “principally for the benefit” of Maine residents is not without ambiguity. The parties are in agreement, however, that because petitioner’s camp is attended almost entirely by out-of-staters, it would not qualify for the exemption under any reading of the language. See Brief for Petitioner 2; Brief for Respondents 2, n. 3; Tr. of Oral Arg. 36. The courts below appear to have presumed the same, and we of course accept their interpretation of state law.
Petitioner also аrgued below that the Maine statute violated the Equal Protection Clauses of the United States and Maine Constitutions, and the Privileges and Immunities Clause, Art. IV, §2, of the Federal Constitution. The Maine Supreme Judicial Court had already found the statute constitutional under an equal protection analysis in a prior decision, and adhered to its earlier view. See Green Acre Baha’i Institute v. Eliot,
The Superior Court referred to all of the original defendants as “Municipal Defendants” because the State of Maine intervened to defend the constitutionality of its statute. App. to Pet. for Cert. 9a. However, the
Me. Rev. Stat. Ann., Tit. 36, § 196 (1990).
See also West Lynn Creamery, Inc. v. Healy,
See New York v. United States,
In West v. Kansas Natural Gas Co.,
We have long noted the applicability of our dormant Commerce Clause jurisprudence to service industries. See, e. g., C & A Carbone, Inc. v. Clarkstown,
The Town argues that “the Commerce Clause protects out-of-state competitors but does not protect out-of state consumers.” Brief for Respondents 16. As the discussion above indicates, our cases have rejected this view.
See Bacchus Imports, Ltd. v. Dias,
Because the Maine tax is facially discriminatory, this ease is unlike Commonwealth Edison Co. v. Montana,
CTS Corp. v. Dynamics Corp. of America,
We therefore have no need to consider these matters further. Cf. Fulton Corp. v. Faulkner,
The Town argues that these effects are entirely speculative, because the record does not reflect any decision by a potential camper not to attend petitioner’s camp as a result of the burden imposed. Brief for Respondents 16. The Supreme Judicial Court appears to have adopted similar reasoning.
Justice Scalia submits that we err by following our precedent in Fulton and declining to address an argument that the Town itself did not think worthy of pressing. Post, at 602-603. But even if there were reason to consider the State’s compliance with the per se rule, the Town would not prevail. In the single case Justice Scalia points to in which we found the per se standard to have been met, Maine v. Taylor,
In contrast, here Maine has ample alternatives short of a facially discriminatory property tax exemption to achieve its apparent goal of subsidizing the attendance of the State’s children at summer camp. Maine could, for example, achieve this end by offering direct financial support to parents of resident children. Cf. Shapiro v. Thompson,
While the Town does argue its case under the less exacting analysis set forth in, e. g., Pike v. Bruce Church, Inc.,
Maine’s law governing nonprofits embraces this conception, see Me. Rev. Stat. Ann., Tit. 13-B, § 102(9) (1981), as does the tax exemption statute at issue here. The exemption applies to “benevolent and charitable institutions.” Me. Rev. Stat. Ann., Tit. 36, §652(1)(A) (Supp. 1996). To qualify, the entity must devote “[a]ll profits derived from [its] operation . . . and the proceeds from the sale of its property . . . exclusively to the purposes for which it is organized.” § 652(1)(C)(3). “A director, trustee, officer or employee of an organization claiming exemption is not entitled to receive directly or indirectly any pecuniary profit from the operation of that organization, excepting reasonable compensation for services in effecting its purposes.” § 652(1)(C)(2). The statute also expressly designates certain categories of entities (nonprofit nursing homes, boarding homes, community mental health service facilities, and child care centers) that qualify for tax exempt status under federal law, 26 U. S. C. § 501(c)(3), as falling within its ambit. See Me. Rev. Stat. Ann., Tit. 36, § 652(1)(A) (Supp. 1996) (“‘[B]enevolent and charitable institutions’ include, but are not limited to, [the specified entities]”).
We are informed by amici that “the nonprofit sector spends over $389 billion each year in operating expenses — approximately seven percent of the gross national product.” Brief for American Council on Education et al. as Amici Curiae 19. In recent years, nonprofits have employed approximately seven percent of the Nation’s paid workers, roughly 9.3 million people in 1990. V. Hodgkinson, M. Weitzman, C. Toppe, & S. Noga, Nonprofit Almanac 1992-1993: Dimensions of the Independent Sector 29 (1992) (Table 1.5).
Justice Scalia wrongly suggests that Maine’s law offers only a “narrow tax exemption,” post, at 598, which he implies has no substantial effect on interstate commerce and serves only “to relieve the State of its burden of caring for its residents,” post, at 596. This characterization is quite misleading. The statute expressly exempts from tax property used by such important nonprofit service industries as nursing homes and child care centers. See Me. Rev. Stat. Ann., Tit. 36, § 652(1)(A)(1) (Supp. 1996). Nonprofit participation in these sectors is substantial. Nationally, nonprofit nursing homes had estimated revenues of $18 billion in 1994. U. S. Bureau of the Census, Service Annual Survey: 1994 (1996) (Table 7.3). These entities compete with a sizeable for-profit nursing home sector, which had revenues of approximately $40 billion in 1994. Id., at Table 7.1. Similarly, the $5 billion nonprofit market in child day care services competes with an $11 billion for-profit industry. Id., at Tables 8.1, 8.3 (1994 data).
Nonprofit hospitals and health maintenance organizations also receive an exemption from Maine’s property tax. See Me. Rev. Stat. Ann., Tit.
Maine law further permits qualifying nonprofits to rent out their property on a commercial basis at market rates in order to support other activities, so long as that use of the property is only incidental to their own purposes. See Maine Medical Center,
Contrary to Justice Scalia’s suggestion, nothing in our holding today “prevent[s] a State from giving a tax break to charities that benefit the State’s inhabitants.” Post, at 595. The States are, of course, free to provide generally applicable nondiscriminatory tax exemptions without running afoul of the dormant Commerce Clause.
See n. 8, supra.
We must admit to some puzzlement as to the force of the argument underlying Justice Scalia’s dissent. On the one hand, he suggests that a categorical exemption of nonprofit activities from dormant Commerce Clause scrutiny would be proper. Post, at 607-608. Yet at the same time, he makes a great effort to characterize this statute as being so narrow that, whatever the appropriate generally applicable rule, the dormant Commerce Clause ought not to apply here. Post, at 598. As we have explained, the argument in favor of a categorical exemption for nonprofits is unpersuasive, and we disagree with Justice Scalia’s characterization of this statute’s effects. Accordingly, we reject his position on either of these theories.
As the Supreme Judicial Court made clear,
We noted: “Obviously a direct money subsidy would be a relationship pregnant with involvement and, as with most governmental grant programs, could encompass sustained and detailed administrative relationships for enforcement of statutory or administrative standards, but that is not this case.” Walz,
We reasoned that “New York’s statute [cannot be read] as attempting to establish religion; it. . . simply spar[es] the exercise of religion from the burden of property taxation levied on private profit institutions.” Id., at 673.
“The grant of a tax exemption is not sponsorship since the government does not transfer part of its revenue to churches but simply abstains from demanding that the church support the state. No one has ever suggested that tax exemption has converted libraries, art galleries, or hospitals into arms of the state or put employees ‘on the public payroll.’ ” Id., at 675. As Justice Brennan noted: “Tax exemptions and general subsidies ... are qualitatively different.” Id., at 690 (concurring opinion).
The distinction provides a sufficient response to the Town’s argument that our ruling today would invalidate a State’s subsidization of all or part of its residents’ tuition at state-owned universities.
Justice Scalia, post, at 605-606, and n. 4, would distinguish this line of authority by holding that it should not apply where a State is giving tax relief to charitable enterprises. As explained in Part V, supra, we see no categorical reason to treat for-profit and nonprofit entities differently under the dormant Commerce Clause. Justice Scalia’s heavy reliance upon Board of Ed. of Ky. Annual Conference of Methodist Episcopal Church v. Illinois,
See Walz,
See Me. Rev. Stat. Ann., Tit. 36, §652(1)(A) (Supp. 1996) (“For the purposes of this paragraph, ‘benevolent and charitable institutions’ include, but are not limited to, nonprofit nursing homes and nonprofit boarding homes аnd boarding care facilities . . . , nonprofit community mental health service facilities . . . [,] and nonprofit child care centers”) (emphasis added).
Dissenting Opinion
dissenting.
The Court’s negative Commerce Clause jurisprudence has drifted far from its moorings. Originally designed to create a national market for commercial activity, it is today invoked to prevent a State from giving a tax break to charities that benefit the State’s inhabitants. In my view, Maine’s tax exemption, which excuses from taxation only that property
I
We have often said that the purpose of our negative Commerce Clause jurisprudence is to create a national market. As Justice Jackson once observed, the “vision of the Founders” was “that every farmer and every craftsman shall be encouraged to produce by the certainty that he will have free access to every market in the Nation, that no home embargoes will withhold his exports, and no foreign state will by customs duties or regulations exclude them.” H. P. Hood & Sons, Inc. v. Du Mond,
Our cases have struggled (to put it nicely) to develop a set of rules by which we may preserve a national market without needlessly intruding upon the States’ police powers, each exercise of which no doubt has some effect on the commerce of the Nation. See Oklahoma Tax Comm’n v. Jefferson Lines, Inc.,
While the “virtually per se rule of invalidity” entails application of the “strictest scrutiny,” Hughes v. Oklahoma,
In addition to laws that employ suspect means as a necessary expedient to the advancement of legitimate state ends, we have also preserved from judicial invalidation laws that confer advantages upon the State’s residents but do so without regulating interstate commerce. We have therefore excepted the State from scrutiny when it participates in markets rather than regulates them — by selling cement, for example, see Reeves, Inc. v. Stake,
II
In applying the foregoing principles to the case before us, it is of course important to understand the precise scope of the exemption created by Me. Rev. Stat. Ann., Tit. 36, §652(1)(A) (Supp. 1996-1997). The Court’s analysis suffers from the misapprehension that § 652(1)(A) “sweeps to cover broad swathes of the nonprofit sector,” ante, at 594, including nonprofit corporations engaged in quintessential^ commercial activities. That is not so. A review of Maine law demonstrates that the provision at issue here is a narrow tax exemption, designed merely to compensate or subsidize those organizations that contribute to the public fisc by dispensing public benefits the State might otherwise provide.
Although Maine allows nonprofit corporations to be organized “for any lawful purpose,” Me. Rev. Stat. Ann., Tit. 13-B, §201 (1981 and Supp. 1996-1997), the exemption supplied by § 652(1)(A) does not extend to all nonprofit organizations, but only to those “benevolent and charitable institutions,” §652(1)(A), which are “organized and conducted exclusively for benevolent and charitable purposes,” § 652(1)(C)(1) (emphasis added), and only to those parcels of real property and items of personal property that are used “solely,” §652(1)(A), “to further the organization’s charitable purposes,” Poland v. Poland Springs Health Institute, Inc.,
“Tor the benefit of an indefinite number of persons, either by bringing their minds or hearts under the influence of education or religion, by relieving their bodies from disease, suffering, or constraint, by assisting them*599 to establish themselves in life, or by erecting or maintaining public buildings or works or otherwise lessening the burdens of government.’ ” Lewiston v. Marcotte Congregate Housing, Inc.,673 A. 2d 209 , 211 (1996) (emphasis added).
Moreover, the Maine Supreme Judicial Court has further limited the § 652(1)(A) exemption by insisting that the party claiming its benefit “bring its claim unmistakably within the spirit and intent of the act сreating the exemption,” ibid. (internal quotation marks omitted), and by proclaiming that the spirit and intent of § 652(1)(A) is to compensate charitable organizations for their contribution to the public fisc. As the court has explained:
“ ‘[A]ny institution which by its charitable activities relieves the government of part of [its] burden is conferring a pecuniary benefit upon the body politic, and in receiving exemption from taxation it is merely being given a “quid pro quo” for its services in providing something which otherwise the government would have to provide.’” Episcopal Camp Foundation, Inc. v. Hope,666 A. 2d 108 , 110 (1995) (quoting Young Men’s Christian Assn. of Germantown v. Philadelphia,323 Pa. 401 , 413,187 A. 204 , 210 (1936)).
Thus, § 652(1)(A) exemptions have been denied to organizations that do not provide substantial public benefits, as defined by reference to the state public policy. In one case, for example, an organization devoted to maintaining a wildlife sanctuary was denied exemption on the ground that the preserve’s prohibition on deer hunting conflicted with state policy on game management, so that the preserve could not be deemed to provide a public benefit. See Holbrook Island Sanctuary v. Brooksville,
The Maine Supreme Judicial Court has adhered rigorously to the requirement that the exempt property be used “solely” for charitable purposes. Even when there is no question that the organization owning the property is devoted exclusively to charitable purposes, the entire exemption will be forfeited if even a small fraction of the property is not used in furtherance of those purposes. See Lewiston, supra, at 212-213 (denying exemption to a building 18 percent of which was leased at market rates); Nature Conservancy of Pine Tree State, Inc. v. Bristol,
That § 652(1)(A) serves to compensate private charities for helping to relieve the State of its burden of caring for its residents should not be obscured by the fact that this particular case involves a summer camp rather than a more traditional form of social service. The statute that the Court strikes down does not speak of “camps” at all, but rather lists as examples of “benevolent and charitable institutions” nonprofit nursing homes, boarding homes, community mental health service facilities, and child care centers, see § 652(1)(A). Some summer camps fall within the exemption under a 1933 decision of the Supreme Judicial Court which applied it to a tuition-free camp for indigent children, see Camp Emoh Associates v. Inhabitants of Lyman,
III
I turn next to the validity of this focusеd tax exemption— applicable only to property used solely for charitable purposes by organizations devoted exclusively to charity — under the negative Commerce Clause principles discussed earlier. The Court readily concludes that, by limiting the class of eligible property to that which is used “principally for the benefit of persons who are Maine residents,” the statute “facially discriminates” against interstate commerce. That seems to me not necessarily true. Disparate treatment constitutes discrimination only if the objects of the disparate treatment are, for the relevant purposes, similarly situated. See General Motors Corp. v. Tracy,
The Court seeks to establish “facial discrimination”-by showing that the effect of treating disparate property disparately is to produce higher costs for those users of the property who come from out of State. But -that could be regarded as an indirect effect upon interstate commerce produced by a tax scheme that is not facially discriminatory, which means that the proper mode of analysis would be the more lenient “balancing” standard discussed, above. We follow precisely this mode of analysis in Tracy, upholding an Ohio law that provides preferential tax treatment to domestic public utilities. Such entities, we conclude, are not “similarly situated” to other fuel distributors; their insulation from out-of-state competition does not violate the negative Commerce Clause because it “serves important interests in health and safety.”
Even if, however, the Maine statute displays “facial discrimination” against interstate commerce, that is not the end of the analysis. The most remarkable thing about today’s judgment is that it is rendered without inquiry into whether the purposes of the tax exemption justify its favoritism.
If the Court were to proceed with that further analysis it would have to conclude, in my view, that this is one of those cases in which the “virtually per se rule of invalidity” does not apply. Facially discriminatory or not, the exemption is no more an artifice of economic protectionism than any state law which dispenses public assistance only to the State’s residents.
If the negative Commerce Clause requires the invalidation of a law such as §652(1)(A), as a logical matter it also requires invalidation of the laws involved in those cases. After all, the Court today relies not on any discrimination against out-of-state nonprofits, but on the supposed discrimination against nonresident would-be recipients of charity (the nonprofits’ “customers”); .surely those individuals are similarly discriminated against in the direct distribution of state benefits. The problem, of course, is not limited to municipal employment and free public schooling, but extends also to libraries, orphanages, homeless shelters, and refuges for battered women. One could hardly explain the constitutionality of a State’s limiting its provision of these to its own residents on the theory that the State is a “market participant.” These are traditional governmental functions, far removed from commercial activity and utterly unconnected to аny genuine private market.
If, however, a State that provides social services directly may limit its largesse to its own residents, I see no reason why a State that chooses to provide some of its social services indirectly — by compensating or subsidizing private charitable providers — cannot be similarly restrictive.
It is true that the opinion in Board of Ed. of Ky. addressed only the Equal Protection and Privileges and Immunities Clauses of the Fourteenth Amendment, and not the Commerce Clause. A Commerce Clause argument was unquestionably raised by the plaintiff in error, however, in both brief, see Brief for Plaintiff in Error, D. T. 1906, No. 103, pp. 30-38, and oral argument, see
Finally, even if Maine’s property tax exemption for local charities constituted facial discrimination against out-of-state commerce, and even if its policy justification (unrelated to economic protectionism) were insufficient to survive our “virtually per se rule of invalidity,” cf. Maine v. Taylor,
* * *
As I have discussed, there are various routes by which the Court could validate the statute at issue here: on the ground that it does not constitute “facial discrimination” against interstate commerce and readily survives the Pike v. Bruce Church balancing test; on the ground that it does constitute “facial discrimination” but is supported by such traditional and important state interests that it survives scrutiny under the “virtually per se rule of invalidity”; or on the ground that there is a “domestic charity” exception (just as there is a “public utility” exception) to the negative Commerce Clause. Whichever route is selected, it seems to me that the quid pro quo exemption at issue here is such a reasonable exercise of the State’s taxing power that it is not prohibited by the Commerce Clause in the absence of congressional action. We held as much in Board of Ed. of Kg. and should not overrule that decision.
The State of Maine may have special need for a charitable-exemption limitation of the sort at issue here: Its lands and lakes are attractive to various charities of more densely populated Eastern States, which would (if the limitation did not exist) compel the taxpayers of Maine to subsidize their generosity. But the principle involved in our disapproval of Maine’s exemption limitation has broad application elsewhere. A State will be unable, for example, to exempt private schools that serve its citizens from state and local real estate taxes unless it exempts as well private schools attended predominantly or entirely by students from
I respectfully dissent.
The Court protests that “there is no 'de minimis’ defense to a charge of discriminatory taxation under the Commerce Clause,” ante, at 581, n. 15 — as though that were the point of our emphasizing in this Part II the narrowness of the challenged limitation. It is not. Rather, the point is (1) that Maine’s limitation focuses upon a particular state interest that is deserving of exemption from negative Commerce Clause invalidation, and (2) that acknowledging the principle of such an exemption (as developed in Part III below) will not place the “national market” in any peril. What the Court should have gleaned from our discussion, it did not: It persists in misdescribing the exemption we defend as “a categorical exemption of nonprofit activities from dormant Commerce Clause scrutiny.” Ante, at 588, n. 21; see also ante, at 591-592, n. 27.
The Court also makes an attempt to contest on the merits the narrowness of the exemption, suggesting a massive effect upon interstate commerce by reciting the multi-billion-dollar annual revenues of nonprofit nursing homes, child care centers, hospitals, and health maintenance organizations. See ante, at 586-587, n. 18. But of course most of the services provided by those institutions are provided locally, to local beneficiaries. (In that regard the summer camp that is the subject of the present suit is most atypical.) The record does not show the number of nonprofit nursing homes, child care centers, hospitals, and HMO’s in Maine that have been denied the charitable exemption because their property is not used “principally for the benefit of persons who are Maine residents”; but it would be a good bet that the number is zero.
I do not understand the Court’s contention, ante, at 582, and n. 16, that Fulton Corp. v. Faulkner,
In a footnote responding to this dissent, the Court does briefly address whether the statute fails the “virtually per se rule of invalidity.” It concludes that it does fail because “Maine has ample alternatives short of a facially discriminatory property tax exemption,” such as offering direct cash subsidies to parents of resident children or to camps that serve residents. Ante, at 582, n. 16. These are nonregulatory alternatives (and hence immune from negative Commerce Clause attack), but they are not
It is true, of course, that the legitimacy of a State’s subsidizing domestic commercial enterprises out of general funds does not establish the legitimacy of a State’s giving domestic commercial enterprises preferential tax treatment. See West Lynn Creamery, Inc. v. Healy,
The Court attempts to distinguish Board of Ed. of Ky. on the ground that the statute upheld in that case treated charities differently based on whether they were incorporated within the State, rather than on whether they dispensed charity within the State, see ante, at 591-592, n. 27. That is quite impossible, inasmuch as we have held that out-of-state incorporation is not a constitutional basis for discriminating between charities. And in the case that announced that holding (invalidating the denial of a property tax exemption to a nonprofit corporation incorporated in another State), we distinguished Board of Ed. of Ky. on the ground that the statute at issue there withheld the exemption “by reason of the foreign corporation’s failure or inability to benefit the State in the same measure as do domestic nonprofit corporations.” WHYY, Inc. v. Glassboro,
Dissenting Opinion
dissenting.
The tax at issue here is a tax on real estate, the quintessential asset that does not move in interstate commerce. Maine exempts from its otherwise generally applicable property tax, and thereby subsidizes, certain charitable organizations that provide the bulk of their charity to Maine’s own residents. By invalidating Maine’s tax assessment on the real property of charitable organizations primarily serving non-Maine residents, because of the tax’s alleged indirect effect on interstate commerce, the majority has essentially created a “dormant” Necessary and Proper Clause to supplement the “dormant” Commerce Clause. This move works a significant, unwarranted, and, in my view, improvident expansion in our “dormant,” or “negative,” Commerce-Clause jurisprudence.
I
The negative Commerce Clause has no basis in the text of the Constitution, makes little sense, and has proved virtually unworkable in application. See, e. g., Tyler Pipe Industries, Inc. v. Washington State Dept. of Revenue,
To cover its exercise of judicial power in an area for which there is no textual basis, the Court has historically offered two different theories in support of its negative Commerce Clause jurisprudence. The first theory posited was that the Commerce Clause itself constituted an exclusive grant of power to Congress. See, e. g., Passenger Cases,
The second theory offered to justify creation of a negative Commerce Clause is that Congress, by its silence, pre-empts state legislation. See Robbins v. Shelby County Taxing Dist.,
For example, ever since the watershed case of Erie R. Co. v. Tompkins,
The limited areas in which we have created federal com-' mon law typically involve either uniquely federal issues or the rights and responsibilities of the United States or its agents. See Texas Industries, Inc. v. Radcliff Materials, Inc.,
Similarly, even where Congress has legislated in an area subject to its authority, our pre-emption jurisprudence explicitly rejects the notion that mere congressional silence on a particular issue may be read as pre-empting state law:
“As is always the case in our pre-emption jurisprudence, where ‘federal law is said to bar state action in fields of traditional state regulation,... we have worked on the “assumption that the historic police powers of the States were not to be superseded by the Federal Act unless that was the clear and manifest purpose of Congress.” ’ ” California Div. of Labor Standards Enforcement v. Dillingham Constr. N. A., Inc.,519 U. S. 316 , 325 (1997) (citations omitted).
See also Jones v. Rath Packing Co.,
To be sure, we have overcome our reluctance to pre-empt state law in two types of situations: (1) where a state law directly conflicts with a federal law; and (2) where Congress, through extensive legislation, can be said to have pre-empted the field. See Gade v. National Solid Wastes Management Assn.,
Field pre-emption likewise is of little use in areas where Congress has failed to enter the field, and certainly does not support the general proposition of “pre-emption-by-silence” that is used to provide a veneer of legitimacy to our negative Commerce Clause forays. Furthermore, field pre-emption
In the analogous context of statutory construction, we have similarly refused to rely on congressional inaction to alter the proper construction of a pre-existing statute. See Central Bank of Denver, N. A. v. First Interstate Bank of Denver, N. A.,
In sum, neither of the Court’s proffered theoretical justifications — exclusivity or pre-emption-by-silence — currently supports our negative Commerce Clause jurisprudence, if either ever did. Despite the collapse of its theoretical foundation, I suspect we have nonetheless adhered to the negative Commerce Clause because we believed it necessary to check state measures contrary to the perceived spirit, if not
Moreover, our negative Commerce Clause jurisprudence has taken us well beyond the invalidation of obviously discriminatory taxes on interstate commerce. We have used the Clause to make policy-laden judgments that we are ill equipped and arguably unauthorized to make. See Moorman Mfg. Co. v. Bair,
“Where the statute regulates even-handedly to effectuate a legitimate local public interest, and its effects on interstate commerce are only incidental, it will be upheld unless the burden imposed on such commerce is clearly excessive in relation to the putative local benefits. Huron [Portland] Cement Co. v. Detroit,362 U. S. 440 , 443 [(1960)]. If a legitimate local purpose is found, then the question becomes one of degree. And the extent of the burden that will be tolerated will of course depend on the nature of the local interest involved, and on whether it could be promoted as well with a lesser impact on interstate activities.” Pike v. Bruce Church, Inc.,397 U. S. 137 , 142 (1970).
Any test that requires us to assess (1) whether a particular statute serves a “legitimate” local public interest; (2) whether the effects of the statute on interstate commerce are merely “incidental” or “clearly excessive in relаtion to the putative benefits”; (3) the “nature” of the local interest; and (4) whether there are alternative means of furthering the local interest that have a “lesser impact” on interstate commerce, and even then makes the question “one of degree,” surely invites us, if not compels us, to function more as legislators than as judges. See Bendix Autolite Corp. v. Midwesco Enterprises, Inc.,
Moreover, our open-ended balancing tests in this area have allowed us to reach different results based merely “on differing assessments of the force of competing analogies.” Okla
Similarly, we have in some cases rejected attempts by a State to limit use of the State’s own natural resources to that State’s residents. See, e. g., Hughes v. Oklahoma,
In my view, none of this policy-laden decisionmaking is proper. Rather, the Court should confine itself to interpreting the text of the Constitution, which itself seems to prohibit in plain terms certain of the more egregious state taxes on interstate commerce described above, see supra, at 618, and leaves to Congress the policy choices necessary for any further regulation of interstate commerce.
Article I, § 10, cl. 2, of the Constitution provides that “[n]o State shall, without the Consent of the Congress, lay any Imposts or Duties on Imports or Exports . . . To the 20th-century reader, the Clause appears only to prohibit States from levying certain kinds of taxes on goods imported from or exported to foreign nations. But a strong argument can be made that for the Constitution’s Framers and ratifiers — representatives of States which still viewed themselves as semi-independent sovereigns — the terms “imports” and “exports” encompassed not just trade with foreign nations, but trade with other States as well.
The late Professor William Crosskey, in a persuasive treatment of this subject nearly a half century ago, unearthed numerous founding-era examples in which the word “import” referred to goods produced in other States. See The True Meaning of the Imports and Exports Clause: Herein of “Interstate Trade Barriers,” in 1787,1 Politics and the Constitution in the History of the United States 295-323 (1953). Crosskey recounts, for example, that merchants frequently published advertisements in the local newspapers announcing recent shipments of such “imported” goods as “Philadelphia Flour,” “Carolina Rice,” and “Connecticut Beef.” Id., at 298.
More significantly, the early statute books are replete with examples of these commonplace 18th-century understandings of the terms “import” and “export.” The Virginia cheese-duty Act of October 1786, for example, provided for a duty of “three pence a pound on all cheese . . . imported into this commonwealth.” 12 Hening, Virginia Statutes at Large, ch. 29, § 2, p. 289 (emphasis added). As complaints published in New England newspapers indicate, that duty was imposed on cheese produced by the New England States. See Salem [Mass.] Mercury, Mar. 3, 1787, p. 2, col. 2. Moreover, the duty was but one of many imposed by Virginia, which had for some time, it seems, “imposed like duties upon the importation of New-England rum, Lynn [Mass.] Shoes, Cheese, Cordage, and a variety of other articles manufactured in the Eastern States.” Independent Chronicle [Boston], Apr. 19, 1787, p. 3, col. 2; see 11 Hening, Virginia Statutes at Large, ch. 8, §8, pp. 121-122 (Oct. 1782) (imposing a tonnage duty “on all vessels ... from or to foreign parts, or from or to any of the United States,” and an impost duty on goods “imported or brought into this commonwealth ... from any port or place whatsoever”).
In similar fashion, Connecticut adopted an excise tax that distinguished between “imported Chocolate,” taxed at three pence per pound, and “Chocolate made within this State,” taxed at one penny per pound. 1783 Conn. Acts and Laws 619. And in May 1784, Connecticut adopted an import duty that expressly applied to certain enumerated articles “imported or brought into this State, by Land or Water, from any of the United States of America.” 1784 Conn. Acts and Laws 271.
Our Civil War era decision in Woodruff v. Parham,
The Woodruff Court began with a textual argument, contending that the power to levy “imposts” given to Congress in Art. I, § 8, cl. 1, applied only to foreign imports. Such a limited reading of the word “imposts” in that Clause was necessary, the Court claimed, because any other reading would be nonsensical: Goods “imported” by one State from another State, explained the Court, would be an “export” of the State where the goods were produced or grown, and the supposed power given to Congress in Art. I, § 8, to levy an “impost” on such “imports” would be prohibited by the Art. I, § 9, provision that “[n]o Tax or Duty shall be laid on Articles exported from any State.” This apparent tension between § 8 and § 9 led the Court to believe that the word “imposts” in § 8 must be read as applying only to foreign imports in order to avoid a partial negation of the Art. I, §8, power.. The Court then extrapolated from this reading that the word “impost” in Art. I, § 10, similarly had the same limited application to foreign imports. As we have already seen, however, see supra, at 621-623, the word “import” derived its meaning from the jurisdiction into which goods were imported; consequently, it does not necessarily follow that the imports on which Congress was given the power to lay “imposts” in Art. I, § 8, were identical to the imports and exports on which the several States were prohibited from levying “Imposts or Duties” by Art. I, § 10.
The Woodruff Court bolstered its textual argument with two further arguments, neither of which appear still to be
As to the first nontextual argument, the Woodruff Court was selective in its use of history, to say the least. It first asserted that, in Articles VI and IX of the Articles of Confederation, the words “imports, exports, and imposts are used with exclusive reference to foreign trade, because [those articles] have regard only to the treaty-making power of the federation.” Id., at 134. Even if the Woodruff Court’s assertion was accurate as to Articles VI and IX, which is doubtful,
The Woodruff Court next turned to the use of the words “duty” and “import” in the Continental Congress. The Court noted that the Continental Congress recommended that the States give it permission to levy a duty of five percent on all “foreign merchandise imported into the country,” and that, though “imperfectly .... preserved,” the debates in the Congress “are full of the subject of the injustice done by the States who had good seaports, by duties levied in those ports on foreign goods designed for States who had no such ports.” Id., at 134.
There is, of course, no question that the ability of seaport States to tax the foreign imports of their neighbors was a source of discord between the States, and continued to be so through the Constitutional Convention itself. In order to support its contention, however, the Woodruff Court was obligated to show not merely that the words “duty,” “impost,” and “imports” were used in reference to foreign goods, but
The records of the Continental Congress contain numerous examples of the words “duty,” “impost,” and “import” being used with reference to interstate trade. In 1785, for example, in response to the increasing animosities between the States engendered by conflicting interstate trade regulations, an amendment to the Articles of Confederation was proposed that would have vested in the Continental Congress the power to lay “such imposts and duties upon, imports and exports, as may be necessary for the purpose” of “regulating the trade of the States, as well with foreign Nations, as with each other.” 28 Journals of the Continental Congress, Mar. 28, 1785, p. 201 (1988) (emphasis added). Two provisos within the proposed amendment further suggest thаt interstate imports and exports were very much within the purview of the amendment: First, “that the Citizens of the States shall in no instance be subjected to pay higher imposts and duties, than those imposed on the subjects of foreign powers”; and second, “that the Legislative power of the several States shall not be restrained from prohibiting the importation or exportation of any species of goods or commodities whatsoever.” Ibid.
As early as 1779, the problems posed by interstate trade barriers had become acute enough to warrant a request by the Continental Congress urging the States “to repeal all laws or other restrictions laid on the inland trade between the said states.” Resolution of Aug. 25, 1779, 14 Journals of the Continental Congress 986; id., at 996 (adopting resolution). While this particular resolution does not use the words “duties” or “imports,” it seems evident from a survey of the statutory “duties” being levied by some States on goods “imported” from other States, see supra, at 622-623, that the resolution was directed at just such duties on imports from other States.
In fact, the animosity engendered by the various duties levied on imports from other States was one of the motivating factors leading to the Annapolis Convention of 1786. See T. Powell, Vagaries and Varieties in Constitutional Interpretation 182 (1956) (“When the Framers spoke in 1787, the states were substantially sovereign, and their exercises of sovereign powers in adversely affecting trade from sister states was one of the factors leading to the Annapolis conference”). As noted by Tench Coxe, one of the Pennsylvania Commissioners appointed to attend the Convention: “Goods of the growth product and manufacture of the Other States in Union were [in several of the States] charged with high Duties upon importation into the enacting State — as great in many instances as those imposed on foreign Articles of
Similarly, one of the first criticisms leveled against the Articles of Confederation during the ensuing Federal Convention was the general Government’s inability to prevent “quarrels between states,” including those arising from the various “duties” the States imposed upon each other, both on foreign goods moving through the seaport States and on each other’s goods. See 1 Farrand 19, 25 (Edmund Randolph, May 29); see also Madison, Preface to Debates in the Convention of 1787 (draft), circa 1836, in 3 Farrand 547-548 (“Some of the States, as Connecticut, taxed imports as from Massts higher than imports even from G. B. of w[hi]ch Massts. complained to Virga. and doubtless to other States”).
While the focus of the Convention quickly moved beyond the mere abolition of trade barriers, of course, there are passages in the available Convention debates which indicate that interstate trade barriers remained a concern, and that the words of the Import-Export Clause applied to interstate, as well as to foreign, trade. George Mason, for example, proposed to exempt from the Import-Export Clause prohibition duties necessary for the States’ execution of their inspection laws. Otherwise, he argued, the “restriction on the States would prevent the incidental duties necessary for the inspection & safe-keeping of their produce, and be ruinous to the [Southern] Staple States.” 2 Farrand 588 (Sept. 12). James Madison seconded the motion, and his comment that any feared abuse of the power to levy duties on exports for inspection purposes was perhaps best guarded against by “the right in the Geni. Government to regulate trade between State & State,” id., at 588-589 (emphasis added),
These references to duties on interstate imports and exports are bolstered by several more in the ratification debates. See, e. g., 2 J. Elliot, Debates on the Federal Constitution 57-58 (2d ed. 1891) (hereinafter Elliot) (Dawes, Massachusetts ratifying convention) (“As to commerce, it is well known that the different states now pursue different systems of duties in regard to each other. By this, and for want of general laws of prohibition through the Union, we have not secured even our own domestic traffic that passes from state to state” (original emphasis deleted)). Indeed, one of the principal Anti-Federalist complaints against the new Constitution was that States were prohibited from laying any duties or imposts on imports or exports, a prohibition that, in their view, left only direct taxation as a means for the States to support their own governments. See, e. g., Brutus 1, Oct. 18, 1787, in 13 Documentary History of the Ratification of the Constitution 415 (J. Kaminsky & G. Sala-dino eds. 1981) (hereinafter Doc. Hist.) (“No state can ... lay any duties, or imposts, on imports, or exports .... [T]he only mean therefore left, for any state to support its government and discharge its debts, is by direct taxation”).
Justice Nelson, of course, pointed out in his Woodruff dissent that a lack of “security or protection” against “obstructions and interruptions of commerce among the States” was “one of the principal grievances that led to the Convention of 1787, and to the adoption of the Federal Constitution.”
The second contention that the Woodruff Court used to bolster its textual argument was a policy concern based on an unnecessarily broad view of the Import-Export Clause’s prohibition. The Woodruff Court believed that the prohibition on “Duties or Imposts on Exports or Imports” exempted imported articles, and the merchants who traded in them, from state taxation of any kind, at least so long as they remained in their original packages. Id., at 137. This view of the Clause’s prohibition would result in “the grossest injustice,” said the Court, were the Clause to be read as applying to “articles brought from one State into another,” for “[n]either the State nor the city which protects [the import merchant’s] life and property [could] make him contribute a dollar to support its government.” Ibid.
There is nothing else of consequence to support the Wood-ruff Court’s holding. The only remaining argument made by the Woodruff majority was that it was “improbable” that the Convention would have permitted States to tax “imports” from other States merely with the assent of Congress, because the revenues that would accrue to Congress by granting such assent would prove too great a temptation for Congress to serve as a neutral arbiter regarding such taxes. Woodruff, supra, at 133. The Woodruff Court’s speculation was without historical support, however, and pales in comparison to the substantial evidence described above regard
In short, there is little in the Woodruff opinion to sustain its holding, and its weakness is even more evident given the contrary precedent rejected by the Woodruff Court. In Brown v. Maryland,
Chief Justice Marshall’s statement in Brown was merely dicta, of course, but the Woodruff majority’s rejection of the precedential force of Almy, based solely on its assertion that “[i]t seems to have escaped the attention of counsel on both sides, and of the Chief Justice who delivered the opinion,
In sum, it would seem that Woodruff was, in all likelihood, wrongly decided. Of course, much of what the Import-Export Clause appears to have been designed to protect against has since been addressed under the negative Commerce Clause. As the majority recognizes, discriminatory state taxation of interstate commerce is one of the core pieces of our negative Commerce Clause jurisprudence. Ante, at 581. Were it simply a matter of invalidating state laws under one Clause of the Constitution rather than another, I might be inclined to leave well enough alone. Indeed, our rule that state taxes that discriminate against interstate commerce are virtually per se invalid under the negative Commerce Clause may well approximate the apparent prohibition of the Import-Export Clause itself. But, as already described, without the proper textual roots, our negative Commerce Clause has gone far afield of its core — and we have yet to articulate either a coherent rationale for permitting the courts effectively to legislate in this field, or a workable test for assessing which state laws pass negative Commerce Clause muster. Precedent as unworkable as our negative Commerce Clause jurisprudence has become is simply not' entitled to the weight of stare decisis. See Holder
III
Were we thus to shed ourselves of our nontextual negative Commerce Clause and all the accompanying multifactor balancing tests we have employed, and instead merely apply what appears to me to be the relevant provision of the Constitution, this would seem to be a fairly straightforward case (although I reserve final judgment of the matter for a case when the Import-Export Clause is specifically addressed by the parties). Unlike the Export Clause of Art. I, §9, which prohibits the Congress from levying any tax on exports, the Import-Export Clause only prohibits States from levying “duties” and “imposts.” See International Business Machines,
The Maine property tax at issue here is almost certainly not an impost, for, as 18th-century usage of the word indicates, an impost was a tax levied on goods at the time of importation. See, e. g., The Observer-No. XII, Connecticut Courant and Weekly Intelligencer, Jan. 7, 1790, p. 1, col. 2 (“[Ijmpost is a tax on merchandize, payable at the port of entry”);
“Duty,” however, though frequently used like “impost” to denote “money paid for custom of goods,” An Universal Etymоlogical English Dictionary, supra, does not appear to have been limited to taxes assessed at portside. See, e. g., S. Johnson, A Dictionary of the English Language (7th ed. 1785) (“Duty . . . Tax; impost; custom; toll. All the wines make their way through several duties and taxes, before they reach the port” (second emphasis added)); 2 Elliot 331 (John Williams, New York ratifying convention) (noting that Congress’ Art. I, § 8, power “extend[s] to duties on all kinds of goods, to tonnage and poundage of vessels, to duties on written instruments, newspapers, almanacs, &c”). In fact, “imposts” seems to have been viewed as a particular subclass of duties; the fact that the two words are used disjunctively in the Import-Export Clause suggests, therefore, that something broader than portside customs was within the constitutional prohibition.
Because of the somewhat ambiguous usage of the words “duty” and “impost,” Luther Martin inquired of their meaning during the Convention. James Wilson, a member of the
It is important to note, moreover, that the Martin-Wilson colloquy is in reference to the Art. I, §8, power given to Congress to levy duties. That power is broader than the prohibition on States found in Art. I, § 10, which reaches not all duties, but only those on “imports or exports.”
The tax at issue here is nothing more than a tax on real property. Such taxes were classified as “direct” taxes at the time of the framing, and were not within the class of “indirect” taxes encompassed by the common understanding of the word “duties.” The amount of the Maine tax is tied to the value of the real property on which it is imposed, not to any particular goods, and not even to the number of campers served. It does not appear, therefore, to be a “duty” on “imports” in any sense of the words.
Although the terms “dormant” and “negative” have often been used interchangeably to describe our jurisprudence in this area, I believe “negative” is the more appropriate term. See Oklahoma Tax Comm’n v. Jefferson Lines, Inc.,
See, e. g., C & A Carbone, Inc. v. Clarkstown,
See, e. g., Wardair Canada Inc. v. Florida Dept. of Revenue,
Scholarly commentary, too, has been critical of our negative Commerce Clause jurisprudence. See D. Currie, The Constitution in the Supreme Court: The First Hundred Years 1789-1888, p. 234 (1985) (describing the negative Commerce Clause as “arbitrary, conelusory, and irreconcilable with the constitutional text”); see also, e. g., L. Tribe, American Constitu
See also Mayor of New York v. Miln,
See also F. Frankfurter, The Commerce Clause Under Marshall; Taney and Waite 13 (1937) (“The conception that the mere grant of the commerce power to Congress dislodged state power finds no expression” in the records of the Philadelphia Convention nor the discussions preceding ratification); id., at 17-19 (noting that Chief Justice Marshall’s discussion of the “exclusiveness” doctrine in Gibbons v. Ogden,
The majority’s assertion that James Madison viewed what we have termed the “negative” aspect of the Commerce Clause as more significant than its positive aspects, see ante, at 571, n. 7, is based on a letter written by Madison more than 40 years after the Convention, see 3 The Records of the Federal Convention of 1787, p. 478 (M. Farrand ed. 1911) (hereinafter Farrand) (reprinting letter from James Madison to J. C. Cabell, Feb. 13,
See also ante, at 572 (“Congress unquestionably has the power to repudiate or substantially modify th[e] course of [our negative Commerce Clause] adjudication”); Southern Pacific Co. v. Arizona ex rel. Sullivan,
See also Atherton v. FDIC,
See also Gazette of the State of Georgia, Oct. 11,1787, p. 3, col. 3 (“Just imported ... Superfine Philadelphia flour”); Newport [R. L] Mercury, June 12, 1784, p. 4, col. 2 (“Just imported . . . Burlington [New Jersey] and Carolina, Pork, in Barrels”); ibid. (“Just imported . , . best Philadelphia Flour”); South Carolina Weekly Gazette, Sept. 13, 1783, p. 3, col. 2 (“Just imported, In the Sloop Rosana, . . . from Rhode-Island, . . . Potatoes, Apples, Onions by the bunch and bushel, Beats, Carrots, and good warranted Cheese”); Columbian Herald [Charleston, S. C.], Nov. 26,1787, p. 4, col. 4 (“Just imported, From Philadelphia, ... Dr. Martin’s Celebrated Medicine for Cancers, Ulcers, Wens, Scurvies, Tetters, Ringworms, &c.”); Newport Mercury, July 31, 1786, p. 2, col. 2 (complaining that “last year upwards of 700,000 bushels of corn were imported into [South Carolina] from North Carolina and Virginia”); Columbian Herald, Feb. 14,1785, p. 2,
Some commentators have argued that the phrase “imported or brought” suggests that Connecticut lawmakers intended to distinguish between foreign goods “imported” and other States’ goods “brought” into the State. This supposed distinction between “imported” and “brought” is not consistent with the remainder of the statute, however. For example, the second paragraph of the Act uses the phrase “brought or imported into this State” when referring exclusively to items “that are not the Growth, Produce, or Manufacture of the United States.” 1784 Conn. Acts and Laws 271. And conversely, “imported” is used alone in contexts where it plainly covers goods produced in other States. See, e. g., id., at 309 (setting duty for sugar, “whether the Produce or Manufacture of the United States, or not, imported into this State”); ef. 1786 Md. Laws, ch. 17, §6 (setting standards for “all beef and pork barrels brought to, or imported into, Baltimore-town, from any part of this state”). The more plausible view, therefore, is that the words “brought” and “imported” are
Even assuming that the word “impоst” in the two Clauses applied to the same class of “imports,” there is nothing nonsensical in reading “impost” in Art. I, §8, as applicable to interstate as well as foreign trade. It is frequently the case that a broad grant of power in one Clause is restricted by another Clause. Moreover, a State could also import goods from a federal territory, and the congressional power to lay an impost on such (nonforeign) trade would not run afoul of the Art. I, § 9, prohibition.
Article VI, § 3, merely provided that “[n]o State shall lay any imposts or duties, which may interfere with any stipulations in treaties, entered into by the United States in Congress assembled.” 1 Stat. 5. And Article IX provided: “The United States, in Congress assembled, shall have the sole and exclusive right and power of. . . entering into treaties and alliances, provided that no treaty of commerce shall be made, whereby the legislative power of the respective States shall be restrained from imposing such imposts and duties on foreigners, as their own people are subjected to, or from prohibiting the exportation or importation of any species of goods or commodities whatsoever. ...” 1 Stat. 6. As should be evident, neither Article requires a reading of “impost” as applicable exclusively to foreign imports. The better reading is that when the States levied imposts in their individual capacities, they could not interfere with treaties enacted by the States in their collective capacity. In fact, the two provisions, read together, suggest the existence of much broader classes of “imposts,” “imports,” and “exports,” and that only the subclass of imposts interfering with foreign trade might be prohibited. The absence of this very qualifier in the later enacted Import-Export Clause creates a negative inference that the unqualified constitutional language covered more than did the limited prohibition in the Articles of Confederation.
Indeed, some New Englanders apparently believed that the Virginia duty on New England cheese, see supra, at 622, was contrary to Article IV’s provision that “no imposition, duties or restriction, shall be laid by any State, on the property of the United States, or either of them.” 1 Stat. 4. See Salem [Mass.] Mercury, Mar. 3, 1787. The general view of the Clause, however, and certainly the view of the several States that imposed duties on interstate trade, see supra, at 622-623, was that it applied only to goods actually owned by the States, not to goods grown or manufactured within them. See Salem [Mass.] Mercury, Mar. 3, 1787 (“[T]he proper construction of that part of the Articles of Confederation is, that no state in the union shall lay a tax on publick property imported therein — for, be it remembered, Congress were, at the time the Confederation was formed, exporters of almost every necessary for carrying on the war, & the clause alluded to was intended to prevent any individual state from laying a duty on those necessary suрplies”); see also 12 Hening, Virginia Statutes at Large, ch. 40, § 3, pp. 304-305 (Oct. 1786) (distinguishing between articles “which are the property of the United States, or either of them,” and articles “which shall be proved to be of the growth, produce or manufacture of the State from which they shall be imported”).
Furthermore, in response to concerns that the inspection exemption might be used merely as a pretext for taxing neighboring States, see 2 Farrand 589, Mason’s proposal was further amended to make any such State inspection laws “subject to the revision and controul of Congress,” id,., at 607, 624. The need for, and existence of, this further limitation on the States’ authority to tax imports’ and exports suggests that the Commerce Clause power itself, referred to by Madison, would not operate to limit the States of its own accord. See supra, at 613-614, n. 7.
See also John Quincy Adams to William Cranch, Oct. 14, 1787, in 14 Doc. Hist. 222 (“How will it be possible for each particular State to pay its debts, when the power of laying imposts or duties, on imports or exports, shall be taken from them — By direct taxes, it may be said”); George Lee Turberville to James Madison, Dec. 11, 1787, in id., at 407 (“Why shou’d the states be prevented from raising a Revenue by Duties or
Farrand did not publish his volumes until 1911 (although the Woodruff Court did have available to it Madison’s notes, as well as the more perfunctory convention journal); Burnett’s Letters were published between 1921 and 1936; the Journals of the Continental Congress were published between 1904 and 1937; volume 9 of The Papers of James Madison, in which Tench Coxe’s letter was first reprinted, was not published until 1975; and a useful, readily accessible collection of the various Anti-Federalist writings was not available until 1981. This is not to say.that the original documents reprinted in these volumes would not have been available to the Woodruff Court. But our ready access to, as well as our appreciation of, such documents has increased over time.
Indeed, were I similarly to speculate, I would not find it “improbable” that the Convention would have trusted Congress to serve as a referee between individual States. Since many States would necessarily be harmed by a single State’s impost, the institutional checks would in all likelihood be sufficient to counter any revenue “temptation”' Congress might have faced, especially given the extensive revenue authority granted directly to Congress in Art. I, §8, cl. 1. My “speculation” is at least consistent with the recorded Convention debates. Roger Sherman proposed the requirement that аny revenues raised by congressionally approved state imposts go into the federal treasury not as a separate means of raising national revenues, but to ensure that the States not use a protectionist impost as a pretext for raising revenues from other States. See 2 Farrand 441-442 (Aug. 28).
See also Providence Gazette and Country Journal, Feb. 13, 1790, p. 1, col. 1 (reprinting same); Gazette of the United States, Jan. 9, 1790, p. 2, col. 1 (same).
See also T. Sheridan, A Complete Dictionary of the English Language (6th ed. 1796) (“Impost ... A tax; a toll; custom paid”); S. Johnson, A Dictionary of the English Language (7th ed. 1785) (“Impost. A tax; a toll; a custom paid. Taxes and imposts upon merchants do seldom good to the
See, e. g., DeWitt, Letter To the Free Citizens of the Commonwealth of Massachusetts, American Herald, Boston, Oct.-Dec. 1787, in 4 Storing 23 (noting that Congress “shall have the exclusive power of imposts and the duties on imports and exports, [and, implicitly, a concurrent] power of laying excises and other duties” (emphasis added)); Letters from The Federal Farmer, Oct. 10, 1787, in 2 Storing 239 (distinguishing between “impost duties, which are laid on imported goods [and] may usually be collected in a few seaport towns,” and “internal taxes, [such] as poll and land taxes, excises, duties on all written instruments, etc. [which] may fix themselves on every person and species of property in the community”); Essays of Brutus, Dec. 13, 1787 in 2 Storing 392-393 (same); see also 2 Farrand 589 (noting that Morris “did not consider the dollar per Hhd laid on Tobo, in Virga. as a duty on exportation, as no drawback would be allowed on Tobo, taken out of the Warehouse for internal consumption”).
Even were I to agree with the majority that a particular property tax may be a property tax in name only, see ante, at 574-575, and even were I to assume that travel across state lines to consume services in another State renders those traveling consumers “imports,” it is difficult to characterize the tax at issue here as a duty on imports. It is, rather, as the majority recognizes, a “generally applicable state property tax.” Ante, at 567. Maine’s grant of an exemption from the tax to some charitable organizations that dispense their charity primarily to Maine residents makes the tax something less than universal, but it does not make the tax, even in practical effect, one that is levied exclusively, or even primarily, on imports. See, e. g., New Energy Co. of Ind. v. Limbach,