Continental Trailways, Inc. v. Director, Division of Motor Vehicles

TRAILWAYS, INC., CONTINENTAL INCORPORATED UNDER THE DELAWARE, THE LAWS OF STATE OF PLAINTIFF-RESPON- DENT, DIRECTOR, VEHICLES, OF DIVISION DE- MOTOR FENDANT-APPELLANT. Argued November May 1985 Decided 1986. General, argued Deputy Wheelwright, L. Attorney Martin Kimmelman, Attorney Gener (Irwin I. appellant for the cause Ciancia, Attor Assistant J. attorney; James Jersey, al of counsel). General, of ney respondent. cause argued the

Joseph T. Wilkins delivered the Court opinion GARIBALDI, J. primary issue in this case is whether the autobus excise imposed under N.J.S.A. 48:4-20 discriminates inter- state commerce violation of the commerce clause of the Const, 1, 8, cl. 3. If the Constitution, art. § States

United unconstitutional, as to secondary issue arises a tax is excise Trailways, Inc. Continental plaintiff-respondent, whether the Tax Court and refund. Both right to a (Continental), has tax was unconstitu- that the excise Division held Appellate case involves Because this a refund. and ordered tional of the Unit- arising under the Constitution question substantial Director, Division States, defendant-appellant, ed right matter of to this (Director), appealed as a Motor Vehicles Court. I provision, 48:4-20,

The autobus excise tax origi- N.J.S.A. 1934, 1934, nally enacted in L. c. 68. Its forerunner was enacted (L.1927, 184), in accompanied by c. following the statement purpose: of highways This bill an excise on the use of imposes State motor by carrying passengers vehicles used for or for hire in interstate com property just merce. The is to such vehicles to their bear share of purpose compel nothing At taxation. the time such vehicles to the State of New present pay registration the Jersey, fees for under the Motor Vehicle except Act, provided operating subject while other vehicles within the State are to taxation. wholly right engaged such a tax on such vehicles in impose interstate commerce courts, has been in Inc. the Federal [quoted Trails, recently upheld Safeway by (1964),

v. Furman, N.J. dismissed, 379 85 appeal (1964).] 13 L.Ed.2d purpose require of the statute therefore was to inter- pay privilege using highways, state buses to for the of state in compensate effect to the State for their share of the cost of constructing maintaining highways the and of administer- ing Trails, Furman, Safeway the motor vehicle laws. Inc. 41 N.J. issue, by

The version of N.J.S.A. 48:4-20 at as amended L. 1972, 211, 2, 31, 1972, c. effective retains December essential- § ly purpose. the same It reads: operating owning or an autobus which is over operated Every person carrying passengers highway state for the of a point in this purpose from the or outside state, to another outside point outside the state point from state within the to a the within state to a state, point point shall to the outside the state Director of Division of Motor point pay highway, an excise for of such cent for Vehicles, as the use ½ each mile or highways fraction been thereof such autobus shall have over operated mileage this no excise shall be traversed in state, payable except for regular passenger operating under route service conferred provided authority added.) (Emphasis 48:4-3. E.S. pursuant Thus, 48:4-20 still exacts an excise tax for each mile N.J.S.A. (bus) operations highways Jersey of New in of autobus1 tax, transport passengers. connection with the interstate No however, mileage payable regular- for intrastate traversed ly-scheduled passenger provided authority under the service (P.U.C.).2 the Public Utilities Commission undisputed. major The facts are Continental is a common- providing by carrier bus both interstate intrastate service route) (regular operations means of regular-route-passenger through operations wholly-owned and charter subsidiaries. During issue, period November to June provided were under operations Continental’s author- ity (I.C.C.) by conferred the Interstate Commerce Commission operations provided authority and its under intrastate were approval P.U.C. conferred the P.U.C. Continental also held with provided conjunction for intrastate service it I.C.C.- approved interstate routes. filed month- Continental prior June years

For several payment Director with returns ly business-excise-tax re- In those 48:4-20. N.J.S.A. imposed under the excise of the total on the basis computed its Continental ports, 48:4-3, is defined in used in both N.J.S.A. 48:4-20 N.J.S.A. 1 "Autobus," as highways or over as motorbus public public places N.J.S.A. 48:4-1 operated passengers business, for hire in intrastate this State for the of in transportation notwithstanding interstate commerce. such also be used in bus engaged or partially wholly that no bus 2 N.J.S.A. operation 48:4-3 provides securing without run in New Jersey or shall intrastate commerce operated (P.U.C.). The Board of Commissioners the Board Public Utility of approval under Public Utilities the Board of became Public Commissioners of Utility 11, 1977. 5.1, c. effective L.1977, 146, § 52:27F-6, July NJ.S.A. Jersey. of exempt number miles traversed New It did not Jersey regular from its calculation New miles traversed in authority route service under the P.U.C. November 1979, when Continental realized that it had not excluded this exempt mileage, a claim it filed for refund. The Division of (D.M.V.) Vehicles Motor advised Continental that no refund was permitted, overpayment but that its could be used to offset following future taxes in the three months the end of the applicable tax month. Continental then filed a complaint with 9, 1980, seeking $55,392.64. the Tax Court on June refund of During period made, for which the refund claim was Trails, Safeway Inc., plaintiffs wholly-owned one subsidiar- ies, into, operated through, seven interstate routes and out of Jersey. Trails, New For Safeway each the routes Inc. held operating authority I.C.C. for the interstate service well as approval Hence, P.U.C. for the intrastate service. Continental held necessary authority provided P.U.C. whenever it bus passenger strictly points Jersey. service between within New However, whenever passenger the bus service related transport passengers only points between outside this State points Jersey, within only points or between outside this State and no Jersey points, included service to New Conti- approval. nental held I.C.C.

Continental concedes its charter miles3 are taxable. The Director concedes that scheduled intrastate miles for which authority (i) point-to-point there is P.U.C. either Jersey in New exclusively as an trip, (ii) intrastate point-to-point in New part Jersey as trip an interstate are not taxable. conflict between parties specifically concerns the tax to be 3 The Tax defined charter to constitute service operations groups of lease charter or buses and drivers for patrons transportation designated group certain locations for a fixed Continen price per trip. tal v. Motor Div. Vehicles N.J.Tax at Trailways Director, imposed under miles, N.J.S.A. 48:4-20 on interstate for which (1) there authority is I.C.C. point either from a in Jersey New point versa, Jersey (ii) outside New point or vice from one Jersey outside New point to another Jersey, outside New with mileage Jersey by traversed going through the state. alleges D.M.V. mileage that such is taxable. Continental con- taxing tends that mileage such is an unconstitutional burden on interstate commerce.4 Tax Court held that the imposed by excise tax N.J.S.A. miles,

48:4-20 on interstate “complementa- the absence of a ry” miles, tax on intrastate unconstitutionally discriminated against commerce violation of the commerce clause, and was therefore void. It also ordered the D.M.V. to repay “all paid bus excise taxes from November 1977 to June 1979, except ... taxes on Appellate charter bus miles.” The Division affirmed the Tax Court’s determination that the stat- unconstitutionally commerce, ute burdened interstate but vacat- ed the order to refund the taxes with Retaining interest. jurisdiction, it remanded the case to the Tax Court so that the parties agree could on the method and terms of a credit for the overpaid parties taxes. When the advised the Tax that a Court impractical, credit was pay the Tax Court ordered D.M.V. to refund, together Appellate with interest. The Division af- order, judgment firmed the N.J.Super. affirm the 257. We Appellate Division insofar as it holds that N.J.S.A. 48:4-20 unconstitutionally discriminates interstate com- merce, but reverse insofar as it orders a refund. argued trial, 4 At Continental also the tax was a denial of the equal clause of the fourteenth amendment. The Tax held that protection "[I]n view of the determination reached on the nature of the tax in discriminatory Clause,

violation of the Commerce it is not to deal with necessary plaintiff’s argument.” Continental did protection not raise the equal equal protection argument in the briefs that it submitted to the Division or to this Appellate Instead, Court. it chose to on the lower court that focused rely opinions on the commerce clause.

II In we held the earlier version of the excise tax5 on interstate bus service to be constitutional because there was a complementary tax Trails, on intrastate service. Safeway Inc. Furman, v. 41 N.J. 467

In Safeway, plaintiff-bus company also argued that excise tax mileage by traveled unlawfully buses However, burdened interstate commerce. part of the then- statutory existent scheme intrastate carriers were also taxed for the use of the highways. Legislature had enacted 48:4-14, imposed N.J.S.A. a gross receipts of “3% ... monthly franchise tax for revenues for upon the use of streets” operators. intrastate In proof the absence of the inter- state excise tax resulted in a heavier financial burden than the tax, intrastate excise we held the latter tax did not discriminate interstate commerce.6 The Court concluded that a tax decided, Safeway 5 When virtually was N.J.S.A. 48:4-20 was identical to its present version. It read as follows: Every person owning operating operated or an autobus which is over highway purpose carrying passengers point this State for the of from a State, point outside the State to point another outside the or from a outside State, point point State to a within the or from a within the State to a point pay outside the State shall to the Director of the Division of Motor Vehicles, highway, as an excise for the use of such cent for each mile lA operated fraction thereof highways such autobus shall have been over the State, except of payable this that no mileage excise shall be traversed for any municipality operator paid to which such monthly owner or has provisions the use its streets under the section 48:4—14 franchise of of this Title. language represents Legislature’s The italicized changes above in N.J.S.A. Safeway 48:4-20 from the time when was decided and to the version of the statute at issue in this case. Supreme previously 6 The recognized importance comple mentary Corp. Blodgett, taxes. In Interstate Buses 273 U.S. 48 S.Ct. (1928), imposed L.Ed. 551 a Connecticut statute a tax of one cent for each highway mile of traversed a motor vehicle used in interstate commerce. challenged by The tax company engaged Connecticut bus in interstate England commerce between Connecticut and other New states. Connecticut imposed companies engaged also a tax on all transportation in intrastate bus levied on interstate commerce is not discriminatory, merely form, because the tax differs in or adopts a different measure assessment, imposed from that on intrastate carriers. Id. 489. 1972, however, the complementary gross receipts tax

imposed on intrastate carriers under N.J.S.A. 48:4-14 was re- pealed, 31, 1972, L.1972, effective December c. 6. As § part legislation, N.J.S.A. 48:4-14 was amended to its present exempt “mileage form to regular traversed in route passenger provided operating service under authority conferred pursuant to R.S. 48:4-3” and to delete gross reference to the L.1972, receipts tax. c. 2. The entire legislative pack- § age was introduced in Senate Bill No. purpose 1151. The of the legislation, as set in forth the Statement to Senate Bill was as follows: purpose companies provide regular

The of this bill is to assist bus route Jersey bus service to New residents. [M]any companies of these past have suffered serious financial losses in the years. potential companies apply few The for loss has forced these for rate present increases and curtailment of services. Mindful only that increased rates and curtailment of service will worsen the picture regular companies financial for route bus because it will force bus patrons transportation, repeals parts to seek other this bill revises and statutory companies pay, law to reduce the taxes and other fees which these thereby relieving part public transportation of the financial burden of these companies. oriented bill, Through Legislature this complementa- removed the ry commerce, tax on thereby providing intrastate an indirect carriers, subsidy to intrastate attempt in an to ameliorate their plight serious financial in complementary 1972.7 No tax has percent gross receipts, three of their less certain limited deductions. The Supreme upholding comple- Court in the statute held that the two taxes "are mentary only in the sense that ... one affects interstate and the other intrastate commerce.” 273 U.S. at 48 S.Ct. at 72 L.Ed. at 554. problems facing private companies providing 7 Serious bus bus intrastate transportation recognized early were as as 1966 when the former Commuter Operating Agency Department Transportation in L. established operation of buses in intrastate com- reimposed been recapitulate, To we therefore have then. merce since mileage: and intrastate following tax interstate treatment operators imposed upon tax is bus excise 1. bus authority regular-route point- under service P.U.C. provide who trip. Jersey exclusively an is in New intrastate Nor to-point operators, imposed upon they interstate whether be the tax out-of-state, mileage point-to- traversed domestic part trip. Jersey, as of an interstate point within New tax, however, imposed upon excise is both domestic 2. The mileage operators for all other and out-of-state bus Jersey. mileage solely New This is traversed within traversed Jersey, involving point point trips one New to a outside involving point Jersey Jersey, or outside New another New Jersey by point traveling through this state. For outside New operator has an example, if an interstate interstate run from operator Philadelphia Jersey day, times a four Jersey subject to the for all the traversed New miles. However, trips stops if these new two of four include Jersey City at Trenton and which P.U.C. has authorized that picked up discharged Jersey, passengers within New corresponding exempt miles the tax.8 then the are (N.J.S.A. £.1979, 27:1A-16(a), 28). repealed by c. 15-27 ¶ c. 150 ¶ Operating Agency report suggested responses other in its Commuter Responses." Hughes, to then-Governor “Buses: Crisis and 27, 1985, 48:4-20, sixty 8 OnJune an amendment to N.J.S.A. to take effect L.1985, enactment, days following approved. c. 207. amended, provide existing person owning a this bill amends law to As regular exempt operating route commuter service shall be interstate bus mileage per currently paid tax on from the one-half cent mile excise addition, Jersey highways. on New In bus carrier under traversed Jersey county a with or under contract with for contract Transit transportation subject Jersey special rural to New Transit shall also be bus law, exempt. existing regular Under bus service and New intra-State route Revenue, Jersey exempt bus excise [Senate Transit are from the tax. Statement, Appropriations and Senate No. 13 1 —L. Finance Committee 207.] c. 13985

535 III per se invalid it burdens because A state tax is not Transit, Brady, Inc. v. Complete Auto commerce. interstate (1977). 51 L.Ed.2d 1076, A state 279, U.S. S.Ct. 326 274, 430 97 that use carriers upon interstate may impose a reasonable tax against does not discriminate highways long its as that tax so Brice, 339 Lines v. Capital Greyhound interstate commerce. Trails, (1950); Safeway 94 L.Ed. U.S. S.Ct. 806, 1053 Furman, (1964). Inc. v. N.J. Transit, Inc., Supreme Complete Auto United States

In validity of a tax measure the four-part forth a test to Court set concluded The Court challenge. against a commerce clause per unconstitutionally se burden does not that a state nexus with (1) a sufficient commerce if: there is interstate activities to local state; (2) fairly apportioned taxing the tax is placed on the being multiple burdens and does not result (3) taxpayer; not discriminate the tax does and to the services commerce; (4) fairly related and the tax is taxpayer. taxing state to provided by benefits four, two, one, requirements The excise tax meets number case is in this they primary are not at issue.9 The issue By history. legislative exemption is set forth in No reason for the "regular service from exempting commuter bus route from the bus-excise tax State, point a outside point point or from outside the within the State to a State,” exacerbates point the amendment within the State to regular providing discriminatory carriers interstate bus effect of the Act on subject tax. operations, to the excise route which remain taxed when the Supreme nexus exists that an obvious 9 The Court has noted Department v. Association activity Revenue within the state. is conducted 734, 750, Cos., 55 L.Ed.2d Washington Stevedoring U.S. imposed miles traversed at issue is The excise tax addition, apportionment Jersey highways. solely Jersey in New over New apportionment of an mileage among [bases] is the "reasonable based on highways.” Capital Grey upon use the interstate carriers which excise tax Brice, 70 S.Ct. 94 L.Ed. 1053. There is Lines hound activity. multiple same allegation taxation of the no here that the tax results fairly highways the services Finally, related to an excise tax to maintain 536 taxing against

three: scheme discriminates whether Conti- companies nental and similar interstate bus violation of the commerce clause.10 clause, force, protects

The commerce of its own free Hardesty, 638, the states. Armco Inc. v. U.S. among trade 467 —, 2620, 2622, 540, 81 L.Ed.2d (1984); S.Ct. Boston 104 545 Comm’n, 318, 328, Stock Exch. v. Tax 429 U.S. State S.Ct. 97 Hewit, 599, 514, 606, (1977); 50 L.Ed.2d Freeman v. 523 329 249, 274, 276, 265, U.S. 91 L.Ed. 252, S.Ct. 271-72 aspect protection “may One of this is that a state not discrimi nate between transactions on the basis some interstate Exch., Stock 12, at element.” Boston 332 n. S.Ct. at 608 n. 50 L.Ed.2d at 12, n. 12. A tax does not if discriminate interstate commerce it does not favor disadvantage local interests to the of interstate business.11 See benefits, roadways, provides use of the that the State this case Capital Brice, Greyhound 544, 70 bus carriers. Lines v. atU.S. 807, 1055; Trails, at Safeway Furman, 94 L.Ed. at Inc. v. 141N.J. at 486-87. argument discriminatory, 10 Weaddress D.M.V.’s that even tax is if the it is per se unconstitutional. See at 543. infra 1886, Supreme spoken 11 TheU.S. has issue. As far back as often on this Supreme Court stated: discriminating imposed by disadvantage A operating a State to the products of other States when into the first introduced mentioned State, is, effect, States, regulation among in restraint of commerce usurpation power by and as such is a conferred the Constitution upon Congress [Walling Michigan, of the United States. 116 U.S. 446, 455, 454, 457, 691, (1886).] 6 S.Ct. 29 L.Ed. Walling Court feared that discrimination interfere would with interstate id., preventing "uniformity regulation,” interfering commerce with power granted Congress. 459, Id. at 6 S.Ct. at 29 L.Ed. at 695. In Seelig, (1934), in Baldwin v. 294 U.S. 55 S.Ct. 79 L.Ed. 1032 Act, Court held prices that the New York Milk Control set minimum paid by producers, milk dealers to was an unconstitutional burden on case, interstate commerce. at Id. 55 S.Ct. at 79 L.Ed. 1036. In that rejected expressly proposition competí- Justice Cardozo that obstructions to id.; Minnesota, Northwestern States Co. v. Portland Cement 450, 458, 357, 362, 421, 358 U.S. 79 3 S.Ct. L.Ed.2d 427 cases, Supreme In recent the United States struck has industry down state tax statutes aid local with taxes that impose greater on occurring par burdens commercial activities tially outside the state than on similar occurring activities solely Louisiana, 725, within the Maryland state. v. 451 U.S. 2114, (Louisiana (1981) 101 S.Ct. 68 L.Ed.2d 576 “first-use” tax natural gas brought unconstitutionally into the state dis commerce.); criminates against interstate Boston Stock Exch. Comm’n, 318, v. State 599, Tax 429 U.S. 97 50 S.Ct. L.Ed.2d (1977) (New York stock transfer tax that imposed a higher tax on stock transfers when sale occurred outside of unconstitutionally against the state discriminates interstate commerce.); 388, Westinghouse Corp. Tully, Elec. v. 466 U.S. 404, 1856, 1866, 388, (1984) (credit 104 S.Ct. 80 L.Ed.2d against York gross receipts New franchise tax for received exports shipped regular place from a of business within York against commerce.); discriminates interstate Armco v. Hardesty, 368, 2620, Inc. 467 U.S. 104 S.Ct. 81 L.Ed.2d 540 (1977) (West Virginia gross receipts tax for wholesale sales by against made local manufacturers discriminates interstate commerce.); 263, Imports, Dias, Bacchus Ltd. v. (1984)(Hawaii 82 L.Ed.2d 200 liquor S.Ct. tax unconstitu tionally commerce.). against discriminates Louisiana, Maryland 451 U.S. S.Ct. 68 L.Ed.2d the Court held that Louisiana’s “first- imposed brought use” tax—which a tax into gas on natural giving state while exemptions local users a series of “unquestiona credits—violated commerce clause because bly interstate commerce favor of local discriminate[d] interests.” at at Id. 68 L.Ed.2d 602. justified tion between states be as measures to assure the economic health local industry. itself, First, gas from outer of the tax provisions under purposes within Louisi- to be used certain continental shelf through pass exempted, gas but the same ana was state, in other competitive used users in order states, Second, given under Louisi- certain credits was not. gas natural encouraging ana’s severance tax had the effect gas miner- producing outer shelf to invest continental owners Louisiana, rather than exploration development al within development, or in further outer continental shelf invest statutes production Finally, various Louisiana in other states. of outer substantially and consumers protected Louisiana users tax, gas impact the but outer continental shelf from this gas moving out of state did not receive continental shelf 2134-35, 756-58, at protection. at 101 at 68 L.Ed.2d Id. S.Ct. 602-03. hearings might that further though

The Court noted even the of required provide precise a determination of extent discrimination, reason to declare it was an insufficient to wait unequal the not know how the tax unconstitutional. “We need unconstitutionally it concluding that discrimi- tax before 760, 2136, 68 at 604. nates.” Id. at 101 at L.Ed.2d S.Ct. Comm’n, Similarly, in v. Tax Boston Stock Exch. State 599, (1977), 318, 514 97 50 L.Ed.2d Court 429 U.S. S.Ct. higher tax imposed a that a found New York stock transfer tax York on transfers when the sale occurred outside New stock involving a the State State than on stock transfers sale within Court noted: to be unconstitutional. The discriminato- Clause out-of-state businesses from protects any [Commerce] tax is now on their commerce activities. Even if the not burden ry residents’ refusal to trade on out-of-state ex- the sole cause of York exchange changes, at choice of an in-state least it reinforces their very selling inhibiting an is an force to inhibition is unconstitution- out-of-state; flow al barrier the free of commerce. at S.Ct. at 609 at 334 n. 97 n. L.Ed.2d 527 n. [Id. 13, 13.] 50 13, Moreover, that it did not “hold that a State the Court stated may compete with states for a share of interstate other commerce____” pro- It hold continued: “We prod- discriminatorily no competition cess State

539 ucts manufactured or the operations performed business 337, other State.”12 Id. at at S.Ct. L.Ed.2d at 529. case, In Imports, Dias, the most recent Bacchus Ltd. v. (1984), Supreme L.Ed.2d held that liquor Hawaii tax unconstitutionally dis- against criminated interstate commerce. The tax was enacted defray in 1939 to police the increased costs of and other resulting consumption services from the increased liquor. —, Id. S.Ct. at 82 L.Ed.2d at originally 205. As drafted, imposed liquor the tax was on all sold in In Hawaii. attempt encourage in an liquor the local industry, Legislature granted Hawaii exemption Okolehao, a tax brandy indigenuous plants. distilled from granted it exemption similar for fruit wine. Id. key question for the Court was how much effect on

competition must a tax have before violates the commerce language Westinghouse 12 This was restated in Corp. Tally, Elec. where the Supreme Court held that the credit the New York franchise tax for gross receipts exports shipped received regular place from a of business discriminatory within New York was because the credit benefitted local com disadvantage competing exports merce to the shipped from other states. In State, Westinghouse D.M.V., like contended that even if the tax was discriminatory placed the burden that it on interstate commerce was not of significance. argued constitutional It that the credit was not intended to divert York, activity prevent new into New but to activity the loss of economic in the sought classify State. The State subsidy." tax credit "as an indirect 12, 12, U.S. at 1856 n. 104 S.Ct. at 388 n. 80 L.Ed.2d at 388 n. 12. The Court rejected arguments all of these Armco, Hardesty, Inc. v. Supreme again language Court cited the from holding Boston Stock Exch. in exemption that Virginia’s gross an in West receipts tax for wholesale sales made local manufacturers discriminated against competing out-of-state manufacturers who made wholesale sales in Virginia. major West argument The State’s in that case was that the tax did manufacturer, not discriminate although because the exempt local from the tax, gross-receipts paid higher still manufacturing a much tax. The Court held that the complementary two taxes were not and added that a "state not tax a heavily transaction or incident more when it crosses state lines than when it entirely 638, —, occurs within the State.” 467 U.S. 104 S.Ct. L.Ed.2d not that the tax was major contention clause. Hawaii’s compete with liquors did not the local discriminatory because posed by argument A similar products. the out-of-state nondiscriminatory be- here, tax is that the bus excise D.M.V. (inter- goods the taxed competition between there is no cause (intrastate mileage). exempted bus mileage) and those bus state also 207. Hawaii —, 82 L.Ed.2d at at at S.Ct. Id. constituted pineapple and wine Okolehao argued that because Hawaii, they posed liquor total sales percent one less than produced elsewhere liquors to other competitive threat “no in Hawaii.” Id. consumed arguments. It of these Supreme rejected both Court local sales of the small volume of that neither the

found not exempted liquors did fact that beverages nor the liquors to other deter- “competitive threat” present a constitute locally-produced existed between competition mined whether Instead, found beverages. the Court and out-of-state competition. such Id. only to the extent of factors went those at 208. The Court —, 82 L.Ed.2d at at S.Ct. competition between long as there is some concluded that “as non-exempt products exempt products locally-produced discriminatory Id. at State, effect.” there is a outside the added). (emphasis at 209 —, 82 L.Ed.2d that the Court three other reasons contended for Hawaii also approach to its case. and flexible practical a more should take objec- legitimate state First, liquor tax advanced because Second, patently discriminate the tax did because tives. third, the effect of And because against interstate commerce. conclud- incidental. Hawaii commerce was the tax on interstate by simple economic is motivated legislation ed that when invalidity. strict rule of there be a protectionism should arguments and found rejected these Supreme protection- “economic did in fact constitute liquor excise tax discriminatory purpose and ism,” it had both because Legis- from the it discerned The former discriminatory effect. industry. to the Hawaiian lature’s stated intent aid fruit-wine that tax liquor exemp The latter it inferred from the fact applied only locally-produced beverages. Consequently, tion any competition locally-produced if there were between exempt products expensive products, and the nonexempt more —, then a discriminatory there was effect. Id. at 104 S. atCt. 3056, 82 at 209. The concluded even if L.Ed.2d that legislature’s original promote ailing intent an local industry than to rather discriminate interstate com merce, would constituting imper this still not save a —, protectionism. Id. at missible economic at S. Ct. 82 L.Ed. 2d at 210.

These cases recent establish the commerce clause prohibits discriminatory tax that has the of giving effect industry advantage local a commercial over its out-of-state impermissible competition. advantage could in the form through of lower a tax exemption, Imports, costs as in Bacchus in the form of increased business, taxes on interstate as in Exchange, Boston Stock an incentive to invest in intrastate rather than enterprises, interstate inas Maryland Louisiana, v. or in the form of an subsidy indirect through a credit as in Westinghouse Corp. Elec. v. Tully, 466 atU.S. 104S.Ct.at 1866,80 at 401. L.Ed.2d There is no need to unequal “know how the Tax is concluding before unconstitutionally discrimi nates.” Maryland Louisiana, U.S. at 101 S. Ct. at 68 L.Ed.2d 604. long And as as there is any discrimina tion between intrastate and products, interstate there is a dis criminatory effect.

IY case, that the Applying principles these this we hold imposes bus excise tax an unconstitutional burden on D.M.V., the bus recognized by commerce. As whether operation imposed on out-of-state, the excise tax is is local Jersey mileage Jersey highways the use of the New when trip. It is strictly interstate with a conjunction in is traversed the tax activity occasions character the interstate taxpayer is a Likewise, whether the intrastate incidents. Jersey carrier, New use of an out-of-state or local business transportation of a tax when result in highways not does point Jersey to another point in New one passengers is from Jersey. New against interstate

Thus, discriminates on its face the tax tax does Nevertheless, that the contends D.M.Y. commerce. by asking this conclusion not so reaches discriminate. D.M.V. actually or effect “whether or has the the tax was intended to, creating interstate potentially a barrier handicapping, if not In answer- competing commerce in favor of local businesses.” ing history of question, legislative this D.M.V. that the states receipts tax does amendment to excise tax and the reflect competition intent to interstate bus restrict or promote carriers inter- protectionism economic for local In support position, ests. this argues D.M.V. first that tax effect, excise does not discriminatory have a for both domestic foreign companies equally. are treated Since the exemption applies to regularly-scheduled service bus be- points in Jersey, tween provided by whether it is a New Jersey company foreign corporation, or a D.M.V. claims there is no local favoritism. find contention to question

We D.M.V.’s be meritless. The is discriminatory whether there is a effect on interstate com- If merce. a tax otherwise discriminates interstate commerce, engage entities that it is irrelevant whether business interstate commerce are domestic or out-of-state. however, here, argument, is that unlike major

D.M.V.’s decisions, is Supreme there and the other recent Bacchus and interstate bus competition in fact no between intrastate regular-route passenger ser- argues that local service. D.M.V. vice, operators or interstate provided by intrastate whether exclusively operators, significantly different argument For a transportation services. This is unrealistic. riding rider an interstate bus confronted with the choice (as run City part carrier and Atlantic of its between Newark taking an City), between New York and Atlantic intrastate City, and Atlantic bus that travels between Newark companies engaged are in the interstate and intrastate bus As public transportation. same the same provide business choice, competition long as the rider has that there is between and pineapple interstate service. Like and intrastate bus wine scotch, competes with intrastate inevitably interstate bus travel overlap. bus service of their routes whenever discriminatory, Lastly, D.M.Y. contends that even if the is inter per is not the burden on se unconstitutional because outweighed by promot state commerce is the state interest position ing passenger local its bus service. It bolsters regu citation to number of where a statute cases hold public inter evenhandedly legitimate lates local to effectuate incidental, it only its is est and effect on interstate commerce is upheld imposed on commerce will be burden such unless the Pike clearly putative local benefits. excessive relation to the 137, 142, 25 Church, Inc., v. 90 Bruce 397 S.Ct. U.S. v. (1970); Commerce L.Ed. 2d 178 Chamber U.S.A. of County State, (1985); v. Gloucester 162 Glassboro N.J. Freeholders, 100 N.J. Bd. Chosen of as follows: approach Brennan Justice summarized determining inter- general the burden imposed whether Under rule [of (1) challenged whether must state commerce is we permissible] inquire regulates interstate effects on “incidental” statute with evenhandedly or in against either on its face commerce or discriminates interstate commerce, legitimate (2) and, local serves a purpose; whether statute effect; practical well (3) this local purpose means could so, promote if whether alternative discriminating to show against The burden interstate commerce. without but challenging the statute, rests the validity discrimination on the party falls the burden demonstrated, commerce ... discrimination “[w]hen flowing justify local benefits on the State to it both terms alternatives non-discriminatory adequate and the statute unavailability the local interests at stake.” preserve [Hughes Oklahoma, L.Ed.2d 322, 336, 1727, 1736, (citations (1979) omitted).] essence, D.M.V. submits that even if the bus excise tax burden, subsidy constitutes a the indirect provided by the exemption outweighs for intrastate service far the inconven- expense ience and added to interstate carriers such as Continen- paying tal of their fair share of the maintaining state’s cost of improving roadways. Legislature’s While the intent to support intrastate bus service laudatory, the result is that the maintaining highways burden of administering laws, motor vehicle providing as well as an subsidy indirect companies, intrastate bus disproportionately now falls on intra- state commerce.

We addressed a similar issue in Roadway Express, Inc. v. Director, Taxation, (1967), Div. 50 N.J. 471 where we held imposition that the Jersey’s Corporation of New Business Tax trucking company on a conducting exclusively an interstate involving business properties substantial and activities in New Jersey did not violate the commerce clause. We held that the tax, fairly apportioned which was between intrastate and inter- commerce, state was a nondiscriminatory requiring means of pay commerce to its fair share of the cost of state government. If the tax was apply held not to to interstate businesses, that burden would paid solely have been by intra- state businesses. The facts in present this case a variant of those in Roadway. placed Here the solely burdens are interstate commerce any without compensatory burdens im- posed on intrastate commerce. imposition of the burdens solely on either intrastate or interstate businesses results in a violation of the commerce clause.

Moreover, the State has not demonstrated the lack of nondis- criminatory alternatives. For example, subsidy a direct to intrastate carriers from supplied by state funds all citizens might accomplish the same result an subsidy indirect fi- solely by nanced the imposition of the bus-excise tax on inter- state commerce. tax, 48:4—

Accordingly, we hold that the bus-excise N.J.S.A. in violation of the against interstate commerce discriminates also clause. We need not decide whether it violates commerce equal protection clause. the

V however, must, determine whether Continental is We pursuant for the excise entitled a refund to N.J.S.A. 48:4-20 paid from November 1977 to June 1979.13 it had not Continental realized that November when exempt tra- monthly reports mileage from its the excluded a regular-route Jersey, filed refund versed service New $55,392.64. This miles in amount covered claim those filed period 1977 to June 1979. Continental November pursuant to the State its the Division of Taxation claim with Law, to -5. Tax Uniform Procedure N.J.S.A. 54:48-1 D.M.V., refund to of Taxation forwarded claim for Division con- tax did not that bus-excise advised Continental However, D.M.V. authorizing a refund. provision tain 13:18-7.7, pursuant to N.J.A.C. further advised Continental future taxes in an be used offset overpayment of taxes applicable tax month. following the end of the three months -55, Act, 48:4-1 to does not contain The Autobuses N.J.S.A. 48:4- refunds. And neither N.J.S.A. provision dealing with tax (L. 136), (L. (the c. predecessors nor its 198) (L. 1962, versions) the word 68) c. contains c. granting the Director any language expressly “refund” or refunds or credits. regulation regarding power promulgate it is entitled to contended that trial for the first time 13 Continental its brief 48:4-14, under N.J.S.A. all since January a refund for taxes paid tax) (the was repealed, effective date NJ.S.A. 48:4-14 complementary refund, its complaint, miles. In its claim for for taxes on charter paid except to taxes limited paid claim was order, however, Continental’s and the pretrial November 1977 to June 1979. provisions Continental contends the Tax State Law, :52-4, Uniform Procedure to apply N.J.S.A. 54:48-1 to its Specifically, refund claim.14 Continental relies on N.J.S.A. 54:49-14, provides: which Any taxpayer, any years payment any original time within two after the of him, by or additional tax assessed unless shorter limit is fixed the law tax, imposing may refund, the the file with a claim commissioner under oath for may prescribe, stating grounds therefor, such form as the commissioner required permitted respect

but no claim for refund shall be or to filed with to paid, protest proceed- a tax after has been filed with or commissioner after ings appeal provided subtitle, on have been commenced as in this until such protest finally appeal has been determined. Law, however, The State Tax Procedure defines tax” “State “any payable by as tax which is to or collectible tax state commissioner, and tax any ‘state law’ means which tax levies or imposes a state tax as herein defined.” N.J.S.A. 54:48-2. Therefore, correctly D.M.V. contends that the State Tax Uni- form applicable Procedure Act to Continental’s claim because the “payable bus-excise tax is not by to or collectible the state tax payable commissioner” but to Director of D.M.V., pursuant to 48:4-21.15 N.J.S.A. purpose

14 The of the State Tax Uniform Procedure Act is provide procedure by far as feasible a uniform to be followed taxpayers any in relation state taxes and to afford uniform remedies procedures which be resorted to the state in the collection of of its [N.J.S.A. taxes. 54:48-3.] provides: 15 N.J.S.A.48:4-21 Monthly report mileage; payment of of Every operator such owner or shall file with the Director Division twenty-fifth day report, Motor Vehicleson or before the of each month a oath, prescribe, report under such form as the shall director shall operated disclose the number of miles such autobus shall been have so month, highways during preceding over the of this State calendar together registration with number such vehicle and such other may require. information as the director Every person pay upon filing report such shall the director such person report. the amount of tax due from such as disclosed in the [Emphasis added.] provision Instead, applicable refund that the D.M.V. asserts 13:18-7.7, is which states: N.J.A.C. tax; liability.

Overpayment of credit future upon upon taxpayer’s report his examination of records If of the or examination due, may paid excess that in excess of that such it is tax was determined following applicable applied against tax in the three months the end due tax month. provision pur- was promulgated that this credit D.M.V. claims 48:4-24, general gives the Director suant N.J.S.A. may regulations “rules and as he deem power promulgate necessary.” statutory his Tax Court held that Director exceeded granted authority promulgating N.J.A. 13:18-7.7. It Conti- C. years nental a refund limited to two based on Continental’s pre-1977 in the com- failure to claim reimbursement for taxes legislative expressed plaint pretrial and order and intent Act, 54:48-1. The State Tax Uniform Procedure N.J.S.A. Division, Appellate point, af- without discussion on opinion entitled to firmed the Tax Court's that Continental was a refund. specific statutory authority requiring no a refund of

There is tax under There bus-excise due N.J.S.A. 48:4-20.17 provides: 16 N.J.S.A. 48:4-24 payment enforce the The Director of the Division of Motor Vehicles shall hereby imposed purpose and enforce such excise and for such make necessary. may require regulations a bond and as he deem He rules penalties imposed by surety payment of excise and other for payable pursuant this Title and for 48:4-20 to 48:4-34 of to sections regula- compliance provisions the rules with the of said sections and by pursuant him hereto. tions made provides specifically refunds motor fuels-use for 17 N.J.S.A. 54:39A-19 Legislature indicating intended to if the administered D.M.V. 48:4-20, have done provide paid it could under N.J.S.A. for excise taxes refunds so. regulation Legislature 13:17-7.7.18 The N.J.A.C. could have provided governed by refunds of excise tax be the State reason, Uniform Act. Procedure For whatever it has failed appears do so. While reasonable that the State Uniform govern tax, Procedure Act should refunds of the excise we Legislature. leave that determination to the policy discourages suits Public for the refund of taxes erroneously paid illegally or collected. Governments are enti presume are tled to that statutes constitutional. Government budgets prepared on are an annual cash basis. Lavin v. Educ., (1982). Therefore, Hackensack Bd. 90 N.J. of in statutory the absence of a limitation time in on the which a taxpayer unconstitutional, file may govern suit to declare tax subject ments to would be substantial liabilities from refunds of Accordingly, those the unconstitutional taxes. in absence of statutory authority, voluntarily, taxes although erroneously, paid an even under unconstitutional statute cannot be refunded. Berry Daigle, (Me.1974); v. 322 A. 2d 326-27 72 Am.Jur. 2d ¶ 1074, State and Local Taxation long general It been has the that common-law rule where a fact, duress, party, fraud, extortion, without mistake of voluntarily pays money on a demand that is not enforcible him, he not recover it. In re Fees State Bd. of of (1980); Dentistry, 84 N.J. Koewing Orange, v. West (E. A.1916); Green, N.J.L. 539 & Camden 54 N.J.L. (E. A.1892); & Restatement Restitution comment f § of (1937).19 most recently We addressed this issue in In re party Accordingly, 18 Neither contends that N.J.A.C. 13:17-7.7 is invalid. we holding need not and do address the Court’s the Director Tax that authority promulgating regulation. D.M.V. his exceeded the Green, (E. 19 In A.1892), Camden v. 54 N.J.L. 593 & Court held that a the party paid liquor shortly County who for a $500 license after the Board of paid voluntarily License $300 Commissioners had lowered the fee to fee the knowledge change. apparently paid because he had full of the fee He also the protest. fee without con- That case Dentistry, Bd. 84 N.J. 582. Fees State statute, 45:1-3.2, that interpretation of N.J.S.A. the cerned Dentistry power promulgate rules granted to the Board examinations, and other “charges for licensures setting the authority impose fees given The Board services.” Id. Promptly defray expenses. necessary proper its were enacted, Jersey Dental schedule was after fee being excessive. Association challenged it as Association pending judicial fees review. stay of the revised not seek a did excessive, fees but that the were Appellate Division held at 587. a refund. Id. efforts to obtain rejected Association’s between refund difference ordered the Board to We during the expenses actual and the Board’s fees collected period question. 586. Id. at Jersey law New we noted case Dentistry, Board of already collected is a tax principle that when

established “the decision, assumption law raises an judicial aside ‘the set ” honestly retained.’ money longer can no refund omitted). primary (citations recognized We Id. principle as the aforementioned “volunteer exception to this pay the in that did not We found that the dentists ease rule.” no “The have had voluntarily under duress. dentists fee but they registration the fee if were continue pay but choice addition, the legally.” profession Id. 589. practice their of the the after the enactment promptly challenged fee dentists fee schedule. this in case Continental there is no evidence

We conclude in by its act protest, evidenced duress or paid the tax under due, as well that was tax under the statute paying both the Here, we unconstitutional. today declare the tax that we law.20 under a mistake of paying a tax typical taxpayer a have is later a statute that that a tax under in his dissent states paid 20 Justice Stein of law. Voluntary mistake is not under unconstitutional paid declared imposing valid, it even law was in the belief that the tax made payment mistake is under a unconstitutional, to be tax later declared paid the where repeal the complementary Since of the statute in Conti- reports nental filed monthly with in it the D.M.V. which includ- mileage ed all the Jersey. it accumulated in New As states complaint, its “[u]pon discovery mileage report- mistaken overpayment tax, claim, ed and Plaintiff filed a refund etc.” erroneously law, monthly reports, Continental mistook the filed regularly paid prescribed by the taxes as 48:4-21. N.J.S.A. questioned It payments never tax until 1979. It November certainly pay did not them protest. under

We conclude that Continental is not entitled to refund. Legislature provide did not erroneously for a refund of mistakenly-paid taxes; voluntarily bus-excise and Continental paid years the contested amounts for seven under a mistake of law. modified,

As judgment Appellate Division af- firmed.

STEIN, J., dissenting part.

I in full agreement am majority’s with the conclusion that the tax, 48:4-20, autobus excise N.J.S.A. in- discriminates terstate commerce in violation of the Commerce Clause. I cannot, however, agree majority’s with the conclusion that Continental is not entitled to a refund.

Preliminarily, majority distinguish paid fails to the taxes by transport Continental connection with the interstate passengers, today unconstitutional, holds to be mistakenly paid by the taxes Continental for intrastate mileage regularly passenger traversed in scheduled service provided authority According under the the of the PUC. to the majority, paid Continental was a volunteer that its tax “under a However, paid mistake of law.” at 549. Ante Continental under a mistake of law was tax on intrastate law, thereby recovery paid. precluding Berry Daigle, of of the amount v. 322 A. (Me.1974); Taxation, 2d 72 AmJur.2d State and Local 1087. ¶ by As mileage approved over the PUC. R.S. 48:4-3. routes noted, Continental’s taxes were Tax Court the balance of by they rather were mandated paid mistakenly not but because (1983). Had failed to Continental the statute. N.J. Tax mileage, today, it the tax on which we invalidate pay registration its to subject have been to revocation of would As Jersey. in New N.J.S.A. 48:4-30. we operate autobuses Dentistry, in re 84 N.J. noted Fees State Bd. of of (1980), payment a tax that the of is well-established 589-90 “[i]t * * * right payor’s to continue in order to avoid the loss involuntary and removes it payment renders business majority’s applica the ambit the volunteer rule.” of to tax on interstate rule” the excise tion of “volunteer misplaced.1 obviously is transportation passengers of acknowledges, noted Board Dentist- majority As the we of already “that a tax collected principle the established when ry decision, to judicial assumption raises an aside ‘the law is set longer honestly can no retained.’ money refund the which right money taxing particle ‘not a entity has ‘according principles taxpayer to the question,’ which is due ” omitted). (citations That honesty.’ of common Id. today holds plainly applies to the tax which the Court doctrine to be unconstitutional. rule,”

However, majority “volunteer on which even the refund, ques- is of deny entire claim for relies to Continental’s mistakenly by paid application to the excise taxes tionable Procedure to the Tax Uniform Pursuant State Continental. 52-4, Law, provide as a statute enacted “to N.J.S.A. 54:48-1 by taxpayers followed procedure to be far as feasible a uniform support majority for its is able to muster conclusion 1 The showing Maine, protest provides without law of that "[m]ere common property preserve person does purpose to avoid arrest of seizure (Me.1974) Berry Daigle, right paid.” A.2d to recover taxes omitted). Jersey (citations See with New law. decision is not consistent This Dentistry; State 84 N.J. 589-90 In re Fees Bd. taxes,” any 54:48-3, relation to state N.J.S.A. the volunteer appears superseded. rule to provides N.J.S.A. 54:49-16 follows: Where no of fact or law are involved and it questions from the appears records of the illegally Commissioner that monies have been any or erroneously or have collected from or other been any taxpayer paid by any person or other under a mistake taxpayer person the law, Commissioner of fact at time, within two unless a shorter limit years payment, is fixed by imposing making writing

the law tax, record upon his reasons therefor, to the certify is entitled to such comptroller taxpayer refund shall authorize the thereupon thereof comptroller payment for such appropriation purpose. [Emphasis added.] statutory provision This legislative makes clear that intent was to authorize the paid by refund of taxes taxpayers even under a mistake of fact or law.

The State Tax Uniform Procedure appear Law would to settle the matter of Continental’s claim for a respect refund with both the tax mistakenly paid and the tax on passen- ger transport which the Court holds to be unconstitutional. However, majority points out that the State Tax Uniform Procedure Law only applies to payable a tax “which is to or commissioner,” collectible the state 54:48-2, N.J.S.A. whose subsequently duties were transferred to the Director of the Division of Taxation. N.J.S.A. majority 52:27B-48. The concludes that question since the taxes in payable are to the Director of the Division of Motor Vehicles rather than to the Taxation, Director of the Division of the State Tax Uniform Procedure Law and its provisions refund inapplicable. are

I find interpretation this of the statute to be too restrictive. As the Tax Court appropriately pointed out, “[tjhere is no distinguish reason to among paid taxes to the State of New Jersey on the basis of which government division of state is the payee.” 6 N.J. Tax 59. Such a construction of the statute is unreasonable, and we legislative should not distort the intent by so a reading. literal The Tax Court also observed that the State Tax Uniform imposes Procedure two-year Law limita tion on paid refunds of taxes Division of Taxation and concluded that the same apply limitation should to refunds of I paid Motor Vehicles. Id. find the Division of taxes unassailable. Tax on this issue to be reasoning of the portion from that Accordingly, respectfully I dissent for a claim refund. majority opinion denies Continental’s joins opinion. Justice CLIFFORD this O’HERN, J., dissenting. tax today Jersey’s

The excise on bus strikes down 48:4-20, concluding that the tax unconstitu- operations, N.J.S.A. tionally against cer- interstate commerce because discriminates they granted exemption tain an from the if carriers are Jersey’s to New commuters and provide an instate service intercity I that bus service and travelers. Because believe substantially equivalent are taxable commuter service not events, is no out-of-state and there direct discrimination business, I operators engage in same believe the who by majori- compel the result reached Constitution does ty- Congress simply provides Commerce Clause “[t]he * * * * * * among regulate shall have Power Commerce [t]o * * I, 8, Const, art. sec. cl. 3.

the several States U.S. Congress, the clause Although grant power as a to stated of in on states even imposing has been read as some limitations See, by City Philadel Congress. e.g., of action absence of 2531, 2535, 617, 623, 57 Jersey, v. 437 98 S.Ct. phia New U.S. regulation (1978) potential (subjects 2d of federal L.Ed. 481 congressional open to control escaped attention “are have imposed long restraints they so as act within the States itself”). by the Clause Commerce power Congress to implications grant of negative ” “ ‘silent,’ ‘negative,’ ‘dormant.’ to have been referred Rest, Eule, 91 Yale Laying the Dormant Clause Commerce (1982). interprets this dormant n. 1 When a court L.J. 425 will, occasion, Clause, invalidate aspect of it the Commerce commerce; should not into a court unwarranted state intrusion so, public in the however, merely it to be do because believes 554 policy Congress

interest to determine where has not. The of transportation policy establishment or tax for state is government. Airlines, the other branches of Northwest Cf. Minnesota, 292, 302, 950, 955, v. Inc. 64 88 L.Ed. (1944) (Black, J., (“The concurring) Constitution gives [Congress] the power regulate among commerce states, and until it I think acts we should enter the with field caution”). extreme Our constitutional traditions have been “ similar. ‘To declare a statute judicial unconstitutional is a ” power delicately to be exercised.’ Harvey v. Board Cho sen Freeholders County, (1959) Essex 30 N.J. (quoting Hendrickson, (Ch. v. Wilentz 133 N.J.Eq. 1943), (E. aff'd, N.J.Eq. A.1944)). 244 & legislative A act should not be void declared its repugnancy “unless beyond constitution is clear reasonable Gangemi doubt.” Berry, I dispel N.J. cannot that reasonable doubt this case and therefore must dissent. opinion

The majority prevalent reflects a formalism once analysis of state taxation interstate commerce. But Complete Transit, 274, Auto Brady, Inc. v. 430 97 U.S. S.Ct. 1076, (1977), 51 326 Supreme L.Ed.2d the United States Court “ altogether abandoned magic ‘the use of words labels’ [that] ” could ‘disable an levy’ otherwise constitutional and recognized they longer that 284-89, no an analytic served function. Id. at 1081-1084, 97 S.Ct. at 51 L.Ed.2d (quoting Railway at 334-37 Express Agency 434, 441, 411, v. Virginia, 358 79 U.S. S.Ct. 416, 450, 3 (1959)). L.Ed.2d 456 commerce bemay “[interstate pay way.” 284, made to its 430 1081, U.S. at 97 at 51 S.Ct. L.Ed.2d at 334. The away Court shifted its focus from labels question to the produces “whether the tax a forbidden 288, 1083, effect.” Id. at 97 S.Ct. at 51 L.Ed.2d at 337. Having replaced reality, formalisms with economic the Court developed simpler, a straightforward more approach on based analysis an of the effects of the a tax: tax will be sustained against a Commerce Clause challenge applies when tax an activity with a state, substantial with taxing nexus is

555 com against interstate fairly apportioned, does not discriminate merce, provided fairly related to the services and is 1082-84, 285-89, 51 L.Ed.2d at 335-37. 97 at state. Id. S.Ct. looks, sounds, that it and reads problem with this tax is discriminatory. It understandable then for is is like one that since, discriminatory that this tax is majority to conclude However, duty to look face, so. our is appears its considering whether tax deeper appearance. than When competition, the flow of discriminatory purposes for the of the transac- is measured in terms of the nature commerce involved, legal not in abstractions. tions Supreme of the United States Recognizing that the decisions way precise guides to the states had left little taxation, indispensable powers of Justice the exercise of their emerge, how quagmire “From the there Clark once observed: ever, peaks unquestioned. remain firm of decision which some ** * [may long doctrine that State It has been established com discriminates impose a tax which not] * * * advantage to by providing a direct commercial merce ** Cement *.” Northwestern States Portland local business 357, 362, Minnesota, 450, 458, 3 79 L.Ed. v. 358 S.Ct. Co. U.S. missing from this aspect simply I find that 2d transportation engaged in bus Jersey A New business case. Trailways. compete gets with break on routes no differing taxpay not the inquiry is whether or relevant Mary “substantially equivalent engaged in ers are event[s].” 725, 759, Louisiana, U.S. land Exchange v. (1981). In Boston Stock State L.Ed.2d (1977), Comm’n, 50 L.Ed.2d 97 S.Ct. Tax transfer York stock defect the New the Court found the fatal i.e., transaction, of securities sale the same be that York, subjected in New or delivered would be transferred whether on the differing consequences tax basis 332, at 97 of state. Id. place in state or out transaction took identical. 608, commodity was 50 at 526. at L.Ed.2d S.Ct. 556 plain

It was to the that New York had created a tax granting a advantage direct commercial to local businesses. Id. However, at 50 at 525. S.Ct. L.Ed.2d when the different, may transactions are a different tax imposed. See, 204-05, Maid, e.g., Alaska v. Arctic U.S. S. Ct. 929, 932, (no (1961) 6 L.Ed. 2d discrimination tax where operation ships greater of freezer is than tax on local fish processors since the competitive). businesses are not beyond appearance try

We must upon then look to focus the commercial event that involved here. I am certain that standing the commuter at a roadside Plains Scotch would Trailways fail to see through that bus that roars the commu nity on its route Miami engaged between and Boston is not the same company provides public business as a bus transportation point from that point to another within the really question commuter shed. There should be no in the minds majority intercity entirely of the bus service is an commodity distinct from commuter bus service. See Salorio Glaser, 447, 459, denied, 93 N.J. cert. (1983) within, (comparing journeys L.Ed.2d 682 to work

from, modes). essence, and to New all Jersey, In the Court now holds that the commodity, State cannot tax this a discrete aspect commerce, of interstate unless it taxes a different com modity, intrastate or commuter bus service. While case might discrimination particular be made in circumstances when transportation products analyzed, primary are facial effect is not discriminatory rationally because it distinguishes products. between

In analysis, the last the issue given is whether the state has something something ask for return. service, case of commuter bus the benefits to the are state eased, transportation self-evident. Not is a crisis but air-pollution problems energy-consumption problems are delivery addressed of the local bus service. same holds true for intrastate bus services essential to the New Hence, public important purposes, which Jersey job market. intercity transportation, are served not related to bus are intracity or commuter service. provision of under the Commerce Clause The of discrimination essence Tax Exchange in Boston Stock State expressed thus Comm’n, supra: structuring their does not States today prevent Our decision encourage growth commerce and of intrastate development

systems with other States for Nor we hold that a State may do compete industry. of a such lies at the heart free trade of interstate commerce; competition share in of no State diserimi- may hold the process competition We only policy. in business manufactured or the operations performed tax the natorily products other State. 50 L.Ed.2d at 97 S.Ct. at U.S. 528-29.] at 336-37, [429 in domain state and national relationship intricate between The v. San Antonio was outlined Garcia the field of mass transit —, Auth., 469 105 S.Ct. Metropolitan Transit There, supporting the federal interest L.Ed.2d considering important factor was an mass transit urban —, 105 Id. at regulate wages in that area. Congress’ power to however, issue, 1019-1020, at 1036-37. at L.Ed.2d S.Ct. here, not, power, and sweep Congress’ was the —, 105 Id. at the Commerce Clause. negative restraints of the essential- 1020-1021, Given at 1037-38. L.Ed.2d function, nega- sovereign transportation to a state’s ity of directly is not Clause aspect or dormant Commerce tive regulates the commercial It the state is when relevant. that it private citizens advantage of its for the market bal- against economic policy to offend the constitutional found kanization. lead analysis could sum, only formalistic I believe discriminatory. unconstitutionally conclusion that this tax Jersey private interest since no New excise tax furthers same nonresident deliverers

treats resident both important public an rationally related to equally and is service purpose. The Constitution require does not the invalidation this tax. For —Chief Justice WILENTZ, and affirmance modified POLLOCK,

Justices HANDLER and GARIBALDI-4. For CLIFFORD and STEIN-2. affirmance —Justices For reversal—Justice CLIFFORD-1.

Case Details

Case Name: Continental Trailways, Inc. v. Director, Division of Motor Vehicles

Court Name: Supreme Court of New Jersey

Date Published: May 27, 1986

Citation: 509 A.2d 769

Court Abbreviation: N.J.