DIRECTV and DISH NETWORK, Appellants, v. UTAH STATE TAX COMMISSION, Appellee.
No. 20130742
SUPREME COURT OF THE STATE OF UTAH
December 14, 2015
2015 UT 93
The Honorable Samuel D. McVey
On Direct Appeal
Fourth District, Utah County
No. 110402039
Attorneys:
Michael L. Larsen, Cory D. Sinclair, Salt Lake City, E. Joshua Rosenkranz, Jeremy N. Kudon, Nicholas G. Green, New York City, Eric A. Shumsky, Washington D.C., for appellants
Sean D. Reyes, Att‘y Gen., Bridget K. Romano, Solicitor Gen., Michelle A. Alig, Laron J. Lind, Asst. Att‘ys Gen., Salt Lake City, for appellee
ASSOCIATE CHIEF JUSTICE LEE authored the opinion of the Court, in which CHIEF JUSTICE DURRANT, JUSTICE DURHAM, and JUSTICE HIMONAS joined.
ASSOCIATE CHIEF JUSTICE LEE, opinion of the Court:
¶1 In this case we consider a constitutional challenge to Utah‘s pay-TV sales tax scheme. The scheme provides a sales tax credit for “an amount equal to 50%” of the franchise fees paid by pay-TV providers to local municipalities for use of their public rights-of-way. Not all pay-TV providers pay franchise fees, however. Cable providers employ a business model that triggers franchise fees (and, by extension, the tax credit); satellite providers use a different model that triggers no such fees (or credit). The satellite providers filed suit, asserting that Utah‘s tax scheme unconstitutionally favors local economic interests at the expense of interstate commerce. In this challenge, the satellite providers assert claims under the dormant Commerce Clause of the U.S. Constitution and the Uniform Operation of Laws Clause of the Utah Constitution.
¶2 The district court dismissed these claims on a motion for judgment on the pleadings. We affirm. We hold that Utah‘s pay-TV tax credit survives dormant commerce scrutiny because it does not discriminate in favor of a business or activity with a distinct geographic connection to Utah. We also hold that the tax credit survives rational basis scrutiny under the Uniform Operation of Laws Clause.
I. BACKGROUND
¶3 Pay-TV programming is delivered in one of two main ways—by cable or satellite.1 Cable providers employ a network of wires run underground or on utility poles. The programming content is assembled at “headend” facilities, of which there are several in Utah, from which it is sent through a network of underground or overhead cables. Subscribers access the transmitted programming through a cable “droр” line that runs to their homes.
¶4 The infrastructure necessary to deliver cable programming to Utah subscribers requires substantial investment in the local economy. Cable providers invest millions of dollars in Utah and
¶5 Satellite providers avoid many of these infrastructure costs by delivering TV programming directly to subscribers. Under the satellite TV business model, satellite providers shoulder a different set of expenses—those associated with building, launching, and maintaining orbital satellites. There is a tradeoff for the astronomical costs associated with satellites: The investment in satellites allows the satellite providers to avoid the infrastructure costs that burden their cable competitors. Once the orbital satellite is in operation, the providers assemble programming content at various “uplink” centers across the country (of which there are none in Utah). And once the programming package is assembled, it is transmitted to the satellites, which then transmit it directly to subscribers’ homes. Subscribers access the programming through a small satellite dish installed on the exterior of their home, which receives and processes the content. Thus, satellite providers do not lay a single foot of local cable. They accordingly avoid the costs associated with building and operating headends and installing and maintaining cables. Their only local connection is to pay independent contractors to install and maintain satellites on people‘s homes.
¶6 Satellite providers also avoid the payment of local franchise fees. To the extent franchise fees are seen as a payment for the right of way for running cable, the exemption from franchise fees is a natural outgrowth of the business model. But the exemption from local franchise fees is also assured by federal law. Under the
¶8 Two satellite providers, DIRECTV and DISH Network, challenged this tax credit. Their complaint alleged that the credit runs afoul of the Commerce Clause and Equal Protection Clause of the U.S. Constitution and the Uniform Operation of Laws Clause of the Utah Constitution. Specifically, the satellite providers alleged that the tax credit violates the dormant Commerce Clause by facially granting a preference based on geographic ties to the site, imposing a discriminatory effect on interstate commerce, and being motivated by an intent to discriminate against satellite providers who do not have an extensive local footprint. And they averred that the tax credit violates the Equal Protection Clause of the U.S. Constitution and the Uniform Operation of Laws Clause of the Utah Constitution because it advances no valid state interest.
¶9 The parties conducted initial discovery for several months. Then, one month before the discovery cut-off, the State Tax Commission moved for judgment on the pleadings.
¶10 The district court granted that motion. First, it held that the franchise fee tax credit did not run afoul of the dormant Commerce Clause because it was not facially discriminatory, discriminatory in effect, or discriminatory in purpose. In the district court‘s view, there was no discrimination of any consequence because the differential treatment of satellite providers was on the basis of a “technological mode of operation” and not the location
¶11 The satellite providers filed this appeal. In reviewing a decision on a motion for judgment on the pleadings, we yield no deference to the district court‘s analysis. We consider the legal viability of the satellite providers’ claims de novo. See State v. Ririe, 2015 UT 37, ¶ 5, 345 P.3d 1261. We also accept the factual allegations of the complaint as true.
¶12 Two sets of questions are presented. First, we consider the satellite providers’ dormant Commerce Clause claims. We affirm the dismissal of these claims on the ground that the franchise fee tax credit does not discriminate in a manner triggering strict scrutiny under the dormant Commerce Clause. Second, we also affirm the dismissal of the Uniform Operation of Laws Clause claims.2 Here we find rational grounds for the differential treatment of satellite and cable providers, and thus hold that the satellite providers have failed to state a viable claim.
II. THE DORMANT COMMERCE CLAUSE
¶13 The Commerce Clause grants Congress the authority to regulate interstate commerce.
¶15 There is a second form of dormant commerce scrutiny. A law whose effect on interstate commerce is merely “incidental” triggers a balancing test under Pike v. Bruce Church, Inc., 397 U.S. 137, 142 (1970). Pike balancing invalidates state laws affecting interstate commerce only if the law‘s burdens on commerce outweigh its “putative local benefits.” Id. The Pike bar is relatively low. If the law‘s effect on interstate commerce is merely incidental, it has a much greater chance of surviving constitutional scrutiny.
¶16 The satellite providers are not advancing a Pike claim. (They did initially, but they have abandoned it on appeal.) Instead they contend that the tax credit is directly discriminatory and fails strict scrutiny. Specifically, they allege that the tax credit discriminates on its face, in effect, and in purpose.
¶17 The satellite providers claim that the discrimination in question “is discernible from the face of the relevant Utah statutes.” In their complaint they allege that
¶18 The allegations of discriminatory effect speak to the varying impact of the tax сredit on two means of delivering pay-TV programming. Here the satellite providers allege that “[t]he tax credit differentiates between two types of businesses on the basis of whether a provider conducts a specific economic activity in the State“—specifically, “using ground distribution equipment in the State‘s public rights-of-way to deliver programming signals to subscribers” instead of delivering the same programming signals via satellite. Because the cable business model involves a “local footprint” that is larger than that of the satellite model, the satellite providers allege a discriminatory effect that runs afoul of the dormant Commerce Clause. They claim a discriminatory effect in the tax credit‘s impact of “shift[ing] the competitive balance in the pay-TV market in a way that benefits local economic interests at the expense of non-local interests.”
¶19 The satellite providers also allege discriminatory purpose. They assert that “[t]he cable industry drafted the original tax credit proposal and urged the State of Utah to distinguish between cable and satellite TV on the basis that cable provides substantially more economic benefits to the State and its residents than satellite TV.” And because “[t]he Utah Legislature adopted and enacted the bill without making any material changes to the draft language proposed by the local cable industry,” the satellite providers contend that “the Utah Legislature adopted, as its own, the discriminatory purpose of the statute.”
¶20 Each of these theories of discrimination is distinctly pled. And each, at some level, implicates distinct lines of analysis in controlling precedents. Yet each theory also triggers a common
¶21 We decide this case at this threshold level.3 We affirm on the ground that the satellite providers have failed to identify an element of discrimination in the sales tax credit (on its face, in effect, or in purpose) that triggers strict scrutiny under thе line of dormant commerce cases at issue. First, we present the governing framework for analysis under the applicable decisions from the U.S. Supreme Court—explaining that the dormant Commerce Clause tolerates discrimination based upon differential treatment of two different business models, and condemns only discrimination based on the location of a business or regulated business activity. Second, we consider—and reject—the dicta identified by the satellite providers as sustaining their claims (in particular, Lewis v. BT Inv. Managers, Inc., 447 U.S. 27, 42 n.9 (1980)). Third, we apply the governing caselaw to the claims pled here—concluding that the Utah tax credit is not impermissibly discriminatory because it is based not on a distinct geographic connection of a business or business activity, but only on differences in two competing business models. And we conclude with some observations about the current state of the law under the dormant Commerce Clause.
A. Controlling U.S. Supreme Court Precedent
¶22 The dormant Commerce Clause “precludes States from ‘discriminat[ing] between transactions on the basis of some interstate element.‘” Comptroller of Treasury of Md., 135 S. Ct. 1787 at 1794 (2015) (emphasis added) (quoting Bos. Stock Exch. v. State Tax Comm‘n, 429 U.S. 318, 332, n.12 (1977)). “This means, among other things, that a State ‘may not tax a transaction or incident more
¶23 The key question presented concerns the threshold matter of defining interstate commerce—of identifying the “interstate element” on which discrimination is prohibited, or in other words, the grounds on which a business is counted as a “local” one that may not be favored. Id. (citation omitted). Thus, it has long been held that the dormant Commerce Clause prohibits the “differential treatment of in-state and out-of-state economic interests that benefits the former and burdens the latter.” Or. Waste Sys., 511 U.S. at 99. But that prohibition implicates a threshold definitional question—of the scope of the “in-state” and “out-of-state interests” that are protected from discrimination.
¶24 To date, the Supreme Court has identified “in-state” and “out-of-state” businesses on the basis of a distinct geographic connection (or lack thereof) to the home state. Thus, the cases in which the Court has invoked strict dormant commerce scrutiny have involved favoritism for entities or business operations within a particular state—and attendant discrimination against entities or business operations outside such state. And the court has emphasized that the dormant Commerce Clause is not implicated by mere discrimination based on “differences between the nature of [two] businesses,” and not on the “location of their activities.” Amerada Hess Corp. v. Dir., Div. of Taxation, 490 U.S. 66, 78 (1989).
¶25 A classic case triggering strict dormant commerce scrutiny involves discrimination based on a business entity‘s principal place of business. See Lewis, 447 U.S at 42 (striking down a Florida statute prohibiting banks “with principal operations outside Florida” from operating investment subsidiaries or giving investment advice within the state). The physical location of a business‘s “principal operations” is a clear indication that the business is an “in-state” or “local” interest for dormant commerce purposes. Id. (citation
¶26 Strict scrutiny is also triggered by laws that discriminate based on the location of a regulated business activity.4 Again the focus is on geographic location.5 “No one disputes that a State may enact laws pursuant to its police powers that have the purpose and effect of encouraging domestic industry.” Bacchus Imps., Ltd. v. Dias, 468 U.S. 263, 271 (1984). But “the Commerce Clause stands as a limitation on the means by which a State can constitutionally seek to achieve that goal.” Id. And a traditional application of that limitation involves discrimination rooted in the geographic location of a particular business activity. “Thus, the Commerce Clause limits the manner in which States may legitimately compete for interstate trade, for ‘in the process of competition no State may discriminatorily tax the products manufactured
¶27 A related principle has been invoked in cases involving local laws rewarding the extent of business activity within the home state. Westinghouse Elec. Corp. v. Tully, 466 U.S. 388 (1984), for example, involved a New York tax provision that afforded a corporate tax credit proportional to the ratio of goods that a company exported from the state. The effect of this provision was to increase tax credits as the company moved more of its shipping activities into the state, and decrease tax credits as it shifted more of its activities out of the state. Id. at 401. Because the state employed discriminatory taxes “in an attempt to induce ‘business operations to be performed in the home State that could more efficiently be performed elsewhere,‘” the court found the tax scheme unconstitutional. Id. at 406 (emphasis added) (quoting Bos. Stock Exch., 429 U.S. at 336). Such a law discriminates in a manner triggering strict dormant commerce scrutiny because it exerts “an inexorable hydraulic pressure on interstate businesses to ply their trade within the State that enacted the measure.” Am. Trucking Assocs., Inc. v. Scheiner, 483 U.S. 266, 286 (1987) (emphasis added); see also Armco Inc. v. Hardesty, 467 U.S. 638, 642 (1984) (striking down differential tax scheme favoring in-state businesses and explaining that “a State may not tax a transaction or incident more heavily when it crosses state lines than when it occurs entirely within the State“).7
¶28 In all of the above cases, the focus has been on the geographic location of a business or business activity. Where strict dormant commerce scrutiny is invoked, it is as a result of discrimination on such basis. The Court has never held that the dormant Commerce Clause is concerned with discrimination based on the relative local “footprint” associated with a particular business activity.
¶29 In fact, the Court has undermined that view in a line of cases affirming the prerogative of state and local governments to treat different business models differently. See Exxon Corp. v. Governor of Md., 437 U.S. 117 (1978); Minnesota v. Clover Leaf Creamery Co., 449 U.S. 456 (1981); Amerada Hess, 490 U.S. at 66. Under these cases, a state may treat “two categories of companies” differently so long as the discrimination is based on “differences between the nature of their business” and not “the location of their activities.” Amerada Hess, 490 U.S. at 78. That sort of discrimination does not appear to implicate dormant commerce strict scrutiny under existing caselaw.
¶31 Yet the Court disagreed. Id. at 126. The fact that the law could potentially work a windfall for local retailers was beside the point in the Court‘s view because the law did not foreordain such an effect. The law “create[d] no barriers whatsoever” for out-of-state retailers. Id. And such retailers were free to fill the vacancies left by the producers. Id. More importantly for present purposes, the Court rejected the producers’ assertion that interstate commerce is burdened when one kind of interstate company (producers) is weakened. “[I]nterstate commerce,” the Court reasoned, “is not subjected to an impermissible burden simply because an otherwise valid regulation causes some business to shift from one interstate supplier to another.” Id. at 127. Put another way, laws that merely alter the market share among interstate companies do not implicate the dormant Commerce Clause. Id. at 126-27.
¶32 The Clover Leaf Creamery case is similar. That case involved a Minnesota law prohibiting the sale of dairy products in non-reusable packaging. Beсause the law was not “simple economic protectionism,” but instead “regulat[ed] evenhandedly,” the Court found no dormant Commerce Clause concerns. Clover Leaf Creamery, 449 U.S. at 471 (citation omitted). The Court conceded that the Minnesota pulpwood industry would be the beneficiary
¶33 The Court emphasized similar principles in Amerada Hess. The New Jersey statute at issue in that case taxed a portion of interstate companies’ “entire net income” based on the amount of business conducted in the state. Amerada Hess, 490 U.S. at 70. Producers’ “entire net income” turned out to be larger than retailers’ because producers paid a “windfall profit tax” to the federal government based on its petroleum production, and this tax factored into the “entire net income” calculation. Id. at 78. After New Jersey denied the producers’ attempt to deduct the tax, the producers sought relief in the Supreme Court, asserting that the law burdened interstate commerce by favoring interstate retailers over interstate producers. Relying on its prior holding in Exxon, the Court rejected this argument. It noted the interstate character of these two “categories of companies” (producers and retailers) and concluded that “whatever disadvantage this deduction denial might impose on [producers] does not constitute discrimination against interstate commerce.” Id. at 78. Specifically, the Court held that “[w]hatever different effect the . . . provision may have . . . results solely from differences between the nature of their businesses, not from the location of their activities.” Id.8
¶34 Thus, the dormant Commerce Clause‘s strict prohibition on discrimination is implicated by laws treating different interests
B. The Footnote in Lewis
¶35 A key element of the satellite companies’ response to the above is a footnote in Lewis v. BT Inv. Managers, Inc., 447 U.S. 27, 42 n.9 (1980). There the Court states that “discrimination based on the extent of local operations is itself enough to establish the kind of local protectionism we have identified.” Id. The satellite companies say that means that discrimination based on differences in the relative economic footprint of competing business models is sufficient to trigger dormant commerce strict scrutiny. We see the matter differently. As noted above, the Lewis Court‘s analysis hinged on the determination that the Florida law in question discriminated on the basis of the location of a business entity‘s “principal operatiоns.” Id. at 42. It concluded that the law discriminated among “affected business entities according to the extent of their contacts with the local economy,” but in context the point was not about a relative differential in the size of a business model‘s economic footprint; it was that the law prohibited “only banks, bank holding companies, and trust companies with principal operations outside Florida . . . from operating investment subsidiaries or giving investment advice within the State.” Id.
¶36 We do not read the Lewis footnote‘s reference to “discrimination based on the extent of local operations” as a freewheeling expansion of the domain of strict dormant commerce scrutiny. In context, the “local operations” referred to must be a business entity‘s “principal operations.” That, in fact, is the entire thrust of the footnote. It is rejecting the argument that the Florida law‘s prohibition could conceivably “also apply to locally organized bank holding companies“—“if they maintained their principal operаtions outside the State.” Id. at 42, n.9. In rejecting that point, the
¶37 The satellite providers’ expansive reading of the Lewis footnote is untenable in light of the above. The only “local operations” the Court “identified” in Lewis were a business‘s principal operations. So the quoted dictum in the Lewis footnote is not an endorsement of the satellite companies’ “relative economic footprint” theory of dormant commerce. (There is nothing relative about a business entity‘s principal place of business—which is by definition a distinctive geographic connection.9) It is simply a reinforcement of the Lewis Court‘s core point that discrimination based on a business‘s principal place of business is classic geographic protectionism prohibited by the dormant Commerce Clause. At most, the Lewis footnotе establishes that discrimination based on a business‘s principal place of business may still be actionable even if it cuts against businesses organized under the home state‘s laws. That is hardly an indication of the Supreme Court‘s extension of strict dormant commerce scrutiny to encompass discrimination based on different business models with differing impacts on the local economy.
C. The Satellite Providers’ Claims
¶38 The satellite providers’ have failed to state a claim under the dormant Commerce Clause.10 The Utah sales tax credit “does not discriminate against interstate goods, nor does it favor local [businesses or interests]. . . . [and hence] does not lead, either logically or as a practical matter, to a conclusion that the State is dis-
¶39 The cable companies have no distinct geographic connection to the state of Utah. Their principal place of business is elsewhere. The same goes for the satellite providers. And the business activity of both classes of pay-TV providers—delivery of television programming to Utah households—is equally “in-state.” The difference between cable and satellite is not that one is located or primarily operates “in-state” and the other “out-of-state“; it is that they employ different business models that have a different impact on local economies. But that does not trigger strict dormant commerce scrutiny. See Amerada Hess, 490 U.S. at 78 (dormant commerce scrutiny not implicated where the “different effect” that a law may have “results solely from differences between the nature of [competing] businesses, not from the location of their activities“).
¶40 The franchise fee sales tax credit may marginally “change the market structure” of the pay-TV market in Utah “by weakening” the satellite providers relative to their cable competitors. See
¶41 The tax credit provides no benefits to business entities based in Utah at the expense of those that are not.13 All cable
¶42 Our analysis is in line with that of many other courts who have upheld similar tax provisions against dormant commerce challenges.16 A few courts have reached contrary conclusions.17
We simply disagree with their analysis as we do not think that a cable TV operation can be said to be an “in-state interest” under the governing caselaw.
¶43 We affirm the dismissal of the satellite companies’ dormant commerce claims on this basis. The satellite providers have not alleged discrimination based on a relevant “interstate element” under the governing cases. Wynne, 135 S. Ct. at 1794 (quoting Bos. Stock Exch., 429 U.S. at 332 n.12). And absent any such allegation, the satellite providers’ claims fail as a matter of law. All of their dormant commerce allegations—as to facial discrimination or discrimination in effect and purpose—are along the same lines. All are directed at the tax credit‘s differential impact on different business models. And because we find such discrimination to fall beyond the purview of the dormant Commerce Clause, we affirm the district court‘s decision granting the Tax Commission‘s motion for judgment on the pleadings.
¶44 Many decades ago the Supreme Court described its dormant Commerce Clause caselaw as a “quagmire.” Nw. States Portland Cement Co. v. Minnesota, 358 U.S. 450, 458 (1959). Not much has changed in the interim, except perhaps to add more “room for controversy and confusion and little in the way of precise guides to the States in the exercise of their indispensable power оf taxation.” Id. at 457. Yet we must of course decide the cases that come before us, mindful of our role as a lower court to follow controlling precedent from the U.S. Supreme Court.
¶45 In so doing, we are reluctant to extend dormant Commerce Clause precedent in new directions not yet endorsed by that court. The high court‘s precedents in this area seem rooted more in “case-by-case analysis” than in any clear, overarching theory. See W. Lynn Creamery, Inc. v. Healy, 512 U.S. 186, 201 (1994). In a field like this one, it is more difficult than usual for a lower court to anticipate expansions of the law into new territory, as any decision to do so seems more like common-law decision-making than constitutional interpretation. The principle of dormant commerce, after all, is not rooted in a clause, but in a negative implication of one; so there is a dearth of any textual or historical foundation for a court to look to.
¶46 Our hesitance to extend the law of dormant commerce is reinforced by a prаctical problem: The extension advocated by the satellite providers would open a can of worms. Varying business models are available in most any field. And the choice among business models will often have a differential impact on the local economy (and a different “footprint“). If the courts are to embark on a constitutionally mandated journey limiting the longstanding police powers of state and local governments to regulate business, it should be the U.S. Supreme Court that makes that decision. We do not think it has. And since a move in that direction would require subjective line-drawing that would take us far afield of the Court‘s current approach, we doubt that it will.
III. THE UNIFORM OPERATION OF LAWS CLAUSE
¶47 The Utah Constitution requires that “[a]ll laws of a general nature . . . have uniform operation.”
¶48 This strand of uniform operation analysis is not implicated here. The satellite providers are not complaining that the Tax Commission has granted special privileges or exemptions to a law that is more general on its face. Their complaint concerns legislative classification.
¶49 That sort of claim implicates the second strand of our uniform operation of law jurisprudence. This strand “treats the requirement of uniform operatiоn as a state-law counterpart to the federal Equal Protection Clause.” Id. ¶ 35. Under our governing standard, we ask (a) “what classifications the statute creates,” (b) “whether different classes . . . are treated disparately,” and then (c) “whether the legislature had any reasonable objective that warrants the disparity” among any classifications. Id. ¶ 35 (quoting State v. Angilau, 2011 UT 3, ¶ 21, 245 P.3d 745).
¶50 This final step “incorporates varying standards of scrutiny.” Id. ¶ 36. Of particular relevance here, this step “recognize[s] that most classifications are presumptively permissible, and thus subject only to ‘rational basis review.‘” Id. Thus, we limit heightened scrutiny for the narrow band of cases involving “discrimination on the basis of a ‘suspect class’ (e.g., race or gender),” or discrimination on the basis of a “fundamental right.” Id. (citation omitted).
¶51 The satellite providers have failed to state a claim under this standard. They have not alleged that the pay-TV tax credit
¶52 This is essentially the federal equal protection standard. Both the federal courts and this court have used the “rational basis” term as shorthand.18 And our approach seems to mirror the federal standard in all relevant respects.19 That is not to say that we are bound to follow federal law. Although we “generally incorporate principles from the federal equal protection regime,” we have also “reserv[ed] the right to depart from those standards.” Canton, 2013 UT 44, ¶ 36 n.9. “Yet our precedent to date has offered little basis or explanation for the extent of any difference between the federal equal protection guarantee and the state requirement of uniform operation.” Id. And here, as in Canton, “the parties . . . have not ventured anything along those lines in their briefs.” Id.
¶53 So we apply the standard “rational basis” test. And we hold that the satellite companies’ claim fails as a matter of law under that test, as the “rationality of the [credit‘s] classification is quite apparent.” See id. ¶ 40. The most obvious ground for limiting the tax credit to cable providers is the one highlighted in our dormant commerce analysis above—only cable companies incur
Notes
In Fulton the Court struck down a North Carolina tax law allowing state residents to take a tax deduction on the value of corporate stock to the extent of the percentage of the issuing corporation‘s “sales, payroll, and property located in the State.” Id. at 328 (emphasis added). Under this scheme, the tax on stock of a company doing all of its business in North Carolina would be zero, while the tax on the stock of a company doing none of its business in North Carolina would be one-hundred percent of the stated rate. Id. But the connection to the home state under this law was based on a distinct geographic connection—sales, payroll, and property “located in the State.” Id. So the problem with the tax deduction in Fulton was not its encouragement of investment in corporate entities with a relatively larger North Carolina “footprint“; it was its discrimination against “out-of-state” entities and in favor of “in-state” entities as measured by their distinct geographic connection to the state (or lack thereof). Our Utah sales tax law does no such thing. It discriminates not on the basis of geographic connection but a difference in business models.