delivered the opinion of the Court.
Petitioner McKesson Corporation brought this action in Florida state court, alleging that Florida’s liquor excise tax violated the Commerce Clause of the United States Constitution. The Florida Supreme Court agreed with petitioner that the tax scheme unconstitutionally discriminated against interstate commerce because it provided preferences for distributors of certain local products. Although the court enjoined the State from giving effect to those preferences in the future, the court also refused to provide petitioner a refund or any other form of relief for taxes it had already paid.
Our precedents establish that if a State penalizes taxpayers for failure to remit their taxes in timely fashion, thus requiring them to pay first and obtain review of the tax’s validity later in a refund action, the Due Process Clause requires the State to afford taxpayers a meaningful opportunity to secure postpayment relief for taxes already paid pursuant to a tax scheme ultimately found unconstitutional. We therefore agree with petitioner that the state court’s decision denying such relief must be reversed.
I
For several decades until 1985, Florida’s liquor excise tax scheme, which imposes taxes on manufacturers, distributors, and in some cases vendors of alcoholic beverages, provided
*23
for preferential treatment of beverages that were manufactured from certain “Florida-grown” citrus and other agricultural crops and then bottled in state. See,
e. g.,
Fla. Stat. §§ 564.02, 564.06, 565.12, 565.14 (1983). After this Court held in
Bacchus Imports, Ltd.
v.
Dias,
Petitioner McKesson Corporation is a licensed wholesale distributor of alcoholic beverages whose products did not qualify for the rate reductions. 3 Petitioner paid the appli *24 cable taxes every month as required after the revised Liquor Tax went into effect, but in June 1986, petitioner filed an application with the Florida Office of the Comptroller seeking a refund on the ground that the tax scheme was unlawful. In September, after the Comptroller denied its application, petitioner (along with other distributors not present here) brought suit in Florida state court against respondents Division of Alcoholic Beverages and Tobacco, Department of Business Regulation, and Office of the Comptroller. Petitioner challenged the constitutionality of the tax under the Commerce Clause as well as under various other provisions of the United States and Florida Constitutions, and petitioner sought both declaratory and injunctive relief against the continued enforcement of the discriminatory tax scheme. Pursuant to Florida’s “Repayment of Funds” statute, which provides for a refund of “[a]n overpayment of any tax, license or account due” and “[a]ny payment made into the State Treasury in error,” §§ 215.26(1)(a), (c), and in apparent compliance with the statutory requisites for preserving a claim thereunder, 4 petitioner also sought a refund in the amount of *25 the excess taxes it had paid as a result of its disfavored treatment.
On petitioner’s motion for partial summary judgment, the Florida trial court invalidated the discriminatory tax scheme on Commerce Clause grounds because the revised “legislation failed to surmount the constitutional violations addressed in Bacchus [Imports, supra]” App. 263. The trial court enjoined future enforcement of the preferential rate reductions, leaving all distributors subject to the Liquor Tax’s nonpreferred rates. The court, however, declined to order a refund or any other form of relief for the taxes previously paid and timely challenged under the discriminatory scheme. The court’s order of prospective relief was stayed pending respondents’ appeal of the Commerce Clause ruling to the Florida Supreme Court. 5
Petitioner McKesson cross-appealed the trial court’s ruling, arguing that as a matter of both federal and state law it was entitled at least to “a refund of the difference between the disfavored product’s tax rate and the favored product’s tax rate.”
After petitioner’s request for rehearing was denied, petitioner filed a petition for writ of certiorari in this Court, presenting the question whether federal law entitles it to a partial tax refund. We granted the petition,
II
Respondents first ask us to hold that, though the Florida courts accepted jurisdiction over this suit which sought monetary relief from various state entities, the Eleventh Amendment
7
nevertheless precludes our exercise of appellate jurisdiction in this case. We reject respondents’ suggestion. Almost 170 years ago, Chief Justice Marshall, writing for the Court, rejected a State’s Eleventh Amendment challenge to
*27
this Court’s power on writ of error to review the judgment of a state court involving an issue of federal law. See
Cohens
v.
Virginia,
*28
Respondents correctly note that, since
Cohens,
the effect of the Eleventh Amendment on this Court’s appellate jurisdiction over cases arising in state court has only infrequently been discussed in our cases. But those discussions uniformly reveal an understanding that the Amendment does not circumscribe our appellate review of state-court judgments.
9
Moreover, that this Court has had little occasion to discuss the issue merely reflects the extent to which States, though frequently interjecting Eleventh Amendment objections to suits initiated against them in federal court, have understood the time-honored practice of appellate review of state-court judgments to be consistent with this Court’s role in our federal system. “[I]t is plain that the framers of the constitution did contemplate that cases within the judicial cognizance of the United States not only might but would arise in the state courts, in the exercise of their ordinary jurisdiction.”
Martin
v.
Hunter’s Lessee,
Ill
It is undisputed that the Florida Supreme Court, after holding that the Liquor Tax unconstitutionally discriminated against interstate commerce because of its preferences for liquor made from “‘crops which Florida is adapted to growing,”’
*32 A
We have not had occasion in recent years to explain the scope of a State’s obligation to provide retrospective relief as part of its postdeprivation procedure in cases such as this.
16
Our approach today, however, is rooted firmly in precedent dating back to at least early this century.
Atchison, T. & S. F. R. Co.
v.
O’Connor,
“It is reasonable that a man who denies the legality of a tax should have a clear and certain remedy. The rule being established that apart from special circumstances he cannot interfere by injunction with the State’s collection of its revenues, an action at law to recover back what he has paid is the alternative left. Of course we are speaking of those cases where the State is not put to an action if the citizen refuses to pay. In these latter he can interpose his objections by way of defence, but when, as is common, the State has a more summary remedy, such as distress, and the party indicates by protest that he is yielding to what he cannot prevent, courts sometimes perhaps have been a little too slow to recognize the implied duress under which payment is made. *33 But even if the State is driven to an action, if at the same time the citizen is put at a serious disadvantage in the assertion of his legal, in this case of his constitutional, rights, by defence in the suit, justice may require that he should be at liberty to avoid those disadvantages by paying promptly and bringing suit on his side.” Id., at 285-286.
After finding that the railroad company’s tax payment “was made under duress,” id., at 287, the Court issued a judgment entitling the company to a “refunding of the tax.” Ibid. Thus was the taxpayer provided a “clear and certain remedy” for the State’s unlawful extraction of tax moneys under duress.
In
Ward
v.
Love County Board of Comm’rs,
“To say that the county could collect these unlawful taxes by coercive means and not incur any obligation to pay them back is nothing short of saying that it could take or appropriate the property of these Indian allottees arbitrarily and without due process of law. Of *34 course this would be in contravention of the Fourteenth Amendment, which binds the county as an agency of the State.” Id., at 24.
See also
Carpenter
v.
Shaw,
In
Montana National Bank of Billings
v.
Yellowstone County,
The Court in Montana National Bank recognized that the federal mandate of equal treatment could have been satisfied by collecting back taxes from state banks rather than by granting a refund to national banks. Id., at 505. But as to this possibility, the Court remarked:
“[I]t is unnecessary to say more than that it nowhere appears that these [taxing] officers, if they possess the power [to assess back taxes], have undertaken to exercise it or that they have any intention of ever doing so. It will be soon enough to invite consideration of this purely speculative suggestion when, if ever, the taxing officials shall have put it into practical effect.” Ibid.
Montana National Bank thus held that one forced to pay a discriminatorily high tax in violation of federal law is entitled, in addition to prospective relief, to a refund of the excess tax paid—at least unless the disparity is removed in some other manner.
We again applied this analysis to a discriminatory tax in
Iowa-Des Moines National Bank
v.
Bennett,
*36 “The [banks’] rights were violated, and the causes of action arose, when taxes at the lower rate were collected from their competitors. It may be assumed that all ground for a claim for refund would have fallen if the State, promptly upon discovery of the discrimination, had removed it by collecting the additional taxes from the favored competitors. By such collection the [banks’] grievances would have been redressed, for these are not primarily overassessment. The right invoked is that to equal treatment; and such treatment will be attained if either their competitors’ taxes are increased or their own reduced.” Id., at 247.
But the State did not elect to set matters right by collecting additional taxes from the banks’ competitors for the four tax years encompassed by the suit. And the Court found it “well settled” that the banks could not be “remitted to the necessity of awaiting such action by the state officials upon their own initiative.” Ibid. The Court held, therefore, that the banks were “entitled to obtain in these suits refund of the excess of taxes exacted from them.” Ibid.
B
These cases demonstrate the traditional legal analysis appropriate for determining Florida’s constitutional duty to provide relief to petitioner McKesson for its payment of an unlawful tax. Because exaction of a tax constitutes a deprivation of property, the State must provide procedural safeguards against unlawful exactions in order to satisfy the commands of the Due Process Clause.
17
The State may choose to provide a form of “predeprivation process,” for example, by authorizing taxpayers to bring suit to enjoin imposition of a
*37
tax prior to its payment, or by allowing taxpayers to withhold payment and then interpose their objections as defenses in a tax enforcement proceeding initiated by the State. However, whereas “[w]e have described ‘the root requirement’ of the Due Process Clause as being ‘that an individual be given an opportunity for a hearing
before
he is deprived of any significant property interest,’”
Cleveland Bd. of Education
v.
Loudermill,
*38
Florida has availed itself of this approach, establishing various sanctions and summary remedies designed so that liquor distributors tender tax payments
before
their objections are entertained and resolved.
20
As a result, Florida does not purport to provide taxpayers like petitioner with a meaningful opportunity to withhold payment and to obtain a predeprivation determination of the tax assessment’s validity;
21
rather, Florida requires taxpayers to raise their objections to
*39
the tax in a postdeprivation refund action. To satisfy the requirements of the Due Process Clause, therefore, in this refund action the State must provide taxpayers with, not only a fair opportunity to challenge the accuracy and legal validity of their tax obligation,
22
but also a “clear and certain remedy,”
O’Connor,
Had the Florida courts declared the Liquor Tax invalid either because (other than its discriminatory nature) it was beyond the State’s power to impose, as was the unapportioned tax in
O’Connor,
or because the taxpayers were absolutely immune from the tax, as were the Indian Tribes in
Ward
and
Carpenter,
no corrective action by the State could cure the invalidity of the tax during the contested tax period. The State would have had no choice but to “undo” the unlawful deprivation by refunding the tax previously paid under duress, because allowing the State to “collect these unlawful taxes by coercive means and not incur any obligation to pay them back . . . would be in contravention of the Fourteenth Amendment.”
Ward,
Here, however, the Florida courts did not invalidate the Liquor Tax in its entirety; rather, they declared the tax scheme unconstitutional only insofar as it operated in a manner that discriminated against interstate commerce. The State may, of course, choose to erase the property deprivation itself by providing petitioner with a full refund of its tax payments. But as both Montana National Bank and Bennett illustrate, a State found to have imposed an impermissibly discriminatory tax retains flexibility in responding to this *40 determination. Florida may reformulate and enforce the Liquor Tax during the contested tax period in any way that treats petitioner and its competitors in a manner consistent with the dictates of the Commerce Clause. Having done so, the State may retain the tax appropriately levied upon petitioner pursuant to this reformulated scheme because this retention would deprive petitioner of its property pursuant to a tax scheme that is valid under the Commerce Clause. In the end, the State’s postdeprivation procedure would provide petitioner with all of the process it is due: an opportunity to contest the validity of the tax and a “clear and certain remedy” designed to render the opportunity meaningful by preventing any permanent unlawful deprivation of property.
More specifically, the State may cure the invalidity of the Liquor Tax by refunding to petitioner the difference between the tax it paid and the tax it would have been assessed were it extended the same rate reductions that its competitors actually received. Cf.
Montana National Bank
and
Bennett
(curing discrimination through such refunds). Alternatively, to the extent consistent, with other constitutional restrictions, the State may assess and collect back taxes from petitioner’s competitors who benefited from the rate reductions during the contested tax period, calibrating the retroactive assessment to create in hindsight a nondiscriminatory scheme. Cf.
Bennett,
Respondents suggest that, in order to redress fully petitioner’s unconstitutional deprivation, the State need not actually impose a constitutional tax scheme retroactively on all distributors during the contested tax period. Rather, they claim, the State need only place petitioner in the same tax position that petitioner would have been placed by such a hypothetical scheme. Specifically, respondents contend that the State, had it known that the Liquor Tax would be declared unconstitutional, would have imposed the higher flat tax rate on all distributors. Because petitioner would have paid the same tax under this hypothetical scheme as it did under the Liquor Tax, respondents claim that petitioner is not entitled to any retrospective relief (at least in the form of a refund); *42 such relief would confer a “windfall” on petitioner by leaving it with a smaller tax burden than it would have borne were there no Commerce Clause violation in the first place.
We implicitly rejected this line of reasoning in Montana National Bank and Bennett, and we expressly do so today. Even aside from the contrived and self-serving nature of the baseline against which respondents propose to measure petitioner’s “deprivation,” 24 respondents’ approach is inconsistent with the nature of the State’s due process obligation. The deprivation worked by the Liquor Tax violated the Commerce Clause because the tax scheme’s purpose and effect was to impose a relative disadvantage on a category of distributors (those dealing with nonpreferred products) largely composed of out-of-state companies, not because its treatment of this category of distributors diverged from some fixed substantive norm. 25 Hence, the salient feature of the position petitioner “should have occupied” absent any Commerce Clause violation is its equivalence to the position actually occupied by petitioner’s favored competitors.
*43 But the State’s offer to restore petitioner only to the same absolute tax position it would have enjoyed if taxed according to a “hypothetical” nondiscriminatory scheme does not in hindsight avoid the unlawful deprivation: It still in fact treats petitioner worse than distributors using the favored local products, thereby perpetuating the Commerce Clause violation during the contested tax period. Respondents are therefore correct that petitioner’s “claim for a refund thus asks for much more than prompt injunctive relief would have achieved” 26 only in the narrow sense that petitioner’s absolute tax burden might be lower after the refund than if the tax preferences had immediately been enjoined such that all distributors were taxed at the higher rates. However, only an actual refund (or other retroactive adjustment of the tax burdens borne by petitioner and/or its favored competitors during the contested tax period) can bring about the nondiscrimination that “prompt injunctive relief would have achieved.” If, through the State’s own choice of relief, petitioner ends up paying a smaller tax than it would have paid if the State initially had imposed the highest rate on everyone, petitioner would not enjoy an unpalatable “windfall.” Rather, petitioner would merely be protected from the comparative economic disadvantage proscribed by the Commerce Clause. Hence, the State’s duty under the Due Process Clause to provide a “clear and certain remedy” requires it to ensure that the tax as actually imposed on petitioner and its competitors during the contested tax period does not deprive petitioner of tax moneys in a manner that discriminates against interstate commerce. 27
*44 c
The Florida Supreme Court cites two “equitable considerations” as grounds for providing petitioner only prospective relief, but neither is sufficient to override the constitutional requirement that Florida provide retrospective relief as part of its postdeprivation procedure. The Florida court first mentions that “the tax preference scheme [was] implemented by the [Division of Alcoholic Beverages and Tobacco] in good faith reliance on a presumptively valid statute.”
And in the present case, Florida’s failure to avail itself of certain of these methods of self-protection weakens any “equitable” justification for avoiding its constitutional obligation to provide relief.
29
Moreover, even were we to assume that
*46
the State’s reliance on a “presumptively valid statute” was a relevant consideration to Florida’s obligation to provide relief for its unconstitutional deprivation of property, we would disagree with the Florida court’s characterization of the Liquor Tax as such a statute. The Liquor Tax reflected only cosmetic changes from the prior version of the tax scheme that itself was virtually identical to the Hawaii scheme invalidated in
Bacchus Imports, Ltd.
v.
Dias,
The Florida Supreme Court also speculated that “if given a refund, [petitioner] would in all probability receive a windfall, since the cost of the tax has likely been passed on to [its] customers.”
In any event, however, we reject respondents’ premise that “equitable considerations” justify a State’s attempt to avoid bestowing this so-called “windfall” when redressing a tax that is unconstitutional because discriminatory. In
United States
v.
Jefferson Electric Mfg. Co.,
But petitioner does not challenge here a tax assessment that merely exceeded the amount authorized by statute; petitioner’s complaint was that the Florida tax scheme unconstitutionally discriminated against interstate commerce. The tax injured petitioner not only because it left petitioner poorer in an absolute sense than before (a problem that might be rectified to the extent petitioner passed on the economic incidence of the tax to others), but also because it placed petitioner at a relative disadvantage in the marketplace vis-a-vis competitors distributing preferred local products. See n. 25, supra; see also Bacchus Imports, supra, at 267 (“[E]ven if the tax [was] completely and successfully passed on, it increase[d] the price of [petitioner’s] products as compared to the exempted beverages”). To whatever extent petitioner succeeded in passing on the economic incidence of the tax through higher prices to its customers, it most likely lost sales to the favored distributors or else incurred other costs (e. g., for advertising) in an effort to maintain its market share. 32 The State cannot persuasively claim that “equity” entitles it to retain tax moneys taken unlawfully from petitioner due to its pass-on of the tax where the pass-on itself furthers the very competitive disadvantage constituting the Commerce Clause violation that rendered the deprivation un *49 lawful in the first place. 33 We thus reject respondents’ reliance on a pass-on defense in this context. 34
D
Respondents assert that requiring the State to rectify its unconstitutional discrimination during the contested tax period “would plainly cause serious economic and adminis
*50
trative dislocation for the State.” Brief for Respondents on Rearg. 20. We agree that, within our due process jurisprudence, state interests traditionally have played, and may play, some role in shaping the contours of the relief that the State must provide to illegally or erroneously deprived taxpayers, just as such interests play a role in shaping the procedural safeguards that the State must provide in order to ensure the accuracy of the initial determination of illegality or error. See generally
Mathews
v.
Eldridge,
Respondents also observe that the State’s choice of relief may entail various administrative costs (apart from the “cost” *51 of any refund itself 35 ). Cf. Mathews, supra, at 348 (“[T]he Government’s interest...in conserving scarce fiscal and administrative resources is a factor that must be weighed” when determining precise contours of process due). The State may, of course, consider such costs when choosing between the various avenues of relief open to it. Because the Florida Supreme Court did not recognize in its refund proceeding the State’s obligation under the Due Process Clause to rectify the invalidity of its deprivation of petitioner’s property, the court did not consider how any administrative costs might influence the selection and fine-tuning of the relief afforded petitioner. We leave this to the state court on remand.
IV
When a State penalizes taxpayers for failure to remit their taxes in timely fashion, thus requiring them to pay first before obtaining review of the tax’s validity, federal due process principles long recognized by our cases require the State’s postdeprivation procedure to provide a “clear and certain remedy,”
O’Connor,
It is so ordered.
Notes
“The Congress shall have Power ... To regulate Commerce ... among the several States.” U. S. Const., Art. I, § 8, cl. 3.
Under the Liquor Tax, the tax rate for each of several categories of preferred products is calculated according to a sliding scale. The rate varies directly with the total volume of such products sold by all distributors during the preceding month. If the volume of preferred products sold within any category is low, the tax rate is very favorable compared to the generally applicable rate for nonpreferred products. Conversely, at a relatively high volume of sales, the tax rate for preferred products equals the nonpreferred rate.
The Liquor Tax also contains “retaliation” provisions which declare that the rate reductions applicable to the preferred products do not apply when they are imported from a State that imposes discriminatory taxes or provides agricultural price supports or export subsidies benefiting its own locally produced alcoholic beverages. Fla. Stat. §§ 564.06(9), 565.12(1)(c), 565.12(2)(c) (1989).
Florida law divides traffic in alcoholic beverages into three tiers: (1) manufacture or importation; (2) wholesale distribution; and (3) retail sales. § 561.14. Manufacturers may not sell directly to retail dealers, and dis *24 tributors therefore serve as necessary intermediaries. The State places the legal incidence of the excise taxes on distributors, who must remit the taxes monthly. Distributors may choose to sell beverage products receiving the tax preferences, nonpreferred products, or both. §§ 561.50, 561.506, 565.13.
The record is unclear whether and how, prior to petitioner’s refund application to the Comptroller in September 1986, petitioner protested its tax payments or otherwise put the State on notice of its position that the Liquor Tax was unconstitutional. It appears, however, that Florida law does not require a taxpayer to pay under protest in order to preserve the right to challenge a remittance in a postpayment refund action, as long as the action is initiated within the applicable limitations period. See § 215.26 (2) (generally applicable 3-year limitations period for refund actions containing no protest requirement);
Miami
v.
Florida Retail Federation, Inc.,
The appeal and cross-appeal were certified directly to the Florida Supreme Court by the District Court of Appeal.
The State’s immediate filing of its Notice of Appeal automatically stayed the trial court’s order. Fla. Rule App. Proc. 9.310(b)(2). Petitioner requested the trial court to vacate the stay, arguing that continued enforcement of the unconstitutional tax scheme pending State Supreme Court review would continue to expose Florida’s treasury to claims for tax refunds. After a hearing, the trial court denied the motion. Pending the State Supreme Court’s final decision, therefore, respondents continued to collect taxes under the Liquor Tax with the unconstitutional preferences still in effect.
Hence, in this case petitioner contests the validity of the taxes it paid from July 1985 until the State Supreme Court’s final decision was given effect in February 1988 (the contested tax period).
Both cases were argued in October Term 1988 and then reargued in October Term 1989 after supplemental briefing was requested.
“The Judicial power of the United States shall not be construed to extend to any suit in law or equity, commenced or prosecuted against one of the United States by Citizens of another State, or by Citizens or Subjects of any Foreign State.” U. S. Const., Amdt. 11.
See,
e. g., Davis
v.
Michigan Dept. of Treasury,
In several recent cases, we have exercised appellate jurisdiction to review issues of federal law arising in suits brought against States or state entities in state court even after noting that the Eleventh Amendment would have precluded federal jurisdiction as an original matter. See,
e. g., Will
v.
Michigan Dept. of State Police,
See also
Tafflin
v.
Levitt,
“This Constitution, and the Laws of the United States which shall be made in Pursuance thereof; and all Treaties made, or which shall be made, under the Authority of the United States, shall be the supreme Law of the Land; and the Judges in every State shall be bound thereby, any Thing in the Constitution or Laws of any state to the contrary notwithstanding.” U. S. Const., Art. VI.
“Upon the State courts, equally with the courts of the Union, rests the obligation to guard, enforce, and protect every right granted or secured by the Constitution of the United States and the laws made in pursuance thereof, whenever those rights are involved in any suit or proceeding before them .... If they fail therein, and withhold or deny rights, privileges, or immunities secured by the Constitution and laws of the United States, the party aggrieved may bring the case from the highest court of the State in which the question could be decided to this court for final and conclusive determination.”
Robb
v.
Connolly,
Of course, though the Eleventh Amendment does not constrain this Court’s appellate jurisdiction over such suits, appellate jurisdiction may be constrained for other reasons not apposite here. For example, a state-court judgment would be unreviewable were it to rest on an independent
*30
and adequate state-law ground. See
Michigan
v.
Long,
Charles River Bridge
v.
Warren Bridge,
For example, in
Smith
v.
Reeves,
Similarly, in
Chandler
v.
Dix,
“[N]or shall any State deprive any person of life, liberty, or property, without due process of law.” U. S. Const., Amdt. 14, § 1.
Respondents do not question the Florida Supreme Court’s holding that the Liquor Tax violated the Commerce Clause. And it is clear that, under the approaches advanced today in American Trucking Assns., Inc. v. Smith, post, p. 167, the Florida Supreme Court’s holding governs the validity of respondents’ taxation of petitioner prior to the date of the court’s decision. Under Justice O’Connor’s approach, see post, at 177-178, the Florida court’s decision applies retroactively because it rested on established principles of Commerce Clause jurisprudence. See infra, at 45-46. Under Justice Stevens’ approach, post, at 212-218, the Florida court’s decision, like all judicial decisions, applies retroactively. See also Justice Scalia’s separate opinion, post, at 204-205; the circumstances present in that case warranting in his view a departure from stare decisis are not present here.
In the recent past, after invalidating a state tax scheme on Commerce Clause grounds, we have left state courts with the initial duty upon remand of crafting appropriate relief in accord with both federal and state law. See,
e. g., American Trucking Assns., Inc.
v.
Scheiner,
See,
e. g., Mathews
v.
Eldridge,
See,
e. g., Bob Jones University
v.
Simon,
See,
e. g., California
v.
Grace Brethren Church,
If a distributor fails to pay the tax on time, the Division of Alcoholic Beverages and Tobacco may issue a warrant which, when filed in a local circuit court, directs the county sheriff to levy upon and sell the delinquent taxpayer’s goods and chattels to recover the amount of the unpaid tax plus a penalty of 50%, along with interest of 1% per month and the costs of executing the warrant. Fla. Stat. § 210.14(1) (1989). In addition, the Division may revoke, § 561.29(l)(a), or decline to renew, § 561.24(5), a distributor’s license for failure to abide by Florida law, including the statutory requirement that the Liquor Tax be timely paid.
We have long held that, when a tax is paid in order to avoid financial sanctions or a seizure of real or personal property, the tax is paid under “duress” in the sense that the State has not provided a fair and meaningful predeprivation procedure. See,
e. g., United States
v.
Mississippi Tax Comm’n,
In contrast, if a State chooses not to secure payments under duress and instead offers a meaningful opportunity for taxpayers to withhold contested tax assessments and to challenge their validity in a predeprivation hearing, payments tendered may be deemed “voluntary.” The availability of a predeprivation hearing constitutes a procedural safeguard against unlawful deprivations sufficient by itself to satisfy the Due Process Clause, and taxpayers cannot complain if they fail to avail themselves of this procedure. See Mississippi Tax Comm’n, supra, at 368, n. 11 (“[W]here voluntary payment [of a tax] is knowingly made pursuant to an illegal demand, recovery of that payment may be denied”).
See n. 17,
supra;
see also,
e. g., Mathews,
We previously have held that the retroactive assessment of a tax increase does not necessarily deny due process to those whose taxes are increased, though beyond some temporal point the retroactive imposition of a significant tax burden may be “so harsh and oppressive as to transgress the constitutional limitation,” depending on “the nature of the tax and the circumstances in which it is laid.”
Welch
v.
Henry,
Because we do not know whether the State will choose in this case to assess and collect back taxes from previously favored distributors, we need not decide whether this choice would violate due process by unduly interfering with settled expectations.
Should the State choose this remedial alternative, the State’s effort to collect back taxes from previously favored distributors may not be perfectly successful. Some of these distributors, for example, may no longer be in business. But a good-faith effort to administer and enforce such a retroactive assessment likely would constitute adequate relief, to the same extent that a tax scheme would not violate the Commerce Clause merely because tax collectors inadvertently missed a few in-state taxpayers.
Whether the State would have taxed all distributors at the highest rate authorized by the Liquor Tax depends upon counterfactual assumptions regarding the many complex variables that affect legislative judgment, and therefore respondents’ prediction is not easily proved. It is quite possible, for example, that had the legislature been unable to enact the discriminatory Liquor Tax, the legislature instead would have extended universally the lower tax rate because it would have preferred to keep to a minimum the absolute economic burden on Florida growers of the preferred products as well as on the (mostly in-state) distributors of those products—even though this particular aspect of the tax scheme would generate less total revenue.
The Florida Supreme Court noted that “[i]t is undisputed that manufacturers and distributors of beverages which qualify for preferential treatment under [the Liquor Tax] are in direct competition with manufacturers and distributors of alcoholic beverages which do not. . . . With these facts in mind it becomes quite apparent that. . . Florida’s alcoholic beverage tax scheme clearly raises the relative cost of doing business for a manufacturer or distributor of alcoholic beverages which are not made from base crops which are ‘adapted to growing in Florida.’”
Brief for Respondents on Rearg. 15.
Respondents also assert that no refund is appropriate because petitioner most likely would pay the same amount of tax even if the
preferred
sliding scale tax schedules were retroactively extended to petitioner. As explained earlier, see n. 2,
supra,
the tax rate on preferred products under the Liquor Tax varies with the total volume of such products sold. Respondents suggest that, were the sliding scale schedule applied to petitioner, then “the gallons of alcoholic beverages sold by petitioner (and the
*44
other distributors who previously paid the generally-applicable tax) [would have to be] included in the calculation” of the appropriate tax rate. Brief for Respondents 28. Cf.
Los Angeles Dept. of Water and Power
v.
Manhart,
We agree with respondents, that the State might remedy the invalidity of petitioner’s deprivation by extending to petitioner the sliding scale schedule in a nondiscriminatory fashion—but respondents’ proposal would appear not to accomplish this result. If, as proposed, the State were to calculate the tax rate applicable to petitioner based on the total volume of sales of both preferred and nonpreferred goods, but leave untouched the taxes actually collected from the favored distributors based on the volume of sales of only preferred goods, the resulting tax scheme would itself raise questions under the Commerce Clause due to the State’s use of a different “volume” variable for the preferred and nonpreferred goods in a manner that clearly disadvantages the latter. In order to cure the illegality of the tax as originally imposed, the State must ultimately collect a tax for the contested tax period that in no respect impermissibly discriminates against interstate commerce.
See
Ward
v.
Love County Board of Comm’rs,
For example, even after the Florida trial court held that the Liquor Tax violated the Commerce Clause and enjoined the tax preferences for local products, the State did not join petitioner’s motion to vacate the stay automatically imposed pending appeal, thus continuing the unconstitutional tax assessment for an extra 11 months. See n. 5, supra. The State also opposed the suggestion that it place into a separate escrow account the *46 discriminatory portion of taxes collected during this period of time, on the ground that “[t]here is a statutory mechanism in place . . . allowing for refunds.” App. 286.
The state trial court, after ruling favorably upon petitioner’s motions for a preliminary injunction and partial summary judgment based on its holding that the Liquor Tax violated the Commerce Clause, ruled sua sponte that its judgment would have only prospective effect, and this ruling was upheld on direct appeal. At no time has any party had the opportunity to present evidence concerning the extent, if any, of petitioner’s ability to pass on the economic burden of the excise tax to its consumers or suppliers. The Florida Supreme Court’s statement that the tax “has likely been passed on” by petitioner therefore is purely speculative.
We have expressed particular concern about the theoretical, factual, and practical difficulties in engaging in satisfactory “pass-on” analysis in the context of antitrust doctrine. See
Illinois Brick Co.
v.
Illinois,
Petitioner’s relative market share might have stayed constant if the favored distributors reacted by raising their own prices to the same extent as did petitioner when trying to pass on its excess tax burden. If so, however, petitioner still would have suffered a comparative economic injury because the tax pass-on would have enabled the favored distributors alone to derive an increase in total revenue from the discriminatory tax.
Petitioner’s market share and total revenue also might have stayed constant, at least in the short run, had all of its sales to liquor retailers been pursuant to cost-plus contracts. See Hanover Shoe, supra, at 494. But respondents do not claim that petitioner was in this position.
It is conceivable that a particular distributor’s economic injury may be quite severe, for example, if the tax drives it out of the market entirely (though a rational disfavored distributor would not allow itself to incur any greater economic injury through a pass-on than it would have incurred had it simply shouldered the entire burden of the tax deprivation itself). However, the State’s obligation under the Due Process Clause to provide a refund (should it choose this avenue of relief) extends only to refunding the excess taxes collected under the Liquor Tax. Petitioner has not sought in this action to recover any actual damages it may have suffered. See Brief for Petitioner on Rearg. 3, n. 2; id., at 7.
Respondents suggest that a pass-on defense may nevertheless be invoked as a matter of state law. While they concede that the State waived any sovereign immunity from suit through Fla. Stat. § 215.26’s authorization of a state-court refund action, they contend that this waiver extends only to refunds sought where the taxpayer has borne the actual economic burden of the tax, citing
State ex rel. Szabo Food Service, Inc.
v.
Dickinson,
We reject respondents’ intimation that the cost of any refund considered by the State might justify a decision to withhold it. Just as a State may not object to an otherwise available remedy providing for the return of real property unlawfully taken or criminal fines unlawfully imposed simply because it finds the property or moneys useful, so also Florida cannot object to a refund here just because it has other ideas about how to spend the funds.
The State is free, of course, to provide broader relief as a matter of state law than is required by the Federal Constitution. See
Bacchus Imports,