OPINION OF THE COURT
This appeal presents a facial challenge to the constitutionality of portions of sections 301 and 301-a of the Tax Law that impose a tax measured by fuel consumption on vessels engaged in interstate commerce while operating in New York State waters. Because there are circumstances under which the statutes at issue could be constitutionally applied, we reverse the Appellate Division’s finding of unconstitutionality and reject the intervenors’ facial challenge.
*446 I.
In June of 1998, petitioner Moran commenced this CPLR article 78 proceeding seeking, in relevant part, to overturn the Department of Taxation and Finance’s decision denying its request for a refund of taxes paid under article 13-A of the Tax Law. Moran also challenged, as facially unconstitutional under the Commerce Clause (US Const, art I, § 8 [3]), those portions of Tax Law §§ 301 and 301-a (hereafter the petroleum business tax or PBT) imposing a tax on fuel imported by a vessel for its consumption within the state while engaged in interstate commerce. Moran further contested the Legislature’s retroactive application of the 1997 amendments to the PBT. Eklof and Reinauer, 1 similarly denied refunds of taxes paid pursuant to the PBT, were granted permission to intervene in March of 1999.
Intervenor Eklof is a New York corporation with its principal place of business in Staten Island. Intervenor Reinauer was a New York corporation until 1993, when it became a Delaware limited partnership. Reinauer maintains its principal office in Staten Island. The intervenors operate tugboats and barges transporting cargo throughout the waters of the east coast, including the waters of New York. 2
Supreme Court granted the Commissioner’s motion to dismiss the petition for failure to exhaust administrative remedies. The court also found that the 1997 amendments to the PBT creating a retroactive adjustment to the Tax Law did not contravene the Due Process Clause of the 14th Amendment to the United States Constitution. On appeal, the Appellate Division reversed and declared the tax on the consumption of fuel in section 301 (a) (1) (ii) and section 301-a (b) (2) and (c) (1) (B) of the Tax Law facially unconstitutional under the Commerce Clause (
Subsequently, the Commissioner moved in Supreme Court for a final judgment consistent with the Appellate Division order. Eklof and Reinauer cross-moved for an order granting a refund of taxes paid and attorneys’ fees. The court reluctantly granted the Commissioner’s motion for an order declaring Tax Law § 301 (a) (1) (ii), § 301-a (b) (2) and § 301-a (c) (1) (B) facially unconstitutional. Supreme Court denied the intervenors’ claim for tax refunds for their failure to exhaust administrative remedies and denied the application for attorneys’ fees. The Commissioner appeals as of right on constitutional grounds from the judgment of Supreme Court, bringing up for review the nonfinal order of the Appellate Division. We now reverse.
II.
The PBT imposes a tax on petroleum businesses “for the privilege of engaging in business, doing business, employing capital, owning or leasing property, or maintaining an office in this state” (Tax Law § 301 [a] [1]; § 301-a [a]). Intervenors qualify as petroleum businesses under section 300 (b) (1) (i) of the Tax Law as businesses that cause fuel to be imported into the state for their own use.
From 1984 through August of 1990, an annual “privilege tax” was imposed on each petroleum business calculated as a percentage of “the consideration given or contracted to be given by it for petroleum * * * which it imported or caused to be imported * * * into this state for consumption by it in this state” (Tax Law § 301 [a] [1] [ii]). The statute further provides that “[a] petroleum business, which brings petroleum into this state in the fuel tank connecting with the engine of a vessel propelled by the use of such petroleum” shall receive a credit equal to the amount of gallons of fuel purchased in New York against the total gallons consumed by the business in New York (Tax Law § 301 [c]).
Since September 1990, the “privilege tax” is a monthly tax calculated on a cents-per-gallon basis (see Tax Law § 301-a). The statute now provides that “fuel brought into this state in the fuel tank connecting with the engine of a vessel propelled by the use of such motor fuel shall be deemed to constitute a taxable use of motor fuel * * * to the extent that the fuel is consumed in the operation of the vessel in this state” (Tax Law *448 § 301-a [b] [2]; see Tax Law § 301-a [c] [1] [B]). 3 Section 301-a also provides a credit for the fuel a petroleum business has purchased in New York (see Tax Law § 301-a [b] [2]; [c] [1] [B]).
These statutes reflect the amendments enacted in 1997 in response to
Matter of Tug Buster Bouchard Corp. v Wetzler
(
III.
At the outset, we note that interveners are making a facial challenge to the constitutionality of the PBT. In order to prevail, they must surmount the presumption of constitutionality accorded to legislative enactments by proof “beyond a reasonable doubt”
(see LaValle v Hayden,
Early United States Supreme Court decisions held that states were unable to impose direct taxes on interstate commerce
(see e.g. Helson v Kentucky,
Currently, a four-prong test is in place to determine whether a state tax imposed upon interstate commerce will survive a
*449
challenge under the Commerce Clause. The validity of the tax will be upheld “[1] when the tax is applied to an activity with a substantial nexus with the taxing State, [2] is fairly apportioned, [3] does not discriminate against interstate commerce, and [4] is fairly related to the services provided by the State”
(Complete Auto,
Intervenors’ primary argument is that the fuel consumed in interstate commerce can never have a nexus with a taxing state because it does not “come to rest” within the state. For this proposition, they rely on a line of cases decided prior to
Complete Auto (see Helson v Kentucky,
We have previously addressed what constitutes a substantial nexus for the purpose of Commerce Clause analysis in the context of sales and use taxes
(see Matter of Orvis Co. v Tax Appeals Trib.,
Other states have also addressed the nexus
prong of
the
Complete Auto
test. While not binding, these cases inform our inquiry. In
Western Md. Ry. Co. v Goodwin
(167 W Va 804,
The Supreme Court of Iowa, addressing whether a state excise tax discriminated against railroads, compared a sales tax levied on fuel purchased within the state for use by barges with the excise tax imposed on railroads
(see Atchison, Topeka & Santa Fe Ry. Co. v Bair,
These decisions support our conclusion that the
Complete Auto
test is the appropriate test to determine whether these statutes violate the Commerce Clause. Further, consistent with our decision in
Orvis,
they support the conclusion that physical presence of a business in this state is sufficient to constitute a “substantial nexus” with the state under
Complete Auto.
The fact that the tax is measured by the consumption of fuel within the state does not alter the State’s authority to tax the privilege of doing business in New York.
*451
Eklof and Reinauer also argue that a tax on a medium of interstate commerce is not permitted (see
Quill Corp. v North Dakota,
IV.
Thus, intervenors’ facial constitutional challenge must fail because there is a set of circumstances under which the statute would be valid. A sufficient nexus would exist where the entity being taxed was, for example, a New York corporation, with offices in the state, employing New York citizens and conducting business in the state. This set of facts would constitute a physical presence that is more than a “slightest presence” in New York. Therefore, we conclude that a substantial nexus could exist such that the first prong of the Complete Auto test would be satisfied and the statute could survive a facial constitutional challenge.
Intervenors further argue that the retroactive application of the 1997 amendments to the statutes is a due process violation. We remit this issue, and any other issues raised but not determined by the Appellate Division, to that Court for its consideration.
Accordingly, the judgment appealed from, and the order of the Appellate Division brought up for review, should be reversed, with costs, and the matter remitted to that Court for further proceedings in accordance with this opinion.
Chief Judge Kaye and Judges Smith, Wesley, Rosenblatt, Graffeo and Read concur.
Judgment appealed from and order of the Appellate Division brought up for review reversed, etc.
Notes
. The intervenors are comprised of Eklof Marine Corporation, its affiliated companies and Reinauer Transportation Companies, L.P.
. Petitioner Moran Towing Corporation, also a New York corporation, withdrew from this action at the Appellate Division in order to pursue its administrative remedies.
. Those portions of Tax Law § 301-a that apply to nonvessels provide that the fuel must “have previously come to rest within the meaning of federal decisional law interpreting the United States constitution” to be taxable (Tax Law § 301-a [b] [1]; [c] [1] [A], [B] [2]; [d]).
. The 2000 amendment to Tax Law § 301-a is not relevant for the purposes of this appeal.