Dissenting Opinion
with whom Justice Ginsburg joins, dissenting.
The Court today holds a federal statute unconstitutional without giving heed to the simplest reason for sustaining it. We granted certiorari on the question “[w]hether, as applied to casualty insurance for losses incurred during the shipment of goods from locations within the United States to purchasers abroad, the tax imposed by Section 4371 of the Internal Revenue Code violates the Export Clause of the Constitution of the United States (U. S. Const. Art. I, §9, Cl. 5),” Pet. for Cert. I. A straightforward answer to the question presented requires us to address the narrow issue of the continuing validity of our holding in Thames & Mersey Marine Ins. Co. v. United States,
Rejecting this course, the Court ventures upon a broad constitutional inquiry not even implicated by the statute. To do so, it rewrites the question presented. In the first sentence of the opinion, the Court says, “We resolve in this case whether the Export Clause of the Constitution permits the imposition of a generally applicable, nondiscriminatory
HH
We consider a rather simple federal tax. Section 4371 of the Internal Revenue Code imposes a tax of “4 cents on each dollar, or fractional part thereof, of the premium paid on the policy of casualty insurance or the indemnity bond, if issued to or for, or in the name of, an insured . . . 26 U. S. C. §4371(1) (1982 ed.). The term “insured” is defined to include any “domestic corporation or partnership, or an individual resident of the United States, against, or with respect to, hazards, risks, losses, or liabilities wholly or partly within the United States .. .§ 4372(d)(1). The statute does not discriminate against exports. Indeed, it does not even mention them. The tax must be paid not only by domestic tradj-ers but also by any insured, even an individual, who is cov
Resolution of the case requires us to determine whether the Export Clause has any bearing on taxes on services like insurance provided to exporters, where the service itself is not exported. The plain text of the Clause casts much doubt on the proposition. It states: “No Tax or Duty shall be laid on Articles exported from any State,” U. S. Const., Art. I, §9, el. 5. The majority avoids this necessary question by asserting that the Government failed to argue the point and so abandoned it. Ante, at 855, and n. 3. True, the Government defends § 4371 on the ground that it does not discriminate between exports and other forms of trade, but this is not a concession that there is no distinction between a tax on insurance premiums and a tax on goods. In fact, the Government makes repeated references to the distinction in its briefs, albeit in the context of discussing the nondiscriminatory character of § 4371. See, e. g., Brief for United States 12-13 (The tax “does not apply specifically to export transactions; to the contrary, it applies only to insurance risks that are either ‘wholly’ or ‘partly’ domestic”); id., at 15 (“The tax imposed by Section 4371 of the Internal Revenue Code is not specifically directed to nor directly ‘laid on Articles exported’ (U. S. Const. Art. I, § 9, Cl. 5). Instead, it applies to insurance premiums paid to foreign insurers for many forms of insurance, including any casualty risk that is ‘wholly or partly within the United States’ (26 U. S. C. § 4372(d)(1))”); id., at 34 (“Even as applied to casualty insurance, the tax
At oral argument, the Assistant to the Solicitor General acknowledged that he had not made a separate argument based on the distinction between export goods and services related to the exporting process. He explained that the nondiscrimination theory had greater utility, sparing courts the nettlesome inquiry into what is an export. Tr. of Oral Arg. 9. When asked why the Government was avoiding the simpler and clearer argument that § 4371 was just a tax on foreign insurers to offset the tax burdens borne by domestic insurers, he responded, “We do not mean to avoid that argument. That’s part of our argument of why this is a tax of general application.” Id., at 12. Later in oral argument, he stated that “it’s problematic to describe a tax on insurance as a tax on the good,” and cited that problem as a reason for calling into question our decision in Thames & Mersey. Tr. of Oral Arg. 40. When asked if his position had foreclosed us from deciding the case on that basis, he responded: “I don’t believe you’re foreclosed ... by our concession from addressing that issue as you see fit.” Ibid. We have relied on statements more equivocal than this to reconsider and overrule a bad precedent even when the parties in their briefs had argued that the precedent should be upheld. See Blonder-Tongue Laboratories, Inc. v. University of Ill. Foundation,
The Court’s faulty characterization of the Government’s argument leads it down some odd byways. For example, in Part III-B-3, the Court rejects the Government’s attempt to rely upon Department of Revenue of Wash. v. Association of Wash. Stevedoring Cos.,
Even were we to suppose that the Government did not argue the goods and services distinction, the prudential rule against deciding a case on an unargued theory is in any event not absolute. See Arcadia v. Ohio Power Co.,
To give Congress the respect it is owed, we must decide whether the statute is in fact unconstitutional as applied, not make the borderline call that the Government’s litigation position bars us from reaching a question which, as the Court seems to agree, is presented by the case. In interpreting statutes, for example, we have long observed “[t]he elementary rule . . . that every reasonable construction must be resorted to, in order to save a statute from unconstitutionality.” Hooper v. California,
“This approach not only reflects the prudential concern that constitutional issues not be needlessly confronted, but also recognizes that Congress, like this Court, is bound by and swears an oath to uphold the Constitution. The courts will therefore not lightly assume that Congress intended to infringe constitutionally protected liberties or usurp power constitutionally forbidden it.” Edward J. DeBartolo Corp. v. Florida Gulf Coast Building & Constr. Trades Council,485 U. S. 568 , 575 (1988).
We have not considered ourselves foreclosed from adopting saving constructions the parties failed to suggest. See, e. g., Panama R. Co. v. Johnson,
There may be instances, even in constitutional cases, when we should eschew alternative theories for sustaining a statute. For example, we might do so if the theories depend upon different provisions of law or require factual development and legal analysis far afield from that done by the parties or the courts below. That is not this case. The question whether the Export Clause applies to taxes on distinct export-related services requires most of the same inquiries the majority undertakes: construing the text of the Export Clause, considering its history and purpose, and reviewing our precedents. It also requires explicit reexamination of the reasoning of Thames & Mersey Marine Ins. Co. v. United States,
There is not, as the Court intimates, ante, at 855, a need for statistical development of the relative incidence of this tax on exporters, unless the Court (as appears unlikely) is interested in the statistics from 1942 to determine if the statute was a pretext when it was enacted. The current incidence of the tax on exporters, whatever it is, will reflect market conditions in light of the operation of this tax over more than 50 years, including the strength of foreign insur
In Massachusetts v. United States,
Quite apart from the unnecessary judgment that an Act of Congress is unconstitutional as applied, today’s decision adds significant complexity to the administration of §4371. Under the thumb of the Court’s holding that all premiums paid to insure export goods are exempt from § 4371, but also under the statutory mandate to collect the tax in all other instances, the Internal Revenue Service (IRS) henceforth finds itself faced with an array of new problems unexplained and unmentioned by the Court. Insurance is one of the
Commercial inland marine transit insurance, the form of casualty insurance which covers domestic transportation of goods, “is usually written on an open basis, under which all shipments of the kind of merchandise described in the policy are covered.” Holtom, supra, at 435. It would appear, from today’s decision, that if a company has an open policy from a foreign insurer covering the domestic leg of the journey for all shipments, the IRS must untangle what portion of the insurance covered goods that had commenced the process of exportation, and then prorate the tax. So too would proration (or some other accommodation) appear necessary if the policy is taken out on a single shipment but part of the shipment is delivered within the country and part abroad.
In addition, the Court’s decision draws the IRS into the factual morass of determining when exportation has begun. That will often be less clear than it is here. For example, a company may have its own trucks carry goods to a freight forwarder or port, or a hiatus in the journey might be extensive enough to remove the goods from the export stream, see Joy Oil Co. v. State Tax Comm’n,
The severity of these administrative burdens will depend in part upon the penetration of the domestic market by foreign insurers in certain lines. We can anticipate increased burdens with the 4% price cut in foreign insurance for exporters that results from today’s decision. The Court is wrong to frustrate the will of Congress by giving exporters an undeserved exemption from § 4371 and by adding needless complexity to the administration of the statute, all upon the incorrect, unexamined assumption that the tax is on exported goods.
II
Turning to the question that I take to be dispositive, I would hold that the Export Clause does not apply to §4371. The text and history of the Clause, and its interpretation by the Fifth Congress, suggest that taxes on insurance do not fall within its prohibitions. Because §4371 taxes a service distinct from the actual export of the goods, and does not
In my view, the Framers understood the Export Clause to prohibit what its text says: any federal tax “laid on Articles exported,” U. S. Const., Art. I, § 9, cl. 5, not taxes on services like insurance that may have indirect effect on the cost of exporting. There was a history of nations’ imposing onerous taxes on exported goods, even in England until the rise of mercantilist trade policy resulted in the repeal of most export taxes by the end of the 17th century, see W. Kennedy, English Taxation 1640-1799, p. 35 (1913). And specific taxes on exported goods were the only taxes mentioned in the debate at the Constitutional Convention over the Export Clause. For example, Gouverneur Morris of Pennsylvania, opposing the Clause, favored taxing exports as an alternative to direct taxes on individuals.
“He considered the taxing of exports to be in many cases highly politic. Virginia has found her account in taxing Tobacco. All Countries having peculiar articles tax the exportation of them; as France her wines and brandies. A tax here on lumber, would fall on the W. Indies & punish their restrictions on our trade. The same is true of live-stock and in some degree of flour. In case of a dearth in the West Indies, we may extort what we please. Taxes on exports are a necessary source of revenue. For a long time the people of America will not have money to pay direct taxes. Seize and sell their effects and you push them into Revolts.” 2 M. Farrand, Records of the Federal Convention of 1787, p. 307 (rev. ed. 1966).
See also id., at 306 (Mr. Madison: taxes on exported goods, like tobacco, in which Americans were unrivalled would shift the tax burden to foreigners); id., at 360 .(Gouverneur Morris: taxes on goods are essential to embargoes, while taxes on
In interpreting constitutional restrictions on the taxing power, we must recall that the want of this power in the National Government was one of the great weaknesses of the Articles of Confederation. With its expenses outpacing revenues from requisitions from the States, the central Government had emptied its vaults by 1782 and soon defaulted on its substantial debt. R. Paul, Taxation in the United States 4-5 (1954). As the Convention records indicate, depriving the Federal Government of the power to tax even export goods was a contentious issue, given the concern that it would cut off a needed source of revenue as well as disable Congress from using export taxes as an instrument of policy. Madison’s last-minute proposal that the Export Clause’s total prohibition on taxing exports be replaced with a provision
There is other compelling historical evidence weighing against Thames & Mersey’s view of the Export Clause as a prohibition extending even to taxes on services that have the indirect effect of raising exportation costs. In 1797 the Fifth Congress passed “An Act laying Duties on stamped Vellum, Parchment and Paper.” Among its provisions was a stamp duty upon
“any policy of insurance or instrument in nature thereof, whereby any ships, vessels or goods going from one district to another in the United States, or from the United States to any foreign port or place, shall be insured, to wit, if going from one district to another in the United States, twenty-five cents; if going from the United States to any foreign port or place, when the sum for which insurance is made shall not exceed five hundred dollars, twenty-five cents; and when the sum insured shall exceed five hundred dollars, one dollar . . . .” Act of July 6, 1797, ch. 11, § 1, 1 Stat. 527.
The duties survived until the unpopular Federalist tax system, which was felt to bear too heavily upon those least able to pay, was abolished soon after Jefferson took office. See Paul, supra, at 6.
We have always been reluctant to say a statute of this early origin offends the Constitution, absent clear inconsistency. See Knowlton v. Moore,
In Fairbank v. United States,
There is no need to reconsider Fairbank, nor to distinguish it by sole reliance upon the interpretation offered in Washington Stevedoring, which observed that the stamp duty at issue in Fairbank “effectively taxed the goods because the bills represented the goods,”
Turning once more to Thames & Mersey, I note the 1797 statute was neither briefed to the Court there nor discussed in its opinion. The Court, furthermore, did not examine the text or history of the Export Clause, relying instead on the broad theory of the Clause espoused in the companion case, United States v. Hvoslef,
Besides failing to consider the evidence just cited, the Thames & Mersey Court relied in part on the theory that insurance is not commerce and so, by implication, the regulatory aspect of the tax could not be justified as an exercise of Congress’ Commerce Clause power. See Thames & Mersey, supra, at 25, citing Paul v. Virginia,
We have discarded, in Import-Export Clause cases, the idea afoot in Hvoslef and Thames & Mersey that a tax on services necessary to the export process is equivalent to a tax on goods. In Canton R. Co. v. Rogan,
The Court’s effort to justify its decision on the grounds of stare decisis, ante, at 856, is unconvincing. Stare decisis does not protect a constitutional decision where the reasoning is as poor as it is in Thames & Mersey, see Smith v. Allwright,
As we move to a more service-intensive and export-oriented economy, and as policymakers and experts debate
The protections of the Export Clause must extend, perhaps, somewhat beyond specific taxes on goods, for “[i]f it meant no more than that, the obstructions to exportation which it was the purpose to prevent could readily be set up by legislation nominally conforming to the constitutional restriction but in effect overriding it.” Hvoslef, supra, at 13. As a result, the Court has found certain taxes to be proxies for taxes on the goods. See Washington Stevedoring, supra, at 756, n. 21 (discussing sales tax struck down in Richfield Oil Corp. v. State Bd. of Equalization,
The insurance premiums taxed here, like those taxed in Thames & Mersey, bear some relation to the value of the goods, but this does not make them a proxy for a tax on the goods. Premiums, i. e., the price of insurance, depend on risk of loss, and value of the goods is only one component factor of risk. So much is made clear by Stipulation 16 in
Section 4371’s requirement that the insurance cover domestic risks in whole or in part is further evidence that Congress did not intend it to operate as a proxy for taxing exports. A statute that exempts all exporters who use a
I would uphold § 4371 as applied to IBM because the statute imposes a tax on a distinct export-related service and is not a proxy for a tax on the exports themselves. The Court, in my view, makes a serious mistake in assuming the opposite and reaching the question whether a nondiscriminatory tax on goods violates the Export Clause. I would reverse the judgment of the Court of Appeals for the Federal Circuit.
Lead Opinion
delivered the opinion of the Court.
We resolve in this case whether the Export Clause of the Constitution permits the imposition of a generally applicable, nondiscriminatory federal tax on goods in export transit. We hold that it does not.
I
Section 4371 of the Internal Revenue Code imposes a tax on insurance premiums paid to foreign insurers that are not subject to the federal income tax.
IBM filed federal excise tax returns for the years 1975 through 1984, but reported no liability under §4371. The Internal Revenue Service (IRS) audited IBM and determined that the premiums paid to foreign insurers were taxable under § 4371 and that IBM — as a named beneficiary of the insurance policies — was liable for the tax. The IRS assessed a tax against IBM for each of those years.
IBM paid the assessments and filed refund claims, which the IRS denied. IBM then commenced suit in the Court of
HH H-l
The Export Clause states simply and directly: “No Tax or Duty shall be laid on Articles exported from any State.” U. S. Const., Art. I, § 9, cl. 5. We have had few occasions to interpret the language of the Export Clause, but our cases have broadly exempted from federal taxation not only export goods, but also services and activities closely related to the export process. At the same time, we have attempted to limit the term “Articles exported” to permit federal taxation of pre-export goods and services.
Our early cases upheld on facture of particular products ultimately intended for export by finding that pre-export products are not “Articles exported.” See Pace v. Burgess,
In Cornell, the Court addressed whether the Export Clause prohibited application of a federal excise tax on filled cheese manufactured under contract for export. Looking to the analysis set out in Turpin, we rejected the contention that the Export Clause bars application of a nondiscriminatory tax imposed before the product entered the course of exportation. “The true construction of the constitutional provision is that no burden by way of tax or duty can be cast upon the exportation of articles, and does not mean that articles exported are relieved from the prior ordinary burdens of taxation which rest upon all property similarly situ
At the same time we were defining a domain within which nondiscriminatory taxes could permissibly be imposed on goods intended for export, we were also making clear that the Export Clause strictly prohibits any tax or duty, discriminatory or not, that falls on exports during the course of exportation. See Fairbank v. United States,
“The requirement of the Constitution is that exports should be free from any governmental burden. The language is ‘no tax or duty.’ Whether such provision is or is not wise is a question of policy with which the courts have nothing to do. We know historically that it was one of the compromises which entered into and made possible the adoption of the Constitution. It is a restriction on the power of Congress . . . .”181 U. S., at 290 .
Hvoslef and Thames & Mersey differed from Fairbank in that the taxes imposed in those cases — on ship charters and marine insurance, respectively — did not facially discriminate against exports. The Court nonetheless prohibited the application of those generally applicable, nondiscriminatory
Shortly after Hvoslef and Thames & Mersey, the Court rejected an attempt to shield from taxation the net income of a company engaged in the export business. William E. Peck & Co. v. Lowe,
Only a few years later the Court struck down the application of a tax on the export sale of certain baseball equipment. See A. G. Spalding & Bros. v. Edwards,
The Court has strictly enforced the Export Clause’s prohibition against federal taxation of goods in export transit, and we have extended that protection to certain services and activities closely related to the export process. We have not,
III
The Government concedes, as it did below, that this ease is largely indistinguishable from Thames & Mersey and that, if Thames & Mersey is still good law, the tax assessed against IBM under §4371 violates the Export Clause. See Tr. of Oral Arg. 5;
The Government asserts that the Export Clause permits the imposition of generally applicable, nondiscriminatory taxes, even on goods in export transit. The Government urges that we have.historically interpreted the Commerce, Import-Export, and Export'Clauses in harmony and that we have rejected the. theory underlying Thames & Mersey in the context of the^Gommerce and Import-Export Clauses. Accordingly, the Government contends that our Export Clause jurisprudence, symbolized by Thames & Mersey, has become an anachronism in need of modernization. The Government asks us to reinterpret the Export Clause to permit the imposition of generally applicable, nondiscriminatory taxes as we have under the Commerce Clause and, it argues, under the Import-Export Clause.
A
The Government contends that our dormant Commerce Clause jurisprudence has shifted dramatically and that our traditional understanding of the Export Clause, which is based partly on an outmoded view of the Commerce Clause, can no longer be justified. It is true that some of our early Export Clause cases relied on an interpretation of the
Our rejection in Complete Auto of much of our early dormant Commerce Clause jurisprudence did not, however, signal a similar rejection of our Export Clause cases. Our decades-long struggle over the meaning of the nontextual negative command of the dormant Commerce Clause does not lead to the conclusion that our interpretation of the textual command of the Export Clause is equally fluid. At one time, the Court may have thought that the dormant Commerce Clause required a strict ban on state taxation of interstate commerce, but the text did not require that view.
B
The Government’s primary assertion is that modifications in our Import-Export Clause jurisprudence require parallel modifications in the Export Clause context. More specifically, the Government argues that our decisions in Michelin Tire Corp. v. Wages,
The Import-Export Clause, which is textually similar to the Export Clause, says in relevant part, “No State shall... lay any Imposts or Duties on Imports or Exports.” U. S. Const., Art. I, § 10, cl. 2. Though minor textual differences exist and the Clauses are directed at different sovereigns, historically both have been treated as broad bans on taxation of exports, and in several cases the Court has interpreted the provisions of the two Clauses in tandem. For instance, in the Court’s first decision interpreting the Import-Export Clause, Chief Justice Marshall said:
*853 “The States are forbidden to lay a duty on exports, and the United States are forbidden to lay a tax or duty on articles exported from any State. There is some diversity in language, but none is perceivable in the act which is prohibited.” Brown v. Maryland,12 Wheat. 419 , 445 (1827).
See also Kosydar v. National Cash Register Co.,
In Michelin, we addressed whether a State could impose a nondiscriminatory ad valorem property tax on imported goods that were no longer in import transit. Michelin, which imported tires from Canada and France and stored them in a warehouse, argued that Georgia could not constitutionally assess ad valorem property taxes against its imported tires. We explained that “[t]he Framers of the Constitution . . . sought to alleviate three main concerns”: (i) ensuring that the Federal Government speaks with one voice when regulating foreign commerce; (ii) preserving import revenues as a major source of federal revenue; and (iii) preventing disharmony likely to be caused if seaboard States taxed goods coming through their ports. Michelin, supra, at 285-286. The Court found that nondiscriminatory ad valorem taxes violate none of these policies. A century earlier, however, the Court had ruled that, under the “original package doctrine,” a State could not impose such a tax until the goods had lost their character as imports and had been incorporated into the mass of property in the State. Low v. Austin,
Two years later, in Washington Stevedoring, we upheld against an Import-Export Clause challenge a nondiscriminatory state tax assessed against the compensation received by stevedoring companies for services performed within the State. The Court found that Washington’s stevedoring tax did not violate the policies underlying the Import-Export Clause. Unlike the property tax at issue in Michelin, the activity taxed by Washington occurred while imports and exports were in transit. That fact was not dispositive, however, because the tax did not fall on the goods themselves:
“The levy reaches only the business of loading and unloading ships or, in other words, the business of transporting cargo within the State of Washington. Despite the existence of the first distinction, the presence of the second leads to the conclusion that the Washington tax is not a prohibited ‘Impost or Duty’ when it violates none of the policies [that animate the Import-Export Clause].” Washington Stevedoring, supra, at 755.
Relying on Canton R. Co. v. Rogan,
1
A tax on policies insuring exports is not, precisely speaking, the same as a tax on exports, but Thames & Mersey held that they were functionally the same under the Export Clause. We noted in Washington Stevedoring that one may question the finding in Thames & Mersey that the tax was
Stare decisis is a “principle of policy,” Helvering v. Hallock,
Though from time to time we have overruled governing decisions that are “unworkable or are badly reasoned,” Payne, supra, at 827; see Smith v. Allwright,
What the Government does argue is that our Import-Export Clause cases require us to overrule Thames & Mersey.
The distinction between imposts or duties and taxes is especially pertinent in light of the peculiar definitional analysis we chose in Michelin. Finding substantial ambiguity in the phrase “Imposts or Duties,” we “decline[d] to presume it was intended to embrace taxation that does not create the evils the Clause was specifically intended to eliminate.”
It is not intuitively obvious that Michelin’s three-pronged analysis of the Framers’ concerns is really just another way of stating a nondiscrimination principle. But even if it were, the Government cannot reasonably rely on Michelin to govern the Export Clause because Michelin drew its analysis around the phrase “Imposts or Duties” and expressly ex-
We are similarly hesitant to adopt the Import-Export Clause’s policy-based analysis without some indication that the Export Clause was intended to alleviate the same “evils” to which the Import-Export Clause was directed. Unlike the Import-Export Clause, which was intended to protect federal supremacy in international commerce, to preserve federal revenue from import duties and imposts, and to prevent coastal States with ports from taking unfair advantage of inland States, see Michelin, supra, at 285-286, the Export Clause serves none of those goals. Indeed, textually, the Export Clause does quite the opposite. It specifically prohibits Congress from regulating international commerce through export taxes, disallows any attempt to raise federal revenue from exports, and has no direct effect on the way the States treat imports and exports.
As a purely historical matter, the Export Clause was originally proposed by delegates to the Federal Convention from the Southern States, who feared that the Northern States would control Congress and would use taxes and duties on exports to raise a disproportionate share of federal revenues from the South. See 2 M. Farrand, The Records of the Federal Convention of 1787, pp. 95, 305-308, 359-363 (rev. ed. 1966). The Government argues that this “narrow historical purpose” justifies a narrow interpretation of the text and that application of §4371 to policies insuring exports does not conflict with the policies embodied in the Clause. Brief for United States 32-34. While the original impetus may
The Government argued for a different narrow interpretation of the Export Clause in Fairbank. See
“If mere discrimination between the States was all that was contemplated, it would seem to follow that an ad valorem tax upon all exports would not be obnoxious to this constitutional prohibition. But surely under this limitation Congress can impose an export tax neither on one article of export, nor on all articles of export.” Ibid.
As in Fairbank, we think the text of the constitutional provision provides a better decisional guide than that offered by
3
Even assuming that Michelin and Washington Stevedoring govern our Export Clause inquiry in this case, the Government’s argument falls short of its goal. Our holdings in Michelin and Washington Stevedoring do not reach the facts of this case and, more importantly, do not interpret the Import-Export Clause to permit assessment of nondiscriminatory taxes on imports and exports in transit. Michelin involved a tax on goods, but the goods were no longer in transit. The tax in Washington Stevedoring burdened imports and exports while they were still in transit, but it did not fall directly on the goods themselves. This case, as it comes to us, is a hybrid in which the tax both burdens exports during transit and — as the Government concedes and our earlier cases held — is essentially a tax on the goods themselves. The Government argues that Michelin and Washington Stevedoring by analogy permit Congress to impose generally applicable, nondiscriminatory taxes that fall directly on exports in transit. Brief for United States 32 (Michelin and Washington Stevedoring “demonstrate that, when a generally applicable, nondiscriminatory tax is at issue, the mere fact that the tax applies also to goods that are in the export or import process does not provide a constitutional immunity from taxation”). If this contention is to succeed, the Government at the very least must show that our Import-Export Clause jurisprudence now permits a
The Court has never upheld a state tax assessed directly on goods in import or export transit. In Michelin, we suggested that the Import-Export Clause would invalidate application of a nondiscriminatory property tax to goods still in import or export transit.
We also declined to endorse the Government’s theory in Washington Stevedoring. After reciting that the Court in Canton R. Co. had distinguished Thames & Mersey, Fair-bank, and Richfield Oil, we pointed out that in those cases “the State [or Federal Government] had taxed either the goods or activity so connected with the goods that the levy amounted to a tax on the goods themselves.” Washington Stevedoring,
We conclude that the Export Clause does not permit assessment of nondiscriminatory federal taxes on goods in export transit. Reexamination of the question whether a particular assessment on an activity or service is so closely connected to the goods as to amount to a tax on the goods themselves must await another day. We decline to overrule Thames & Mersey. The judgment of the Court of Appeals for the Federal Circuit is affirmed.
It is so ordered.
Notes
The tax does not apply if a policy issued by a foreign insurer is “signed or countersigned by an officer or agent of the insurer in a State, or in the District of Columbia, within which such insurer is authorized to do business.” 26 U. S. C. §4373(1) (1982 ed.).
The Commerce Clause is an express grant of power to Congress to “regulate Commerce ... among the several States.” U. S. Const., Art. I, § 8, cl. 3. It does not expressly prohibit the States from doing anything,
The Court has never held that the Export Clause prohibits only direct taxation of goods in export transit. In Brown v. Maryland,
The dissent suggests that “the Court assumes the statute to be invalid rather than deciding it to be so.” Post, at 864. We make no such assumptions. Rather, we begin with a longstanding decision that, by all accounts, controls this case. Even the Government agrees that Congress enacted a law whose application in this case directly contravenes our hold
The dissent suggests that we make a “serious mistake” in deciding whether a nondiscriminatory tax on goods violates the Export Clause, post, at 881. We do not agree that it is a mistake to address the arguments actually advanced by the parties.
Though Michelin discusses “taxes” in terms of “every exaction,”