Constitutional Law I, Pages 346–347

Complete Auto Transit, Inc. v. Brady

1977

Facts:

Mississippi imposed a 5% tax on the appellant, a Michigan corporation which transported vehicles to Mississippi for GM. Appellant paid the tax and then sued for a refund.

Procedural History:

The Mississippi Supreme Court upheld the validity of the tax.

Issue:

Is Mississippi's tax valid under the dormant commerce clause?

Rule:

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[A] tax against Commerce Clause challenge [will be sustained] when the tax is

  1. 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.

Reasoning:

Google Scholar LogoPage 347

[N]o claim is made that the activity is not sufficiently connected to the State to justify a tax, or that the tax is not fairly related to benefits provided the taxpayer, or that the tax discriminates against interstate commerce, or that the tax is not fairly apportioned.

Holding:

Yes, Mississippi's tax is valid. Affirmed.


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