The Supreme Court will hear oral argument in the case involving the City of Valdez' attempt to tax vessels in its ports. The Court earlier granted the petition for a writ of certiorari to the Alaska Supreme Court (see my earlier post here).
The question presented is:
1. Whether a municipal personal property tax that falls exclusively on large vessels using the municipality’s harbor violates the Tonnage Clause of the Constitution, art. I, § 10, cl. 3.
2. Whether a municipal personal property tax that is apportioned to reach the value of property with an out-of-State domicile for periods when the property is on the high seas or otherwise outside the taxing jurisdiction of any State violates the Commerce and Due Process Clauses of the Constitution.
Polar Tankers, a vessel operator in Valdez, petitioned the Supreme Court to overturn the Alaska Supreme Court decision which found that Valdez' tax did not constitute a violation of the tonnage clause of the U.S. Constitution. It further challenged the tax as violative of the Due Process clause because it taxed out of state property. Its opening brief is here.
The City of Valdez Answering Brief is here.
Several amici filed briefs supporting reversal, including, the Broadband Tax Institute (brief here)(supporting the out-of-state tax argument); the Council on State Taxation (brief here)(out-of-state tax argument); Tropical Shipping and Construction Company, Ltd. (brief here)(tonnage argument); World Shipping Council and Cruise Lines International Assn. (brief here)(tonnage argument); and the National Federation of Independent Business Small Business Legal Center (brief here)(out-of-state tax argument).
Oral Argument is set for April 1, 2009. Most tonnage clause precedent is from the 1800's, so either the Supreme Court wants to breathe new life into that oft-forgotten sword of federalism or the Court wants to address concerns about out-of-state taxation.
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