- State Taxation of Interstate Commerce – generally for a state tax to be valid:
- (1) it is reasonable and nondiscriminatory (satisfies commerce clause)
- (2) must be a substantial nexus between state interest and activity being taxed. (satisfies due process clause).
- General principles:
- GOODS which are in the stream of interstate commerce: MAY NOT be taxed, however, they may be taxed at the beginning of transit, may also be taxed at end of transit – and if there is a break in transit.
- INSTRUMENTALITIES may be taxed provided the tax is fairly apportioned to the extent of taxpayer use. Taxpayer must acquire a taxable situs in the state. (
may tax Delta based on the # of planes and # of days logged in state). Georgia
- DIRECT TAXES must be apportioned. These are income taxes and property taxes.
- INDIRECT TAXES must be geographically uniform. These are sales taxes and use taxes.