State Tax

Federal Constitutional Limitations on State Taxation (Portfolio 1400)

  • This Portfolio provides an overview of the federal limitations imposed on state taxation by the United States Constitution and by the federal statutes.


Tax Management Portfolio, Federal Constitutional Limitations on State Taxation analyzes the restraints on state taxation imposed by the Import–Export, Commerce, Due Process, Equal Protection, Privileges and Immunities, and Supremacy Clauses, and by the First Amendment.

This Portfolio also discusses taxpayer remedies for unconstitutional state taxes. In 1990, the United States Supreme Court, in McKesson Corp. v. Division of Alcoholic Beverages and Tobacco, 496 U.S. 18 (1990), held that a taxpayer who is compelled to pay a tax that is later held to be unconstitutional under established Commerce Clause principles is entitled to meaningful retroactive relief. That same year, a sharply divided Court, in American Trucking Associations, Inc. v. Smith, 496 U.S. 167 (1990), held that the taxpayers were entitled to meaningful retroactive relief only from the date of their earlier decision, which overturned past precedent in establishing the taxpayers’ substantive claim under the Commerce Clause. The ramifications of these decisions are discussed in this Portfolio.

Table of Contents

1400.01. Introduction
1400.02. The Import–Export Clause
1400.03. The Duty–of–Tonnage Prohibition
1400.04. The Commerce Clause
1400.05. The Due Process Clause
1400.06. The Equal Protection Clause
1400.07. The Privileges and Immunities Clause
1400.08. The Supremaccy Clause
1400.09. The First Amendment
1400.10. Taxpayer Remedies For Unconstitutional State Taxes

Walter Hellerstein
Professor of Law
University of Georgia School of Law
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