United States v. United States Tax Comm’n, 412 U.S. 363 (1973)

United States v. United States Tax Commission

No. 72-350

Argued March 19, 1973
Decided June 4, 1973
412 U.S. 363

APPEAL FROM THE UNITED STATE DISTRICT COURT

FOR THE SOUTHERN DISTRICT OF MISSISSIPPI

Syllabus

The United States brought this action contesting the validity of appellee Tax Commission’s regulation requiring out-of-state liquor distillers and suppliers to collect and remit to the Commission a wholesale markup on liquor sold to military officers’ clubs and other nonappropriated fund activities located on bases within Mississippi, over two of which the United States exercises exclusive jurisdiction, and the remaining two of which concurrent jurisdiction. Relying on the Twenty-first Amendment, the District Court upheld the regulation.

Held:

1. The Twenty-first Amendment does not empower a State to tax or otherwise regulate the importation of distilled spirits into a territory over which the United States exercises exclusive jurisdiction, Collins v. Yosemite Park & Curry Co., 304 U.S. 518, regardless of whether some of the liquor may have been consumed off base. Pp. 369-378.

2. Whether the markup can be viewed as a sales tax to whose imposition in the context of the two exclusive jurisdiction bases the United States has consented under the Buck Act and whether, in any event, the markup unconstitutionally taxes federal instrumentalities, and violates the Supremacy Clause as conflicting with federal procurement regulations and policy are issues that the District Court did not reach and should consider initially on remand. Pp. 378-381.

340 F.Supp. 903, vacated and remanded.

MARSHALL, J., delivered the opinion of the Court, in which BURGER, C.J., and BRENNAN, STEWART, WHITE, BLACKMUN, and POWELL, JJ., joined. DOUGLAS, J., filed a dissenting opinion, in which REHNQUIST, J., joined, post, p. 381.