Amer. Trucking Assns. v. Scheiner, 483 U.S. 266 (1987)

American Trucking Associations, Inc. v. Scheiner

No. 86-357

Argued April 28, 1987
Decided June 23, 1987
483 U.S. 266

APPEAL FROM THE SUPREME COURT OF PENNSYLVANIA

Syllabus

This case presents the question whether the Commerce Clause of the Federal Constitution is violated by two Pennsylvania statutes which impose lump-sum annual taxes on the operation of trucks on Pennsylvania’s highways. One challenged statute requires that an identification marker be affixed to every truck over a specified weight, and imposes an annual flat fee ($25 from 1980 through March 1983) for such marker. The statute exempts trucks registered in Pennsylvania by providing that the marker fee shall be deemed a part of the vehicle registration fee (which was increased when the $25 marker fee was enacted). The marker fee was reduced to $5 (the administrative cost of issuing the marker) in 1982, when Pennsylvania enacted the second challenged statute, which, in general, imposes an annual axle tax on all trucks over a specified weight using Pennsylvania highways, and is assessed at the rate of $36 per vehicle axle. The same statute that enacted the axle tax also reduced the registration fees for pertinent vehicle weight classes by the amount of the axle tax usually applicable to vehicles in such classes. Appellant organizations, which represent interstate motor carriers whose vehicles are registered outside of Pennsylvania and who paid the $25 marker fee while it was in effect and are subject to the axle tax, brought separate actions in the Commonwealth Court of Pennsylvania challenging the constitutionality of the $25 marker fee and of the axle tax on the ground, inter alia, that both taxes discriminated against interstate commerce, since the entire economic burden of each tax fell on out-of-state vehicles because the 1980 statute "deemed" the marker fee for Pennsylvania vehicles to be a part of the registration fee, and the 1982 legislation granted Pennsylvania vehicles a reduction in registration fees that offset the newly imposed axle tax. The court accepted appellants’ argument and held that the challenged taxes were unconstitutional. The Pennsylvania Supreme Court considered the cases together, and reversed.

Held:

1. The challenged taxes are unconstitutional, because the methods by which they are assessed discriminate against interstate commerce in a way that contradicts the Commerce Clause’s central purpose of guaranteeing a free trade area among States. The Clause prohibits a State, as here, from imposing a tax that places a much heavier burden on out-of-state businesses that compete in an interstate market than it imposes on its own residents who also engage in interstate commerce. The challenged taxes do not pass the "internal consistency" test, under which a state tax must be of a kind that, if applied by every jurisdiction, there would be no impermissible interference with free trade. The challenged taxes’ inevitable effect is to threaten the free movement of commerce by placing a financial barrier around Pennsylvania. Pp. 280-287.

2. The challenged taxes cannot be upheld on the ground that they reflect a reasonable charge for the privilege of using Pennsylvania’s roads when considered alongside the high price that Pennsylvania-based trucks pay in registration fees. There is no merit to the contention that the axle tax does not discriminate against interstate commerce because domestic trucks, through payment of the registration fees, pay a higher price to use Pennsylvania’s highways than those registered in other States. Pp. 287-289.

3. Nor can the challenged taxes be upheld on the ground that they are no different from flat user fees recently upheld in other cases. Evansville-Vanderburgh Airport Authority District v. Delta Airlines, Inc., 405 U.S. 707, and Commonwealth Edison Co. v. Montana, 453 U.S. 609, distinguished. Pp. 289-292.

4. Earlier cases that support a State’s authority to impose flat use taxes can no longer suffice to uphold flat taxes with the blatantly discriminatory consequences associated with Pennsylvania’s marker fee and axle tax. More recent decisions have rejected the approach to the Commerce Clause taken in the earlier cases that focused primarily on the character of the privilege, rather than the practical consequences of the tax. A flat tax may not be upheld merely because the particular formula by which its charges are reckoned extends the same nominal privilege to interstate commerce that it extends to in-state activities. Although out-of-state carriers obtain a privilege to use Pennsylvania’s highways that is nominally equivalent to that which local carriers receive, imposition of the challenged taxes for a privilege that is several times more valuable to a local business than to its out-of-state competitors is unquestionably discriminatory, and thus offends the Commerce Clause. While flat taxes may be valid when administrative difficulties make collection of more finely calibrated user charges impracticable, such justification is unavailable with regard to Pennsylvania’s unapportioned marker fee and axle tax. Pp. 292-297.

510 Pa. 430, 509 A.2d 838, reversed and remanded.

STEVENS, J., delivered the opinion of the Court, in which BRENNAN, WHITE, MARSHALL, and BLACKMUN, JJ., joined. O’CONNOR, J., filed a dissenting opinion, in which REHNQUIST, C.J., and POWELL, J., joined, post p. 298. SCALIA, J., filed a dissenting opinion, in which REHNQUIST, C.J., joined, post p. 303.