Valdez AK Tax Defeat Protects Interstate Commerce

While Alaska is not California or New York in terms of population or business activity and the personal property tax on large vessels is fairly isolated in its application, it is comforting to see the U.S. Supreme Court be willing to step in where appropriate to correct a state and state court from overreaching. 

The city of Valdez, Alaska had charged personal property on large vessels docked at private facilities, apportioning the tax based on days in port.  The U.S. Supreme Court reversed the Alaska Supreme Court, holding the tax violates the Tonnage Clause in violation of interstate commerce. Polar Tankers v. City of Valdez, 2009 U.S. LEXIS 4319 (U.S. June 15, 2009).  In a 7-2 decision, the Court invalidated the city's tax on tankers using ports to load crude oil for transport to West Coast refineries.  Valdez relies on the tax to pay for schools and other public services.  Polar Tankers advanced several constitutional arguments, but the court's ruling turned only on the Tonnage Clause.

While it does not get a significant amount of attention again largely because of its relative size and the fact that a significant percentage of the large corporate taxpayers are the evil oil companies of the world, the tax and legal system in Alaska is a disgrace to the very concept of justice and rule of law. The Alaska Supreme Court has routinely demonstrated a disregard for the U.S. Constitution.  So it is gratifying that the U.S. Supreme Court be willing to hear and properly decide the case.