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Bacchus Imps. v. Dias

Supreme Court of the United States

January 11, 1984, Argued ; June 29, 1984, Decided

No. 82-1565

Opinion

 [*265]  [***205]  [**3052]    JUSTICE WHITE delivered the opinion of the Court.

 Appellants challenge the constitutionality of the Hawaii liquor tax, which is a 20% excise tax imposed on sales of liquor at wholesale. Specifically at issue are exemptions from the tax for certain locally produced alcoholic beverages. The Supreme Court of Hawaii upheld the tax against challenges based upon the Equal Protection Clause, the Import-Export Clause, and the Commerce Clause. In re Bacchus Imports, Ltd., 65 Haw. 566, 656 P. 2d 724 (1982). We noted probable jurisdiction sub nom. Bacchus Imports, Ltd. v. Freitas, 462 U.S. 1130 (1983), and now reverse.

The Hawaii liquor tax was originally enacted in 1939 to defray the costs of police and other governmental services that the Hawaii Legislature concluded had been increased due to the consumption of liquor. At its inception the statute contained no exemptions.  [****6]  However, because the legislature sought to encourage development of the Hawaiian liquor industry, it enacted an exemption for okolehao from May 17, 1971, until June 20, 1981, and an exemption for fruit wine from May 17, 1976, until June 20, 1981. 2 Haw. Rev. Stat. §§ 244-4(6), (7) (Supp. 1983).  Okolehao is a brandy distilled from the root of the ti plant, an indigenous shrub of Hawaii. In re Bacchus Imports, Ltd., supra, at 569, n. 7, 656 P. 2d, at 727, n. 7. The only fruit wine manufactured in Hawaii during the relevant time was pineapple wine. Id., at 570, n. 8, 656 P. 2d, at 727, n. 8. Locally produced sake and fruit liqueurs are not exempted from the tax.

 [*266]  [****7]   Appellants -- Bacchus Imports, Ltd., and Eagle Distributors, Inc. -- are liquor wholesalers who sell to  [***206]  licensed retailers. 3 [****8]  They sell the liquor at their wholesale price plus the 20% excise tax imposed by § 244-4, plus a one-half percent tax imposed by Haw. Rev. Stat. § 237-13 (Supp. 1983). Pursuant to Haw. Rev. Stat. § 40-35 (Supp. 1983), which authorizes a taxpayer to pay taxes under protest and to commence an action in the Tax Appeal Court for the recovery of disputed sums, the wholesalers initiated protest proceedings and sought refunds of all taxes paid. 4 Their complaint alleged that the Hawaii liquor tax was unconstitutional because it violates both the  [**3053]  Import-Export Clause 5 and the Commerce Clause 6 of the United States Constitution. The wholesalers sought a refund of approximately $ 45 million, representing all of the liquor tax paid by them for the years in question. 7

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468 U.S. 263 *; 104 S. Ct. 3049 **; 82 L. Ed. 2d 200 ***; 1984 U.S. LEXIS 135 ****; 52 U.S.L.W. 4979

BACCHUS IMPORTS, LTD., ET AL. v. DIAS, DIRECTOR OF TAXATION OF HAWAII, ET AL.

Prior History:  [****1]  APPEAL FROM THE SUPREME COURT OF HAWAII.

Disposition:  65 Haw. 566, 656 P. 2d 724, reversed and remanded.

CORE TERMS

liquor, exemption, importation, wholesalers, intoxicating liquor, wine, okolehao, products, pineapple, interstate commerce, manufacture, discriminatory, alcoholic beverage, discriminate, regulation, refund, beverages, conferred, liquor tax, transportation, protectionism, customers, discriminating tax, regulate commerce, consumption, interstate, commerce, consumed, delivery, domestic

Business & Corporate Compliance, Transportation Law, Interstate Commerce, State Powers, Constitutional Law, Congressional Duties & Powers, Commerce Clause, General Overview, Tax Law, State & Local Taxes, Sales Taxes, Prohibition, Criminal Law & Procedure, Alcohol Related Offenses, Distribution & Sale, Elements, Criminal Offenses