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A state may not tax a transaction or incident more heavily when it crosses state lines than when it occurs entirely within the state. Once a state tax is found to discriminate against out-of-state commerce, it is typically struck down without further inquiry.
Alabama enacted a statute imposing on the operator of each in-state site for the disposal of hazardous waste, a base fee of $ 26.50 per ton for all hazardous waste disposed of at the site, and an "additional fee" of $ 72.00 per ton for waste generated outside of Alabama and disposed of at such an in-state site. The operator of an Alabama commercial landfill facility for hazardous waste disposal, alleging that the additional fee violated various provisions including the Federal Constitution's commerce clause (Art I, 8, cl 3), filed against defendants including the Governor of Alabama a state-court suit seeking declaratory relief and an injunction against enforcement of the state statute. The trial court, finding the only basis for the additional fee to be the origin of the waste, held that the additional fee violated the commerce clause. On appeal, the Alabama Supreme Court, reversing in pertinent part, held that the additional fee advanced legitimate local purposes that could not be adequately served by reasonable nondiscriminatory alternatives. The petitioner operator challenged the decision.
Did the statute in question violate the commerce clause by imposing a hazardous waste disposal fee only on hazardous wastes generated outside the state and disposed of at a commercial facility in the state?
The court reversed the decision of the lower court, holding that no state could properly attempt to isolate itself from a problem common to the several states by raising barriers to the free flow of interstate trade. The court held that the fee facially discriminated against hazardous waste generated outside the state and plainly discouraged the full operation of petitioner's facility. The court held that such burdensome taxes imposed on interstate commerce were forbidden because the state could not properly tax a transaction or incident more heavily when it crossed state lines than when it occurred entirely within the state.