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Law School Case Brief

Japan Line, Ltd. v. Cty. of L.A., - 441 U.S. 434, 99 S. Ct. 1813 (1979)


Various instrumentalities of commerce may be taxed, on a properly apportioned basis, by the nondomiciliary states through which they travel. In discarding the "home port" theory for the theory of apportionment, however, the United States Supreme Court consistently has distinguished the case of oceangoing vessels.


Six Japanese shipping companies argued that they were wrongfully assessed for property taxes in California. They filed a protest and contended that they were entitled to a refund because the taxes they paid to California were unconstitutional under the Commerce Clause. The shipping companies are incorporated under the laws of Japan, and they have their principal places of business and commercial domiciles in that country.


Does the imposition of property taxes against the Japanese shipping companies violate the Commerce Clause?




The United States Supreme Court reversed the judgment of the state supreme court and held that California's tax on foreign commerce violated the Commerce Clause. The Court concluded that California's tax was impermissible because it violated both of these principles. First, California's tax resulted in multiple taxation of the instrumentalities of foreign commerce because it produced multiple taxation in fact. And, second, California's tax placed impediments before the federal government's conduct of its foreign relations and its foreign trade.

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