District of Columbia – D.C. Potential Supreme Court Nominees on State Taxes and Interstate Commerce

January 31, 2017

Joseph Henchman Kavya Rajasekar – Tax Foundation

“President Donald Trump is expected to announce his nomination today for the U.S. Supreme Court seat vacated by the death of Justice Antonin Scalia in February 2016. While President Trump listed 21 individuals on his Supreme Court short list, media speculation has focused on two: Denver-based Judge Neil M. Gorsuch of the Tenth Circuit Court of Appeals and Pittsburgh-based Judge Thomas M. Hardiman of the Third Circuit Court of Appeals.

Journalists, legal scholars, and political pundits will peruse the nominees’ legal opinions, judicial writings, and speeches to examine how he might alter the high court’s political tilt. While a nominee’s prior voting record or political affiliation is not always a guarantee as to how cases will be decided as a Supreme Court justice, it can provide insight. Consequently, we have reviewed the past decisions of these two judges on an area of law often overlooked: the scope of state tax overreaching.

The Commerce Clause of the U.S. Constitution grants power to the federal government to regulate interstate commerce, and early on Chief Justice Marshall ruled that this implies that states cannot interfere with interstate commerce unless Congress explicitly permits them to do so. This “dormant” or “negative” Commerce Clause allows the U.S. Supreme Court to overturn state tax laws that discriminate against interstate commerce or otherwise impede it. Justice Scalia, for his part, rejected the whole theory of it; he believed discriminatory state tax law should be overturned by Congress and not the courts. Hence Scalia’s vote alongside Justices Ginsburg, Kagan, and Thomas in 2014 to let Maryland impose double taxes on residents with out-of-state investments. (After that case, I suggested a law Congress could pass to address Scalia’s concerns while continuing to limit state tax overreaching.)”…

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