@ Copyright West Publishing Company,

Reprint,ed with permission.

OKI.AIIOMA TAX COMMISSION'Petitioner,

v.

JEFFERSON LINES, INC.No. 93-1677.

Argued Nov. 28, 1994-

Decided APril 3' 1995.

SYllabus'Respondent Jefferson Lines,Inc., a com-

non catrier, did not eollect or remit to Oldla-roma the state sales tanr on bus tickets soldn OkJahoma for interstate travel originatinghere, although it did so for tickets sold fornEastate travel. After Jeffenson filed fornnkruptcy, petitionen, Oklahoma Ta:r Com-nission, filed proof of claims for the uncol-ected tances, but the Bantcuptcy Court foundlrat the tax was inconsistent with the Com-rence Clause in that it imposed an undue:urden on interstate cotnmerce and present-d a danger of multiple taxation. The Dis-rict Court atrrned. the Court of Appedsdso affirmed, holding that the ta:c was not,'ahty apportioned" Rejecting the Cornrnis-:ion's position that a bus ticket sale is a'rtrolly local tansaction instifying a State'ssales ta:c on the ticket's full value, the courtrcasoned that suctr a ta:r is indistinguishablefrom Nent Yprk's unapportioned ta:c on anrnterstate busline's gross receipts strtrckdown by this Courr in Cefiml fuVhmndLiru& Ina a. MedzY,334 U.S. 653, 68 S.Ct1260, 92 L.Ed. 1633.

Helt Oklahoma's tax on tbe sale ofuznsporadon services is consistent with theCornmeree Clause. Pe. --

(a) Under Complzte fudD Trott^s:ll I'rav. Bmdy, 4:t0 U.S. n4, 97 S-Ct 1(n6' 51LEdgd 326, Oldattoma's tax is vdid if it isapplied to an activity with a substantial nex-rrs with ttre State. is fairly apportioned, doesnot discriminate against int€rstete som-nenee, and is fairly related to t}e senricesprovided by the Sate. fire actidty hereelearly has a nexus with Oktattoma. the State

'NOTE: Where it is feasible. a syllabus (headnote)

will be released. as is being done in connectionwith this case. at the time rhe opinion is issued'The syllabus constitutcs no Part of the opinion of

Supreme Court, Reporter.

OKII\HOMA TAX COM'I\I V. JEFFERSOII{ LII{ES' INC. 1331Cttcglls S.Ct. l33l (1995)

where the ticket is pr:rcha-sed and the service

originates. PP.(b) The purpose of the seeond prong of

Camptetn Auto's test is to ensure that each

State taxes only its fair share of an int€rstate

transaetion. A properly apportioned ta(

must be both interndly and orternally con-

sistenl Internat consisteney looks to wheth-

er a tax's idendcal application by every State

would place intersate commerce at a disad-

vantage as compared with intrastarc eom-

-.o.. Ttrere is no failure of iuch eonsisten-

cy in this case, for if every State were to

impose a ta:r identical to Oldatroma's-ie" a

ta:c on ticket sales *ithin the State for travel

originating there-no sale would be subjeet

to more than one Stat€'s tax External con-

sisteney, on the other hand, looks to the

eeonomic justifrcation for the State's claim

upon the value t$(ed, to discover whether the

ta:( reaches beyond the portion of vdue that

is fairly attributable to economie activity

within the ta:ring Sate. Pe. -

(c) Where ta:ration of income from inter-

stat€ business is in isstre, apportionment dis-

putes have often foctrsed on slicing a tarable

pie among several Stares in wtrich the ta:c-

payeds activities contributed to ta"rable in--*-". 'When

exarnining the taxation oi a

sale of goods, hmrorer, the sde is mosc

readily viewed as a discrete event facilitated

by the }rws and anenities of the place of

sale, and the transaetion itself does nor readi-

ly reveal the ortent to whidr interstate astivi-

ty affects the value on wtridr a buyen is

taxed. Thus, taxation of sales has been con-

sistently approved without any division of the

tax base among different Sbt€s and has beert

forurd properly measurable by the gross

ctrarge for the purchase. regardless of any

..Wity outside the taxing jurisdiction that

migbt have preeeded the sale or might occur

in the fuurre. firerefore, an internally con-

si*ent conventional sales ta:( has long been

held to be externally consistent as well' Pp'

- - - o

(d) A sale of sendees can ordinarily be

treated as a loeal state event just as readily

the Court bur has been prepared by the Reporter

"i-o."ii"* for thc convenience of the reader'

ie llnitdsraras v' Dettoit Lumbq Co" 200 U'S'

321. 337.26 S-Ct. 2E2.287,50 L'Ed' 499'

'

1332 1T5 SUPREME COTJRT REPORTER

as a sale of angible goods can be locatedsolely s'ithin the State of delivery. Sales ofservices with performance n'holly in t}e ta:i-ing Sate justit'that Sate's taxation of thetransaction's entire gross reeeipts in thehands of tbe seller. Even rrhere interstateaetivity contributes to the vdue of the senriceperformed, sales with perforlnanee in thetalcing Sate justify ttrat Sate's tanration ofthe seller's entire gross reeeipts. See, e.9.,Westent Liae Stock u. Burcoa of Reuen:u'e.308 U.S. 250, 58 S.Cr 546,82 L.Ed. 823. Int.his case, although the seryiee is performedonly parrially within the taxing State, thebuyer is no more subject to double ta:rationon the sale of senrices than the buyer ofgoods rrculd be. fire ta:rable eveut herecornprises agreemenf payment, 8nd deliveryof some of t}e sen'iees in the ta:ring Stete.No other State can claim to be ttre site of thesame eombination and these combined eventsare conrmonly understood to suffice for asale. Centml C'reylwund, su,pn, distin-guished. Pe. - -

(e) Jefferson offers no convincing rea-sons to reconsider whethen this intcrnallyconsistent ta:r on sdes of sertiees could failthe external eonsistency test for ladr of fur-ther apportionmenL It has raised no spectreof successive taxation so elosely related tothe transastion as to indieate potential un-fairness of Oklatroma's ta:r on the sale's fullamount. Nor is the faet that Oklatrornacould feasibly apportion its ta:( on the basisof mileage, as Nenr York was required to doin CenfmJ Crtzyhomd supm, a suffcientreason to condude that the tax ereeeds Okla-homa's fair shar.e. Pp.

(0 the tax also meets the rernaining two 1. Commerce e52.ttprcngs of Canryl,ete Autp's test" No aryU- Commeree clause's express grant toment has been made that Oklahoma diserimi- Congress of power to regulate commeroenates egainst out-of-state enterprises, aDd anong the several states contains furttrer,there is no merit in the argrrment that the negative comrnand, known as domant com-tax discriminates against int€rstate astivi* merse clause, prohibiting certain s13t€ tera-Ansriaan Tnrclcing AsEocirltifrtr& Inc a. tion even *'hen Congfess has failed to legi6,Sclwinn, 489 U.S. ?ffi, M S.Cf M, W late on subjecL US.CA Const Art 1, $ 8,L-Ed2d n6, disdnguished. fire tax is also cl. g.fably relat€d to the tarpayer's pr:esence oractivities in the State. It falls on a sale tlrat 2. Commerce c'62'71

talces pleee v*rolly inside Olclatroma and is Siate tax does not violate dortrant eom-measured by the value of the sendce pur- merce clause when tal( is applied to astivityebased. Pe. ---. wit; substantiol nocus with ta:ring state' is

15 Fsd 90 (CA 8 f99l). reversed andremanded.

SOIITER. J., delivered the opinion ofthe Courl in u'hich REHNQUIST. C.J., andSTETENS, KEl.Il.iED-t-. and GINSBURG.JJ., joined. SCALIA" J., filed an opinionconeurzing in the judgrrnent. in nhiehTHOMAS, J., joined. BREYER, J.. filed adissenting opinion, in u'hich O'CONNO3, J.,joined.

Oldahoma Tax Commission sought pay-ment of rnpaid sales tax on gross price ofinterstate bus tickets sold b1' taxpayer inOklahoma prior to filing of tarryayers Chapter 11 petition. the United Sates Bank-rupt y Court for the Distriet of Minnesot4Dennis D. O'Brien, Chief Judge. determinedtbat ta:r violated conrmenee clause, and Okla-homa Tax Commission appeded. The Dis-trict Court Dondd D. Alsop, Senior DistrietJudge, affirmed, and Oldahoma Ta:r Commis-sion took firther appeal. Ttre Court of Appeals for the Eighth Circuit" 15 FSd 90,afirmed, and Oklahoma Toi Commission p$titioned for writ of eertiorzrl The SupremeCout, Justiee Souter, held that (1) Okla-homa's sale tax on full priee of ticket for bustravel from Oklahorna to another state didnot violate dorzrant eornmenee clause.

Reversed and rcmanded.

Justiee Scalia filed separate opinion con-curing in judgmenq in which Justice Ttrom-as joined.

Justice Breyer filed dissenting opinion,in which Justiee O'Connor joined.

fairly apportioned, does not discrindnatcagainst interstate conmerce, and is fairlyrelated to services prcvided by stat€.U.S.C-A- Const. Art 1, $ 8, cI. 3.

3. Commerce e?4.5(2) '

Sde of ticket in Oklatroma for bus travelfrom Oklahoma to another state had suffi-cient ne:rus to Oklatroma to be ueated asloeal transaction subjeet to Oldahoma sdestarq rurder dorzrant conmerce clause.U.S.CA Consl Art 1, $ 8, cL 3; 68 OklstAnn. $ 1&54, subd. 1(C).

4. Commerce e745(2)Taxation @1112.1

Oklahoma's sales tax on fuIl price ofticket for bus travel from Oklahoma to anoth-er state was sufficiently apportioned to satis-fy dormant cotnmerce dause; talc was bothinterndly eonsistenf in thet if every statewere to impose identical ta; no sale would besubject to more than one state's ta:q andexernatty eonsistent, because sde and par'tial delivery could not be duplicated as tax-able went in any othen state, and there wasno possibility of sueeessive talration so doselynelated to fansaction as to indicate potentialunfairness of Oklatrorna's tax on full amountof sale. U.S.CA Consl Art 1, $ 8, cL 3; 68otilsranlL $ 1354, subd- 1(o.

5. Cornmerce e-'6e80For purposes of apportionnent anal]tsis

under dorrnant commeree clause, ta:( is 'in-

teraally consistent" when imposition of taxidentical to oue in question by every othenstate would add no burden to interstate com-merce that intrastate oournense would notalso bear; test asks nothing about degree ofecrnomic realiff re0ected by ta:r, but simplylooks to struchlre of ta:c at issue to seewhether its identical application by everystate would place interstate eommenee at dis-advantege as compared with commerce intra-stat€. US.CA Consl Att 1, $ I, cL 8.

See pubhcation Wor& and Ptrrasesfor other judicial constnrctions and def-initions.

6. Commerce @62.t0For pnrposes of apportion analpis un-

der doraant commence clause, determinationof exterrral consistcncy of ta:c looks not to

r333

logrical @nsequenoes of cloning of tax b1'

other stet€s, but to economic justification for

state's cl^im upon vdue tanced, to discover

whether state's tax reaehes beyond that por-

tion of value that is fairly attributable to

eeonomic activic-v within taxing stat€: tlreat

of real multiple taxation, though not by liter-ally identical stahrte, tnay indicate state'simpermissible reaching. U.S.CA ConslArt 1, 5 8, cl. 3.

?. Commerce e74.5(1)

For purposes of deterzrining whether

sales tst( is properly appordoned under dor-

mant sommenee clatrse, sale of goods is most

readily viewed as discrete event faciliated by

laws and amenities in place of sde, and

transaction itself does not readily reveal ex-tent to whidr completed or antieipated. inter-

state activiff affects value on i'hich buyer istaxed, with result that tsxation of sales basedon gross e;hargp, without any division of taxbase asrong states, will consistently be uPheld, even where parties to sdes contractspecifically contenplate int€rstat€ movementof goods either inmediately before or aftertransfen of ownerstrip. U.S.CA Corrst" Art1, $ 8, cl. 3.

8. Commerce @t6e80

Commerte dause does not forbid achtal

assessment of zuceession of taxes by differ-

ent states on different events asi same tangi- -

ble objeet f,orps dong. U.S.CA Consl Art

1, $ 8, cl. 3.

9. Commerce €=745(1)

For purposes of detemining whethen

sales tax is properly apportioned under dor-

mant commeree clause, sale of serrrices eanordinarily be treated as local sate errcnt just

as readily as sale of tang$le goods ea" be

located wi0liD state of delivery, ard it neednot be treat€d in sarne nanner as tax ongross receipts from sales of serrrices, which

must be apportioned to reflect location ofvarious int€rstate activities by which it was

earaed. US.CA Const. Alt 1, S 8, cl. 3.

10. Commerce @745,(2)

Fact tbat OHatroma could feasibly apportion its sates ta:r on tidcets for bus travel

from Oklahoma to other states on basis of

OItr.AHOIYIA TAX COM'N v. JEFFERSON LINE$ IliC'Ctl.er ll5 S.cL l33l (f9$)

1334 U5 ST]PREME COIJRT REPORTER

mileage did not establish that sales tal( sasnot properly apportioned under dormantoonrmeree clause. US.CA Const. Art 1,$ 8, cL 3; 68 Okl.St3rn. $ 13S1, subd. l(C).

11. Commerce €=745(2)

Taxation G=lzU.l

Oklatroma's sales tax on full price ofticket for bus travel fronr Oklatroma to anoth-er stat€ did not discrininate against int€r-state commenee, in violation of donnant com-merce elause, even if dividing Oklahoma sdetaxes by in-state miles to be traveled produced on avenage higher figure when inter-state trips were sold than when sale was ofwholly domestic journey; as with tax on saleof angible goods, potential for intentatemovement after sde had no bearing on rea-son for sales ta:c U.S.CA Const. Att l,$ 8, cL 3; 68 Okl.Stinn. $ 1354, subd- l(C).

12. Commerce o=52.t5

Dornant commence chuse bars taxingstat€ from aiscrininating against foreign in-t€rprises competing wi*r local businesses,and from discriminating against commercialactiviff ocrulring outside ta"xing state.U.S.CA Consl Att 1, 5 8, cL 3.

13. Commerce €$!.71

Dormant conmenoe clause demands fair,relation betrreen ta:r and benefits conferredupon tarpayer by state. U.S.CA Const"Art 1, $ 8, cl. 3.

14. Commerce G{45(2)

Taxation @Ulet

OHatroma's sales tax on full price ofticket for bus favel from Oklahorna to anoth-er state bore fah relation to benefts con-fetred by OlJahorna induding police and frreprotection, dong with the usud aivantagesconferred by state's maintenance of civilizedsociety as requir€d by dornant sommenceclause. US.C..{. ConsL Art l, $ 8, cL 3; 68OLdStAnn S 1354, subd. f(C).

l. At the time rclerrant to the tares at issue herc,section l35a prwidcd as follows: 'Therc is hcre.by lcvicd upon dl sales ... an excise tax of fourpcraent 6%) of the gross rcceipts or gFoss pnocccds of each sale of the following . .. (C) Trans-portation for hire to penrons by common cari-

15. Commerce €2.71

Demand of eommerce clause thar fairrelation erist betn'een ta\ and benefits eon-ferred upon ta\payer by state does not require deailed aeeounting of serviees prcr'id-ed to taxpayer on account of activity b.ingtaned, nor. indeed, is stare limited tp offset-ting public costs created by tax activiq'; iferrent is taable, pr,oceeds from tax may ordi-narily be used for purposes unrelated to tax-able e.vent, and interstate eonrmerce mavtlnrs be made to pay its fair share of sateer(penses and contribute to cost of prorddingall governmental sen'ices. ineluding thoseserrriees from whidr it arguably reeeives nodirest benefit US.C-A, Consr. Att 1, S 8,cl. 3.

SAnley P. Johrston, -Oklahorna City, OK,for petition*.

Stcven D. DeRuyter, Minneapolis, MN, forrespondenLFor US. Supreme Court briefs. see:

1994 WL 4?;4006 (PeLBrieO

1991 WL 496960 (Resp.Brieft

.,rustiee SOTITEB delivered the opinion ofthe Court

nds case raises the question whet}erOklahoma's sales tax on t}e full priee of atidct for bus travel from Oklatroma to anoth-en Sate is consistent with the CommerteClaue, U.S. Consl, Art I, $ 8, cL 3. Wehold that it is.

IOklatroma taxes sales in the State of cer-

tain geods and serrrices, including transporta-tion for trire. Oklastat, TiL G8,$ 1354(1XC) (Supp.r988).r The buyens ofthe taxable goods and serrrices pay the taes,whidr must be collected and remitted to ttreState by sellens. S 1861.

Respondent Jeffenson Lines, Inc., is aMinnesota eorporation tlat provided bru ser-

ets, including railroa& both stcam and electric,Edor traDsportati,on companies. taxicab compa-nies, pullman car companies, airlirrcs, and otbcrmeans of tmnsportation for hirc." As a rcsult ofrrcoeat ameodrnents, the sta$te prescntly puvides for a 4b percent tar rate.

vices as a Gommon carrier in Oklahoma from1988 to 1990. Jefferson did not eollect onr:nit the sales tanres for tiekets it had sold inOlclahorna for bus travel from Olclahorne toother States, dthough it did eollest and remitthe ta:ces for dl tidcets it had sold in Okle-horna for travel that originet€d and teminat,ed within &et State.

After Jefferson filed for banlruptry protection on October fl, 1989, petitionen, Okla-homa Tor Commission, fiIed proof of elaimsin Bantcuptry Court for t}e uneollected ta:c-es for tiekets for intcrstete travel sold byJefferson.z Jefferson cited the CommeneeClause in objeeting to the elairns, and arguedthat the ta:r imposes an undue burden oninterstate conmerce by pemitting Oldahomato collect a percentage of the ftll purchasepriee of dl tidcets for interstate bus favel,even though some of that value derives frombus rarrel t}rough other Sates. the texdso presents the danger of multiple taxa6on,Jefierson ebirngd, because any o&er Staletlrough whidr a bus travels ufrile prwidingthe senriees sold in Oklahoma wiU be able toimpose taxes of their own upon Jefferson orits passagers for use of the roads.

lhe Bankuptry Court agreed with Jeffen-son, the District Cout afirrned, and so didthe United Stat€s Court of Appeals for theEighth Cirsuit In rc Jeffercon Linzg lttc.,15 F3d 90 (1994). Ttre Corrt of Appedsheld that Oklahoma's ta:r was not fairly ap.portioned, as required under the establishedtest for the eonstihrtionaliff of a state tax oninterstate oommerce. See Canplete fudoTrla,nsiL Ine a. Brudy,4il0 U.S. n4,2'W,97s.cr l(n6, 1019,51 L-Ed2d 826 (ryr?). TheCourt of Appeals rurdenstood its holding tobe eompelled by our decision in CeilmlCnvyhmnd Litug Inn o. Mealey,334 U.S.659, 68 S.Cr 1260, 92 L_Ed. 1G|3 (1948),wtdctl held unconstihrtional an rmapportioned

2. The partics bave stipulatcd that tbe dispua. eonecrDs only tbcc taxcs for Jefierson's in-statcsales of dclsts for cavel starting in Oklahomaand coding in anothcr Starc. App. 5; Tr. of OralArg. 3-4. Thc Commission docs Dot scck tonocoeer any taxcs for tickas sold in OHahoraafor rarrcl wholly ouside of the State or for travclon Foutes originating in other Satcs ard tcrmi-Dating in Oklahoma. Accordingly, the validity ofsuch taxcs is not bcfore rrs.

1335

state tax on the gross receipts 3 of a eompan]that sold tiekees for intersute bus ravel.llhe Court of Appeals rejected the Commis-sion's position that the sale of a bus tidcet isa wholly local transaetion jnstifying a salestal( on the tieket's full value in the Satewhene it is sold, reasoning that sudr a tax isindistinggishable from the unapportioned ta:ron grlss receipts from interstate travelstnrdr douru n Cmtml Cneuhn nd. 15 F3d,at !I2-$|. We granted certiorari 512 U.S.

114 S.Cr 2ffi2, r29 L.Ed2d 808 (1991).and now reverBe.

utU Despite the orpress grant to Con-

gress of the power to begu}ate Cornmerce... anong the several Stat€s,' US. Consl,Art I, $ 8, cL 3, we hav.e consistently heldthis languagp to contain a further, negativecommand, krown as the donnant CommereeClause, prohibiting certain state taxationo'en rvhen Congress has failed to legislate onthe subject" Quill Cor" o. North, Daletg504 us. 29& 309, lU S.Ct" lg(U, -, 119L-Ed2d 91 (1992); Nottlnnstzrn StcJesPofiland, Ccmenf Co. o. Mhn*ota,358 US.4go, 458, 79 S.Gt 35?, 86e 3 L-Ed2d 421(1959); H.P. Hd & Son+ Ina u Du MonL386 u.S. 525, 534-i35, 69 S.Ct 65?, 6GL6BLSt L.Ed. 865 (1949); d. Gi.trbux o. Ogda 2,U.S. (9 Wheat) l, 209, 6 L.Ed. A $8PA)(Marshall, CJ.) (disttu). We have rmder-stood t}is eonstrrstion to serne the Com-merce Clause's FDryose of prwmting a Statefrom reFeating into economie isolation orjeopardizing the welfare of the Nation as awhole, as it would do if it were free to placebundens on the flow of Gotnmerse across itsboders tlrat commerce wholly within thoeebonders would not bear. The pmvision thru'tef,ect{sJ a cenfal conoerD of the Flamerstbat was an imnrediate rreason for rlling tbe

3. Wc follow staadard usegp, uDdcr whicb gr6sreceipts gucs are on thc groes receipts homsales payable by thc scllcr, in concast to salestarcs, urhich are dso lcvicd on thc grcs recciptsfrom salcs but are payablc by the buyer (dthorghthey arc collectcd by the seller and remircd tothe taxing cntity). P. Hanrnan, Fcdcral Linita-tions on State and l-ocd Taxation 55 t:1. l0:l09El).

OKIJEOMA TAX COMN v. JEFFERSON LINES' INC.Clrcerlts S.CL f3l (tttt)

1&36 1T' ST]PREME COTTRT REPORIER

Constihrtional Convention: the convistion

that in order to sueceed. the ners' Union

would have to avoid the tendencies tovnrd

eeonomic Balkanization that had plagued re-

lations among the Colonies and later among

the States rurder the Artides of Confedera-

tion.'' Wondair Csnada lttc' a' FIDtina

DepL of Re&nnta 4?7 U.S' l, ?, 106 S'Cr

nag, zazz-nzg, 91 L.Ed2d I (1986)' quotingUughps o. Otdalwna' 441 U'S' W" .3Pffi26'sg s.cr lTn, 1?30-1?31, 60 L.Edzd ?50(1979); see also fire Federalist No' 42 (J'

Madison), ? (A Hamitton), 11 (A Hamilton)

(J. Cooke ed- 1961).

fite eommand has been stated morre easily

than its object has been attained, however'

and the Court's rurderstanding of the dor-

mant Comrnerrce Clane has talren some

hlms. In its early stages, see I J' Heller-

sain & W. Hellerstein, Sate Taration

114.05-4.08 (2d ed. 199:l) (hereinafter Heller-

stein & Ilellerstein); Hartman, supro n" 8'

$$ 2:9-2:16, the Court held the vies' tlrat

int€rstate sornmence was wholly iunune

from state taletion 5n any foru'" I'eloup a'

Port of Mobila 1?7 US- 640, 648, 8 S'Ct'

1380, iga4,32 L-Ed. sll (1888),'even though

the sarne amount of tax should be laid on

tintrastateJ sommence," Robbtru o' SIvPW-C*trt[ fosing DisL, 120 US' 489, 49?, ?

S.ft 594,596,80 L-Ed" 694 (188D; see also

Caotey a. Boort of Wordons of Port of Philn'

ilntphin u reL Socie[ fot Reli{ of Dj''s'

trcsseit Pilots, 53 US. (f2 How') 299' 13

L.Ed. 996 (185S); Bmun o' MatVIon'L 25

U.S. (12 Wheat) 419, 6 L-Ed' 6?8 (18e0'

this position geve way in time to a less

uncompmmising but formd apprcad5 ac-

cordni to wlddh, for example, the Court

would inlnlidate a state ta:( levied on gross

receipts from int€rstat€ ctommerce, New Jer-

seU EeU Telephmta Co. a. Sturz Bd of Toses

ann Assessments of New J^"Y, 280 US'

33& 50 S.CL 111, ?4 L-Ed" 4A (1S0)i Meser

a. Wells, Fo:tgo & Co.,223 U"S. ffi, gg S'C.L

218, 56 L.Ed.445 (1912), or upon the "freight

ooi.d' in interstate commence' Cose of tlw

4. the Conrt had indeed temporari$ adhacd to Gtoss Rcceipg SZ !l'S..(15 Wall') 28.4'' 21 LEd'

an additionat distinction between or;;;; 164(ii;3t-frittti".dltinctionwasabandoncd

Ersurtc commerce strch as tbat struck dotm in priot to th" Ncvo le'Ijc-v Bell ea* in Philadelphia

rhe Case of State Ftcight Tu, a,,d tax* upon b g"ittn" S'S' Co' v' Pcnnqlvania' 122 US'

gross receipts hom s"ih comote"c"' t"li"t' *ttt 326' 7 s'cr ltlE' 30 L'Ed' 1200 (1887)'

ipfaa thai same Tenn in Stue Taz on RaiIry

State Frcight Tat. &' U'S' (15 Wall') 232'

n8. 2l L.Ed. 146 (18?3)' but would aliou 3

. tax merely measured by gross reeeipt's frcm

inreretate conmerrce as long a-s the t&\ uas

formally imposed upon franehises, Maitu r'

C,4ann-rrui* R. Co-. r42 U.S' 21?' 13 S'Cr

121, 35 L.Ed- 994 (1891), or " ln lieu of all

tar(es upon [the taxpayer's] propertV" " Unit'

ed, Statps Erplss Co. o' Minrusot'q 223 U'S'

335, 346, 32 s.ct- 211, 215, 56 L'Ed' 459(1912).r See generally, Loekhart, Gross Re

ceipts Ta:res on Interstate Transportation

*d Cot-unication, 57 Harv'L'Rev' 40, 43-

66 094i|) ftereinaft€r Lockhart)' Dissenting

from thls forrnal approadr in 1927, Justiee

Stone remarked that it was "too mechanical,

too uneertain in its application, &d too rs

mote from actr,ralities, to be of vdue'' A

Sr,rztn a. Pennrghtanin, 2?3 U'S' U' U' 47

S.Cr ?ljl,nL,?l L.Ed' SZL(tg27l (Stone' J',

dissenting).In 1988, the old formalism begBn to grve

way with Justiee Stone's opinion n Westerrr

Litn Stpck o. Buzau, of Retnrrun" 803 US'

250, 58 S.Ct il6, 82 L-Ed. 823 (19i18), cfricl

e:ramined New Morico's franchise ta:r' mea'

sured by gross receipts, as applied to e

eeipts from out"of+tate advertisers in a jour-

natproduced by the ta:cpayer in Nelw Mqieo

but cirsulated both inside and outside the

State. Although the assessment could have

been sustained solely on prior precedent' see

il, art258, 58 S-CL, at &{9-550; Lockhart 66,

and n 122, Justice Stone added a dash of the

pragmatism tbq with a brief intcrlude' has

rio.. become our aspiration in this quarter of

the law. fire Court had no trouble rejecting

the claim that the 'lnere fonnation of the

contract between persons in different states"

insulat€d the receipts from ta:ration,Western

Liae Strrch 3(ts US-, at 28,58 S'CL' stil?,

and it saw the business of freparing, print-

ing and publishing nagazine advertising [as]p".,ttittty local" and thenefore subject to tax-

"tion by the State within whidr the businees

op*t"d. Id'., st 258, 58 S'C.L, at 550' the

mott \exed Erestiou" however, sas one

104

ttrat today we would call a quesdon of appor-donment whether the interstate eirrularionof the journal ba:red taxation of reeeiptsfrom advertisements enhanced in vdue bytlre journd's wide dissemination. Id, at ?,54,58 S.Ct-, at 5,18. After rebufing any suchehdleuge on the ground that the burden oninterstate eommeFce rz-s "too remote and tooattenuated" in the light of analogons ta:rationof railroad pnoperty, id-, at 259, 58 S.Ct-, at550, Justice Stone provided an "added rea-son' for sustaining the ta:c

'So far as the value contributed to appel-lants' New Morico business by cireulationof the magazine interstatc is tared, it can-not again be a:red elsewhere any moreth"q the vdue of railroad property tsxedlocally. The ta.x is not one wtridr in fonnor substanee can be repeated by otherstat€s in sudr manner as to by an addedburden on the irterstate distribution of thernagazine." Id, at 260,58 S.CL, at 55G-a)r.

The Court erplained thet l[iJt was not thepurpose of the courmerce elause to relievethose engaged in interstate eotnmeme fromtheir just share of state tax burden errentbough it inereases the cost of doing thebusiness.' Id, atzil,$ S.Ct, at 548. Soonafoer Westmt Lhn Stffih the Court erpress-lyrested the invdidation of an unapportionedgross reeeipts ta:r on the ground that itviolated the prohibition against multiple taxa-tion:

"The vice of the stahrte as applied toreeeipts from intersate sales is that thetax indudes in its measiure, without appor-tionmenf receipts derived from activitiesin interstate oornmenee: and that the erac-tion is of suctr a character that if lavrftl itmay in strbstanee be laid to the fullestext€llt by Sates in whietr the goods ar',esold as well as those in vrhich tlrey aremarrufacbrred." J.D. Ailnms Mfg. Ca uStoll\ 304 U"S.307,311,58 S.Ct 913,916,8U L-Ed. 1365 (1988).

See also Cftoit\ Wlifz & Princq Ina o. Hen-,uford,305 U.S. 434, 43H39, 59 S.CL 325,vt-gg8'83 L_Ed. m (1989).

I2l After a brief resurgence of the oldrbsolutisur that proscribed all taxation for-ully levied upon inerstat€ eommerse, see

1337

Fnanan a. Heui| 329 U.S. 219, 6i S.Ct.274. 91 L.Ed. 265 (1946); Spedor MotorSeruice, Int u O0otr,nm, 840 U.S. 6@. 7fS.Cr 508, 95 L.Ed. 57il (1951), the Courtreurrned tn Westpnt Liue Stock 's multipletaxation nrle in liorth'westent States Port-land Cenwnt Co. u Mbmesotn- 358 U.S. 450,79 S.Ct 35?, 3 L.Ed2d 421 (1959), and wecategorically abandoned the latter-day for-mdism when Com,plztn Aurn Trun^sit, Inc. .*.Bnd.y, 430 U-S. n4, 97 S.Ct. 1076, 5rL_Ed2d 326 (19f0, overnrled Spector andFrcemnn In Com,plztn, Auto, a business en-gaged in transponing cans manufactured out-side the taxing State to dealers sithin itdrallenged a franchise ta:i assessed equallyon all grcss income derived from transpofta-tion for hir€ within the Sate. Itre taxpay-er's drdlenge r€sting solely on the fast thatttre State had taxed the privilbge of engagingin an interstate cornmencid activity urastumed baclq and in sustaining the ta:r, wesrplicitly retrurred to our prior decisions that

'considened not the foraal language of thetax statute but rzthen its practical effect,and have sstained a tex against Com-merce Clause chdlenge when the tax isapplied to an astivity with a substantialnexus with the taxing State, is fairly apportioned, does not discriminate againstint€rstate oornmense, aDd is fairly relat€dto the services provided by the Sa!e."430 U.S., zt tI9, 9? S.Ct , at 1079.

Since then, we have often applied, and some-what refined, what has come to be hourn asComplatn Aufo's four-part test. See, ag.,Goldherg o. &neL 488 US. ?52, 109 S.CrW, wZ L-Ed2d 60? (1989) (tax on telephoneealls); D.H. Holmes Co. a. McNa.mn:tu &us. ?/1, rffl s.cr 1619, r00 L.Ed2d 21(f988) (nse tax); Containn Corp. a. Fron-cldse Tar Boad, 4Gl U.S. 159, l(ts S.Ct29tX!, ft L-Ed2d 545 (f9$) (franchise tax)iCommonaq)th Edison Co. u Montnna, 63us. 609, r01 s.cr ?p/l6, 69 L-Ed2d 884(f981) (sevenance Ax). \ile apply its crit€riato the tax before us today.

III

A

t31 It has long been settled that a sale oftangible goods has a suffcieut netos to the

OKIJIEOMA TAX COMN v. JEFFERSON LINE$ INC.chcB lts s.ct t3t (19t3)

13:t8

Sate in which the sale is consumrnated to befeat€d as a local transaction taxable by thatState. M&oldrick o. 3tno6126-fl/I1it2 C@IIylinhg Co., 309 U.S. 83, 60 S.Gt" 388, E4L.Ed. 565 (1940) (upholding ta:r on sale ofeoal shipped into taxing State by seller). So,too, in addressing the interstate provision of

'services, we recently held tbat a State inurhich an interstate telephone call originatesor teminatcs bas the requisit€ GommereeG1ause nelus to ta:( a customeds puthase ofthat call as long as the call is billed orcharg€d to a service address, or pard by anaddressee, within the taxing Stet€.hldberg, supm,488 US., at 2G}, 109 S.Ct,at 589-590. Oklatroma's tax falls cornfottablywithin these rules. Oklahoma is where thetidcet is purdrased, BDd the serviee origi-nat€s there. These fads are enough forconduding ttrat '[thm is bemts' aplenffhere.' See D.It Holtnla.* Eupra,486 US., at&f, 108 S.CL, tt l@A. Indeed, the ta4ayerdoes not deny Oklahoma's substsntiel nerusto the in-stat€ portion of the bus sewiee, butrzf.her argues that nenrs to the State isinsrJficient as to the portioa of travel outsideits boders" This point, howeven, goes to theseeoud prcng of Completn t\uln, to rvhich wehtrr.

B

tll The difisult question in tlris case iswtether the tex is properly apportionedwithin the meaning of the second prong ofConplctn Alrto's tesq 'the central purpose[of which] is to e.D$re thet each Stst€ talresonly its fab Btrare of an interstate transac:tion ' hldbrg, su,pm, {88 US" art?fu261,109 S.CL, at 588. this priaeiple of fab shareis the lineal descendant of Vlastzrn LhnStock's prohibition of multiple taxation,shich is tbreatercd wlreneven one State's actof overreaching combines with the possibmrythat anothen Stat€ will el.''n its fair share ofthe value taxed: the portion of vatue byufiich one State exceeded its fair share wouldbe texed again by a Stete properly layingel-irn tO iL

[51 For oven a decade nortr, we have as-sess€d auy threat of mdapportionment byaoldng rvhethen the tax is "intcmally eonsis.tent' and, if so, wbether it is *extemalty

115 SI]PBEME COTIRT REPORIER

consistent' as well See in. at 261. f09S.CL, at 589; Contzinet Corp., szpra 463U.S., at 169, f(ts S.Cr, at W, Internalcorsisteney is preserved when the impositionof a ta:c identical to the one in question byevery other Sate would add no burden toint€rsbt€ conmerce tbat intrastat€ eom-mense would not dso bear. This test asksnothing about the degpee of economic realityref,ected by the ta:q but simply looks to thestrrrchrne of the ta:r at issue to see whetherits identical application by every State in theUnion would place int€rstste eommerce at adisadvantage es compared with cotnmerceintrastate. A faihrre of internal corsisteneyshows as a mstter of law that a State isaftempting to talce more than its fair share oftaxes Arm the intelsate ransaction, sineedlowing such a ta:( in one State would placreinterstate commerce at the'merq of thoseremaining Ststes that might impose an iden-tical ta:r W euir\ White & Prinae, WUS., at 4tl$ 59 S.Ct, at 8?7-828. there isno faihrre of it in Utis qase, howerver. Ueyery State wene to impose a tax identical toOklatroma'q tbat rs, a tax on tidcet saleswithin the State for favel originating therc,no sale would be subjeet to more than oneState's tax.

t61 E:rtemal consistency, on the otherhen4looks not to the logical consequences ofdoning, but to the economic justification fctle Sate's ehim upon the vzlue taxed, todiscover rchether a State's tax reaches beyond that portion of vdue that is fably abtributable to economic aetivitywithin the tax-ing State" * hldfurg, tupm,488 US, et2@,109 S.Ct, at 589; Conrainn Corp., *u-pm,48 US., at 16ts1?0, lG| S.CL, at842.-?f4g. Herne, the threat of real multiple taxa-tion (thougb not by literally ideutical stat'ut€s) may indicate a States impermissibleoverreaching. It is to tlis less tidy world ofr.ed taxation tbet we hm now, and at lengtb.

I

the very t€m 'aplnrtionment' tends tocoqjure up dlocation by peroentages, aDdcrhere taxation of income from int€rstatebnsiness is in issue, apportionnent disputeshave often centcrcd around specific foradas

for slieing a taxable pie among several Statesin whidr tle taxpayerrs acdvities conributedto taxable value. ln Moorrn'an Mfg. Co. 'o*.

Bozr, 4t? U.S. 96?, 98 S.Ct ?:J40,57 L.Edzd19? (19?8), for exa'nple. we consideredurhether Ioqz eould measure an interstatecorporation's taxable income by attributingineome to busines.s wittrin ttre Sate '5n thatproportion which the Sgtss sales made withinthe state bear to the total gross sales.'' Id,st270,98 S.Cr, zt?'?42-843.

'TVe held that

it could. In Container Catpratioa we de-cided whether California could constihrtional-ly compute taxable ineome assignable to amulsurisdictiond enterprise's instate aetivi-ty by apportioning its combined business in-come according to a fomula'based in equalparts, on the proponion of [such] business'total payroll, property, and sales whictr arelocated in the ta:cing State." 463 US., at1?0, 103 S.CL, at 2943. Aglain. we held thatit could. Finally, n Cenrml fuAlmtnd weheld that New York's taxaiion of an inter-state busline's gtoss reeeipts wa-s constitu-tionally limited to that portion refleetingmiles traveled within the ta:ring jruisctiction334 US., at 6&3, 68 S.CL, at 1266.

t?l In reviewing sales talres for fairshare, bowwer, we have had to set a diffen-ent cqrrse. A sale of gpods is most readilyviewed as a discrete event facilitat€d by thelaws. and amenities of the place of sale, andthe transaetion itself does not readily revealthe extent to which eompleted or anticipatedint€rsate aetinity affects the vdue on whidra buyer is ta:red.

'We have therefore consis-

tently approved taxation of sales without anydivision of the .tax base among differentStates, and have irutead held such taresprtperly measuable by the gross ctrarge forthe puretrase, rcgadless of any activity out"side the axing juridietion that might haveprec€ded tbe sale or might ocsur in thefubre. See, ag., M{roWriak u Beruhd-Wtitp C@l Mintu g Co, 309 U.S. 33, 60 S.Ct888, 84 L-Ed. 565 0940).

Sudr hes been the rule even when theparties to a sales contract specifically con-t€mplat€d interstate morement of the goodseither ilnmediat€ly before, or after, thetransfer of ovmenship. See, ag., WardeirConado Inn a. Florine DepL of Ramnn ATI

1339

u.s. l, 106 s.cL 2369, 91 L.Ed-gd r (1986)

(upholding sales ta:r on airplane fuelt: .Stote

Tas Conmth of Utah o*. Paci.ftc Stotzs Cost

Irvt Pipe Co..372 U.S. 605, tlil S.Cr 925, l0

L.Ed2d 8 (1963) lper atriazz ) (upholding

ta\ on sale that conrcmplated purchaser's

intersate shipment of goods immedirately af-ter sale). The sale, we held, \f,as "an activir.vwhieh ... is subjeet to the starc ta:iing pow-

er' so long as taxation did not "discrimi-

natdeJ" ag3inst or "obstnrc[t]" interstate

commerrce, Berurind-White, 309 U-S-, at 58,60 S.CL, at 398, and we found a suffi,cient

safeguard against the risk of impermissible

multiple ta:ration of a sde in the fact that itwas consnmmat€d in only one State. As weput it in Berui;rd-White, a necessary condi-tion for imposing the tax was the occurrence

of "a local activity, delivery of goods n'ithinthe State upon ttteir puretrhse for corsumption." IbfuL So eonceived, a sales tax oncod, for eranple, could not be repeated byotler States, for the same coal was not imag-ined ever to be delivered in bno States atonce. Conversely, we held t}at a sales taxeould not validly be imposed if the purehaser

dready had obtained title to the goods asthey were shipped fnom outside the taxingStat€ into the taxing State by common cari-er. Mclnd, a. J.E. Diltqofih Co., @ US.vI, u s.ct 1023, 88 L.Ed. 1304 (1944).Ttre out'of-state seller in that casie \nsthrougb selling" outside the ta:ring State.Id,2t330,64 S.CL, at 1025. In otherwotds,the very eonception of the cotnmon sales ta:ron goods, operating on the bansfer of ownen-ship and possession at a partieular time andplace, insulat€d the buyer from any threat offirther ta:ration of the transaction-

l8l In deriving this nrle covering taxationto a buyer on sales of good-e we werc nof ofsourse, oblivious to the possibility of zucces-sive texadon of related events up and downthe stneam of commereq Srld our cases arreimplicit with the rmderstanding that theCommeree Clnrse does not foltid the aetualassessment of a sueeession of taxes by differ-ent Sates on distinct errents as the sanetangible objeet flovrs dong. Ttrus, it is ab:uisn tbat a sales tax to the buyer does notpredude a ta:r to the seller upon the ineomeearned from a sale, and there is no constitu-

OKIJIIOMA TA)( COMI.I v. JEFFERSON LINES' INC'Clrcg ll5 S.CL l33l (l!t!t5)

1340

tional trouble inherent in t}e imposition of a

eales tax in the State of delivery to tlreeu$omer. even though the State of origin ofthe thing sold may have assessed a properrl'

or Beveranee tax on ii fu Bentthn-Whitp,cupm.309 U.S., at S3, 60 S.Cu, at 396; cf.Cotrmonnolth Edisua Co. o. Montnna, 63u.s. 609, 101 s.cr ?p,l6, 69 L.Edzd 884(f98f) (upholding severanoe tax on coalmined within the taxing Sate). In light ofthis settled reatrnent of taxes on sales ofgoods and other suceessive tares relatedttrough the stream of eommeree, it is fair tosay t}at beeause the taxable event of theeonsummated sale of goods has been found tobe properly treated as unique, an intemallycnnsistent" eonventional sdes tax has longbeen hetd to be externally consistent as well

2

tgl A sale of senices can ordinarily betreated as a local state event just as readilyas a sale of tangible goods caq be locatcdsolely \riftin the State of delivery. Cf,Goldberg a. Sw4 488 U.S. 252, t0g S.Ct582, 1@ L-Ed2d tr7 (1989). Alttrough ourdeeisional law on sales of sen'ices is lessdeveloped tlun on sales of goods, one eatego-ry of cases dealing with taxation of grosssales receipts in the hands of a seller ofserriees supporG the vielw that the taxableevent is vfrolly local. Thus we have heldtlat the entire gross reeeipts derived fromsales of services to be perforned wttolly inone State are taxable by that Sat€, aotctitb-standing that the eontract for performance ofthe senrriees has been entered into acrossstate lines with qrstomers who reside outsidethe taxing State. Western Lhn Stoe* o.Bttrpou of nevnnn 308 US. 250, 58 S.Ct646, & L-Ed- 82S (1Sl$. So, too, as we havedready noted, erven where interstate drsula-6on eoafibutes to the value of nagzzinesdyertising purchased by the ostomer, wehave beld that the Commerce C}ause doesnot peclude a tax on its full value by thpStat€ of publication" Id, a,t?il,?*?59,8S.GL, at &18, 54S680. And wtrere the sen-vices are performed upon tangible items re-hiwed from and delivered to out'of-stateerstmerg the business perfoming the s€r-vices may b taxed on the full gross rreeeipts

r15 ST'PREME COIJRT BEPOBIER

from the serrrices, because the;- were per-forured wholly within the ta"ting State. De-panment of Tna'suU qf Inn t'. Inptpm-Rislwdsqn Mfg. Co.. 313 U.S. 252, 61 S.Ct.866,85 L.Ed. fgf3 (f941). Interstatp actiqrnay be essential to a substantial portion ofthe vdue of the serrrices in the first case arrdessential to performance of t}te senrices inthe secon{'but sales sith at least partialperfonnance in the ta:cing State justilv thatState's taxation of the transaetion's entirtgross receipts in the hands of the seller. Onthe analogy sometimes drawn between salesarrd gross receipts taxes, see IntqrntionlHannstsr Co. a. Deportmcnt of Ttzo^sury,3eZ US. 840, 347-348, 64 S.Ct" 1019, lv?z-t0Z3,8S L.Ed" f313 (f944); but see NurtntCo. o. Depofi,menf of Rewnun of IlL, Wus. tr94, 537, ?l s.cl'8ri, 380, 95 L.Ed. 5l?(1951), there would be no'reason to supposethat a different apportionment would be feasible or requir€d when the ta:r falls not on thesellen but on the buYer.

Cases on gttss receipts from sales of s€r-vice indude one fdling into quit€ a differeutcategory, hmever, and it is on this decisionthat the taxpayer relies for an analogy saidto control the resolution of the case befoneus. I! 1949 the Court decided Cenrralfuyhfrund Linos, Ittr- o. Mealsy, 334 US.6i3, 68 S.Ct 1260, 92 L-Ed. l6if3, sbikingdocm New YorlCs Foss reeeipts tax onfansportation services inposed without fir-ther apportioument on the total rec€ipts fr@Nenr York sales of bus selrices, ahnost haEof vfuid were actually provided by caniAethrougb neighboring Nelw Jersey and Peursyhania the Cout held the statute fatallyflawed by the faihre to apportion taxabhreceipts in the sane proportions tbat milchzveled through the various Sates bore tothe total. lbe similarity of Centml errcy-hntnd, to this case is, of course, striking, andon the assumption that the economic signiilqance of a grnoss receipts tax is indistinguish'able from a tax on sales the Court of Appealsheld that a similar nileage apportionnent isrequired here, see l5 F34 at !I2-S, as tleta:rpayen now argues.

We, howerrer, tldnk rhzt Cedml fuyhmnn provides the wmng analogr for srsroing the sales tax apportionment guestion

OK"AEOIUA TAX COMtri v. JEFFERSON LINES. II{C-Cltcrs ll5 S.CL tt3l (ltt5)

l3{ I

herr. To be sure. the two cases involve ttreidendcal serrices, and apportionment bymileage per State is equally feasible in eactr.But the tn'o diverge enrcially in the identityof the tarpayer and the consequent oppoftu-nities that are understood to ecist for multi-ple taxation of the same tatcpayer. CnfralCrtzyhmnn, did not rest simply on the mathe-matical and adrriniseative feasibility of amileage apportionment, but on the Court'sexpress understanding that the seller-ta:rpay-er was exposed to ta:ration by New Jerseyand Pennsylvania on portions of the samereceipts that New York was ta:cing in theirentirety. The Corrt thus rurderstood thegross receipts ta:( to be simply a variety oftfl( on income, which was required to be'apportioned

to reflect the location of thevarious intprctate aetivities by vrlidr it waseamed. This rurderstanding is presu:nablythe reason Orat the Cenfml fuVlwundCourt said nothing about the arguably localcharacter of the levy on the sales transac-tions Instead, the Court heeded Benoinn-Wllifp 's warning about '[pffilege taxes re-quiring a per'centage of the gross receiptsfrom interstate transportation,' whidr "if

sustained, could be imposed wtrenener theint€rstate activity oc'curis....' 309 US., at45-46, n- 2, 60 S.CL, at 391, n Z

Here, in eontrast the tal( falls on thebuyen of t}e serrrices, who is no mote subjectto double ta:ration on the sale of these ser-vices t}an the buyer of goods would be. firetaxable errent eomprises agreemenf pay-ment and delivery of some of the sewiees inthe taxing State; no other State can claim tobe the site of the same combination. Theeeonomic activity represented by the rcceiptof the ticket for 'eonsumption' in the forur ofeommeneement and pa*ial pruvision of thetransportation thus dosely resembles Ber-uhn-Wdtn's 'delivery of goods within theState upon their purehase for eonsumption""id,. at 58, 60 S.CL, at 398, specialty giventhat full *consumption' or *use' of the pur-chased goods within the taxing Sate hasnsver been a condition for taxing a sale ofthose goods. Although the taxpayer seels to

5. Altbough New York's tax rcached the grossreceips only hom ticlet salcs within New YorkState, 334 U.S., at 60{, 666, 68 S.Ct.. at 1166-

discount t}ese resemblances b.v argrring thatsale does not oeeur until delivery is made.nothing in our caselaw supporls the r.iew thatwhen delivery is made b1'senices proddxiover time and through spaee a separate saieoccurs at each moment of delivery, or r.heneach State's segment of transportatiorr sate-by-state is complere. The anaiysi.s shouldnot lose toudr n'ith the common understand-ing of a sale, see Goldbetg, 48 U.S.. at 262.109 S.CL, at 589: the eombined events ofpayrnent for a tid<et and its delivery forprcsent eotnmencement of a r-rip are eom-monly rurderstood to suffiee for a sale.

In sum, the sales taxation here Ls not opento the double taxation analysis on nhich Ce?r_tml fuyhmnd turned, and that decisiondoes not control. Before we elassifl, theOldahorna talr with standard ta:rcs on sales ofgoods, and with the taxes on less eomplicatedsales of senriees, horvarer, two questions mayhelpfully be considered.

3

Although the sale \rith partial delivery can-not be duplicated as a taxable event in anyother State, and multiple ta:ration under anidentieal ta:r is thus precluded, is therc apossibility of sueeessive taxation so doselyrelat€d to the transaction as to indicate po,tential unfabness of Oldatroma's tax on tlefull amount of sale? And if the arswer to.that question is no, is the very possibility ofapportioning by mileage a sufficient reasonto eonclude that the tar exceeds the fairshare of the State of sale?

z

The b:rpayer argues that anything but aCenfml fuyhwrd mileage apportionmentby Sate will orpose it to the same threat ofmultiple taxation assumed to eldst in thatcase firttrer taxation, thag is, of some por-tion of the vdue already taxed, though notwrder a stahrte in every respect identical toOklatroma's. But the claim does not hold up..The taxpayen has failed to raise any speetreof successive taxe.s that migfit require us toreconsiden wtrether an internall.v consistenttar on sales of serrdces could fail the eiternal

1267, 1267-1268 (Murphl', J., dissendng). themajorit-v makes no mention of this fact.

ruz U5 SUPREME COT]RT REPORIEB

eonsistcney test for lack of further apportion_ment (a result t}at no sales ta:i hL eversuffered under our ceses).

rf, for example, in the faee of Ollahoma,ssales tax. Te:ras were to lery a sustainable.apponioned g"oss receipts tax on the Texasportion of favel filom Otclahoma City to Dal-las, intersate travel would not be orposed tomultiple taxation in any sense aiferent ttneoal for which the prrducer Eay be taxedlst at point of sever:anee by Montana anathe customer tnay lat€r be

-taxed upon itspurctrase in New york. the multiple taa_

tion placed upon int€rsat€ cotnmerce bysudr a eonfluenee of ta:res is not a surrcnrralevil t}at flows from either tax indiriduaUt;6. - Arry additional gross receips tax imposcd uponthe intersarc bG [n *oiid,il *rrr*, itsclfhave to neslcct well-rmdersu- "o*unrtional

scictures. Thus, for cxanple, Texas could notB 9o bus company on thjfuII raluc of the bussernce bom Oklahoma City t r Daila< whcn thcticket is sold in Ofbhda, bo",r". that tax:-:lj, Totg-Tber tbings, L i",."*ffy ir,"o*stlsrcnt. And if Texas were to impose a tax upont:

b* cgmpanl measured bV Oe portion ofgoss receips re0ecting instar aavel it wordjfrave to tnpose taxcs on in-statc and intcrstatc3ournela atike. In the cvcat Tcxas cbose to limitthc burden of succcssive taxes arributablc to thesame transaction by combiniag an apponionedgryy

ryeints tax with a credit fo. sales taxe"paid o Texas, for example, it *oJa f"" to grvccqrral trtauent to scrvice into Texas purchasedsubjcct to a sales tax in another atat , which it^could * b granting a credit for sales tarcs paid1o any Sate. Sce, e-g., Hanndordr. Sit* M;;9:: 3p !r.s. sz, s-s3_sEe, 3i s.c,.-sz 4, s2z_s28, 8l LEd. 814- (r?s7)-tu*Jaing ulre taxwhich provided credit no. ofo-,*J-iid to any!o!.), Hailibwton _O;I WeIt- Cil[mg Co. v.pit!, 323 u.s. u: zot al s.ci-ii6i, rzol, roLEd.2d 202 (t963) (.;[eh,r.t-*il", for in-sate aad out-of-starc ta:rpayers Sr"Oa"ty siuratcdis the condition precedent i";;-r"[d ;e rax ongoo$ imported hom out-of-s-*tc,i1ia4,larrd u.Louisiana,4st U.s. ZzS, zii,--t6i 5c,. zrrl,?l-35.6E LEd2d 526 09ir) (rt"iUrrgt** Uu-isiaDa's "first use,, tax on inp"ncd-ga, because"the pacera of scdits *J;;;,i8i, "[_".aunder the ... staruJe undeniabf "i"f"ro Oi,lTfpJ: of eq'rili3y"); Tytcr Hpirrait io, t*.u-._yes_nytgton State hpt. of Rcvcr.tuc,4g3 U.S.?3?,-?4uz4E, roz s.ir ziro, i{uzazo. szLEd.2d t99 (t987) (sclling aimG;hi"g,";bgross

-rccciprs wbolesaling tax cxempting in-YE,_ but aot out€t€tatc, maaufacnrrers); see4f Sosron Sroct Fahange ". Sr.r" f*'Cotmt{n,g: -U.q. 3rE, 331_3s2, gis.ci iig. eoz_608, s0LEd2d 5r4 (re77).

._f}.Fl *: h.r: not hcld that a Sarc impo+rng an apponioned gross rcceipts tax that gnrnts

but it is rather the *accidental incident of

interstate oommeree being subjeet to tq,;$trTTt taxing jurisdicrions." t ock}art tlfu lutoormon Mfg. Co.,4it? U.S., at fi, ggS.CL, et &tHT!

!r[91hqs t]re ta:rpayer made out a case thatOklatroma's sales tax er?oses any bu.ve, of,ti*et in Oklatroma for travel into anotherState to multiple taxation from taxes i.pou.Oupon passengerc by other States of passags.sinee a use tax, or some equivalent on theconsumption of seryices, is generally leviedto compensate the taxing State for its inca-pacity to reactr the corresponding sale, it iscommonly pair€d with a sales ta:i seq ag.,

a crredit for sales taxes paid in-state must alsoerend such a credir p il:, taxes paid ou;;statc, scc, e.9., Asseiatcd, tn&sAcs of *r;.-;.Lohnan sll U.S. 1;, -, and uo. I aad 2.ll4 S.Cr tEt5,_1819, and nn. t and a iZiLEd.2d 639 (l99t); Hellibtmott,-s7qn, 3lJU.S., et 77, E3 S.Cr, at t20?_t2OC'dda-i-concurriDg); SiJas_-Mann, ilpn, 3oo U.il;5t7, SZ S.Cr", at j2l; see .ti WiUt** v.Va.,?aritt,412 U.S. 14,21_22,lOS S.Ct 2465.24:lf-2471, E6 LEd2d ll (t-9E5), *. l"r notcd thatequaliry of uraucnt of interstate *d ;;r;activig hes beco the cornmon rbemi anoog tlrceaircd (or "compensatia-g,,)

tax schemcs thethave passcd constinruonal-nud, il, ag., gor-y :r* ExcIwEe,_Wm,429 U.b., at 35i_aai,97 S.Cr, at 60?-6OE. !v. t *-iia*a

-.;upheld a tax in thc Fge of a nrbstantiared "hd:that it providd crcdis for the afryer,;E;:ment of in satc uys Utrt jrited t"-lii*a irJlgrcdit to pa]'ment of equivalen o",-"f-"taro ,"*oT.o.tho contrary- in upholding ,.* ,"i._rcs psoyidiDg credis for taxcs p"id i";; and occa-sioned-by tle same ransaction, we harrc oftcopoiDred to tbe concomitant "r"ait fr*isiorr" fo,taxes paid out-of-statc as srpporting our conch-sion that a particular t"x pasi"a ;ticr becarreit treatcd out-of-statc and in-state Jrpalcrs afna!!99,_".t- IuI Containcrc_Int,t Corp. ". nUaUstn,soz U.s. -r _;_u3 s.cr rbs,lloe_rros,122 LHFFd.2d 421 (t993); DJI. Hoittcs Co. v.McNonnq 4E6 U.S. 24, gt, l0g- SCr t6tg,l62yt6z4, r00 LEdJd 21 09rs)-i.rn" ...taxing schene is fairly apponioni, tr n O*:idcs, a credit aEainst is

-rrs. t"*-f"i Jo ,"rcs

Int.navc been paid in otbcr St tes,); erturlfuading Co. v. Statc Tc Contn,i ofiana" Wu.s. 335, 6,f s.cL to2E, E8 Lra. ig09 (19+a);S1{:!ff, s,.rna,300 U.S., ,, Sga,li S.Cr, at527-528. - A geocral naquircmen, of "qrrd oo"o-ncnt is thus amply etcar tom * irooa_awe erpncss-ao opiniolr on the necd-frr equeltreament whcn a cttdit is allowed for palmentof in- or out of-starc_F1* Uy . tfirU-p""ty. SoDanuIIv.Indiarra.226 U.S. ggO, gji.t. rZO, SZLHFFr'..267 (rer2).

D.H. Holmcs, 86 U.S., at 91, l(ts S.CL, atL623-l62; Bostnn Stock Erchonge a. StateTos Comn\u 429 U.S. 318, 931-332, 9? S.Ct599,607-€09, 50 L.Ed2d 514 (197?); Hennc-fod a.Siros Mosut Co., 300 U.S. 577, 57s.cr 5?1,8L L.Ed. 814 (1937), being applica-ble only when no sales ta:r has been paid orsubjeet to a eredit for any such ta:r paid.Since any use tax would have to eomply withCommerce Clause requiremeuts, the taxscheme could not apply differently to goodsand senrices purchased outof-state fromthose purchased domestically. Presunably,then, it would not apply when another State'ssales ta:c had previously been paid, or wouldapply subjeet to credit for such paymenL Ineither evenL the Oklatroma ticket purctraserwould be free from multiple ta:ration.

True, it is not Oklahorna ttrat has offeredto provide a mdit for related axes paidelsewhere, but in ta:ring sales Olclahona mayrely upon use-taxing States to do so. This ismerely a practical consequence of the strue-ture of use taxes as generally based upon theprimacy of taxes on sales, in that use ofgoods is ta:ced only to the extent tbat ttreirprior sale has escaped taxation Indeed tlreDistrict of Columbia and forty-four of theforty-five States that impose sales and useta:cs permit nreh a cnedit or exemption forsfunila' taxes paid to othen Stat€s. See 2Iletlerstein & Hellerstein 118.08, p. l&,48; 1All States Tax Guide 11256 (1994). As onestate eourt srrnmsriz€d the provisions inioree:

"Ttrese credit prwisions mate a natiorralsptcrn rurder whidr the fist state of prrr-ctrase or use imposes the tar Thereafter,no other state taxes the transaction nnlessthere has be€n no prior tal( imposed . . . orif the tax rate of the prior taxing stat€ isless, in ufiich case the srbseguent taxingstet€ imposes a tax measured only by thediEerential t?te." ^KSS hansponafintCotp. u Balfut\ I NJ.Ta:c Zl.3, W0e$0.

ril3

itsef for sirnilar ta\es placed upon the rar-payer by other States. See GoldDerg. 48SU.S., at 264, 109 S.Ct., at 59Ga591 (*To theextent that other States' telecornmunicatiorstaxes pose a risk of multiple ta:radon, theeredit provision contained in tbe [t]a\ falcroperat€s to avoid acual multiple ta;ation").In tbat case. unlike the sales and usiesehemes posited for the sake of argumenthere, eadr of the eompeting sales taxes n'ouldpresrnably have laid an equal clain on thetaxpayer's purBe.

b

t10l Finally, Jefferson points to the factthat in this case, unlike the telephone eom-murication tax at issue n CroWberp, Okla-homa could feasibly apportion its sdes tax onthe basis of mileage as we required Nen'York's gross receipts tal( to do in CenhalfuVhnnd. Although Goldberg indeed not-ed that'[ah apportionnent formula basedon mileage or some other geographic divisionof individnd telephone eqlls would produceinsurmountable adminisfative and techno-logical barriers," 488 US., et 2&-2fF., 109S.Ct, at 590, and alt}ough we aglee tlrat nocomparable bariers e:cist herg we nonetheless reject the idea tlpt a particular appor-tionment foruula must be used simply be-cause itwould be possible to use iL lVe havenever required that any particutar apportion-ment foraula ormethod be use4 and wtren aState haq chosen one, an objeeting ta:rpayerhas tbe burden to demonstrate by ''clear

and cogent evidence," that '"the ineomeattributed to t}le Stste is in fact out of dlappropriate prcportions to the businesstransacted ... iD that State, or has led to agrossly distort€d result.'" Contninar Corp.,468 US., at 170, l(ts S.CL, at N4\ quotingMoonnan Mfg. Ca, 437 US., at n4, WS.CL, at?845 fintsnal quotation merks omitted; eitations omitted). that is too nudr forJefferson to bear in this case. It fails toshow'tlrat Oklahorna's tar on the sale of

On"AgOlIA TA)( COM'N v. JEFFERSOIT LINES, INC.Clrcesll5 S.CL t33l (1995)

}e case of ttrreatened multiple taxation fansportation imputes economic astiyiff to'rhene a sales tax is followed by a use tax is the State of sale in any way substantiallyhusdistinguishablefromtheeaseof simulta- diffenent fitm that imputcd by tbe garden-reotls sales taxes considered n Gold,furg, variety sales taJq which we have perennidtyrhere we were reassured to some degree by sustained, erren though levied on goods thatne provision of a eredit in the disputed ta:r have traveled in intersta,te commeree to the

TW 115 SI'PREME COIJRT REPORTER

point of sale or that will move acnoss state S.Ct, at 58&589t Contnino Cotp-. sl{tm.

lines thereafter. See, ag., Wordoir Cundo, 463 U.S., at 169-1?0, f()3 S.Ct.. at 29{2-

Inn a. Ftoridn DepL of Ranta 4? US. 1, 294i1.?106 S.Cr 2369, 91 L.Ed2d I (1986); McenLdritk o. Beruhd-Whitp CNJ Miraing Ca-, o309 U.S. 83, 60 S.Cr 3f18, 84 L.Ed. 565 v

(1910); Stntl Tos Comrnh of Utah. o. Pacific tUI We norr ttrrn to the remaining twoSrot€s Cost lron Pipe Co.,3?2 U.S. 605, 83 portioos of Cottrylztc Auto 's tesL whieh reS.Gt g/i, 10 L.Ed2d 8 (1963); see dso quire the talr must'not discriminate againsrWeEbn Line Stdc, 309 US-' at 259' 58 interstate commerge,l *d must be "tairly

S.CL, at 550 (upholding tax whene mea$lne rebt€d to the services provided by theof the ta:r Sndude[s] the augmentation at- SAte.' 4il0 US., zt 279,9? S.CL, at 10?9.n{butable to the [int€rsEt€J cornsrerte in Okbhoraa's ta:r meets these demands.which [ttre objest of the tax] is employed');hllfurg, 488 u.s., at 262,109 s-cl' ": 589 tul A stat€ may not'impose a ta:s whieh(upholding tax upon the pnrdrase of an Tg- aiscrirnioates against interstate conrmenestate telephone e"ll rthieh had "many

:t_T: _. U, prouidid a direc,t, commercial advarr-clraract€risties of a sales tatr [eJven t"r. ; iocal b'siness." Notthwestnn Statestlrough such a retail ptrchase is not a purely

;r,r"d Cement Co. ,. Minnnsotq 'Eg US.local event sinee it triggers simultaneous ac- - --

;; -""-"

..- -

o.otiviry in several sates'). No, ai?6fi- 1*:j58'

?9 S'Ct 35?' 362' 3 L'Ed2d 421

homa's tax raise any F€at€r th"e";;;"16- 9'^u?t see also Amcricon' Trunkbq Asszc'

ple taxation than those sales taxes th"t hav. fu '' scheinn' 483 u's' 266' 269' ryr s'ct

passedmustentimeandagain Th;;til Y' ?83P.'?8r',' 97 L'Ed2d 26 O98n'

no neason to leave the line of fogtt-aG Thls' States are barred from discriminating

precedent and lose the simplieity tf;;6- Sgai:st foreign ent€rprises competing wih

eral nile sustaining sales talra .*o.E tV !$ businesses' sere' eg" Schebwr' suw' et

full value, simply to carrre out an o..edoi ry, lW S.CL, et &L-z84Z. and from dis-

for the sgbcategory of sales of interstatc crinineung sgainst commercial activiw oe'

tansportaUon **i*. We aceordingly eon- r1u1"g outside tlte -tafng State' see' 49,

clude tbat Oklahoma's tax on ticlet gglles for BoEt//tt Stock Enlnnge a' St4fu Tu

travel originating in Oklahoma is extemally Con'ntn, 4n US' 318' 97 S'Ct 599, 50

consistent, as reaching onty the acthrily tak- L-Ed2d 514 0977). . No argument hes been

ing place wiglin the taxingstate, tbat is, the made that Oklahorna discriminatas against

salgof the seryice. Cf. 4 xI261-264, 109 out"of-state enterprises, ed there is no mer-

7. Justice BRtfER would rcicc! rwiew of the raxrmder general sales rax principlcs in hvor of ananalog between sales and grcs receipts taxesufiich, in thc'lissent's yicw, are without "prac-

rical differcnce," post, et -. Nthough bisdisscnting opinion righdy counsels against theadoption of pnrcly formal distinctions, cconomicequivateoce done has itnilarly not bcen (andshould not bc) the touchstonc of commerceclrusc jurisprudenca Our dccisions cannot bcreconciled with the view tbat tuto targ mustUevUUV bc cquatcd for purpccs of constinr'donat analpis byvinue of thc hst that bosh willultimatcly bc "pass[d] ... dong to thc custom-cr" or calcrrlatcd in a similar fashion, iEid. In'dce4 rrcre that to bc thc casc, wc could uot, brcxamplc, disuiss successive taration of tbe er-traction" sale, and income hom rhc sale of coal

' as coBsi$cnt with thc Commare Cliausc's prohi'bition against multiple taxation.

Justicc BREIER's opinion illuminares the dif'fercace bctwcen bis vicw and our own in its

suggestion, post, at -, that ou disagreemeotturns on differbg asscssments of the force ofcompeting analogics. His analogy to Cantral&eyhond derives soengfh from characterizingtbe tax 35 falling on "intcrstatc tl''ayel," patt at-, or "transportation"'

72ost, at -. Oranalogr to prior ciascs on taxing sales of goodsaud services dcrirrcs force from identifying 6ctarpallcr in carcgprizing the tax and from tbevaluc of a rmiform rulc gorcrning taxation on tbcoccasion of what is generally undsstmd as asalcs rransactioo. The signifrcance of tbe taxPay'eCs identity is, indeed, central to the Courl's

. longstanding recognition of stnrcnrral differeoccsrhai permit successivc taxarion as ao incident ofmultiple taxfuE juridictions. The decision todayis only the }atcst example of such a recognitionaod briags us as closc to simplicity as the con'ceptual distinetion bctrlecn sdcs and incometaxation is likely to dlow.

r _ -

it in the argument that ttre ta:r discriminatesapinst interstate aetiriry.

Tire argument proffered by Jefferson andaminn Greyhound Lines is largely a renrrit-ing of the apportiorunent ehallenge rejectedabove, and our response needs no reiterationhere. See Brief for Respondent 40; Brieffor Greyhound Lines, Inc., as Amian CurincWn. Jefferson takes the addicional posi-tion, howwer, that Oklahoma discriminatesagainst out-of-state favel by ta"xing a ticket'at the full 4Vo rate" regardless of whetherthe tidcet relates to "a rcut€ entirely withinOklahoma" .or to travel 'only f0 pereentwittrin Oklahoma" Brief for Respondent 40.In making the sarne poinq ornistts Grey-hound invokes our decision in Sclwincr,whieh sttck down Pennsylvania's flat ta:r ondl brucks caveling in and tluough the Statcas llainly discriminatory.' 483 U.S., at 286,10? S.CL, at 2fH;0. But that case is not onpoint

ln Sclwiner, we held t}at a flat tar onEucks for the privilege of us"rg Pennsylva-nia's roads discrininated against interstatetravel, by imposing a cost per mile upon out-of-state trucks far exeeeding the eost permile borne by local trucks that genenallytraveled mone miles on Pennsytvania roads.Ibin The tax here differs from the one inScheintr, howwer, by being imposed notupon the use of ttre State's roads, but upon"!lre freedom of purehase.' McLeod o. J.E.Diluwtth Co., 322 U"S. U?, 380, 0l S.CtLt29, 1025, 88 L-Ed. 1304 (1944). Howarercomplementary the goals of sales and ruetaxes may be, tlre tar.able event for one is thesale of the service, not the buyeds e4ioymentor the privilege of usi'g Olclahorna's roads.Since Oklatroma facilitates purehases of theserviees equa[y for intrastate and intcrstatebavelers, dl buyers pay ta:c at the same rateon the vatue of their purclases. See D.H.Hollrnes, 486 U.S., zt &,, 108 S.CL, at l@l;d. Sclubvr, surna, 483 US., at 291, 10?S.CL, at M fElhe arnount of Pennsytva-nia's ... taxes owed by a tnrcker does notrary direetly .. . with some pmry forvalue obtained from the Stat€'). Thus, evenif dividing Oldahorna sales ta:res by in-statemiles to be caveled pruduees on average ahigher frgure when int€rstate trips are sold

1&15

than when tIe sde is of a \rholll' domesticjourney, there Ls no discrirnination againstinterstate travel; miles traveled sithin t}eSate simply are not a relevant proxJ* for thebenefit eonfened upon the parties to a sale-stransastion As sith a ta)i on the sale oftangible goods, the potential for interstatemovenent after the sale has no bearing onthe reason for the sales tax See. e.g.. War-doir Canada, Inn, ntpru. (upholding salesta:r on airplane fuelX 6. Commotrunalth Ed-ison Co. a. Montonn 4SS U.S. 609, 617-619,101 s.Gt ?p/l6, 293y2954. 69 L.Edzd 884(1981) (same for severznee ta:c). Only OlrJa-homa can tax a sde of transportation tobegin in that State, and it imposes the samedutl' on equallfi valued purctrases regardlessof whether the purchase prompts intersateor only intrasAte movemenl Ihere Ls nodiscrimination against interstate conmenee.

D[13,14] finrlly, the Commerce Clause

demands a fair relation between a tax andthe benefits corderred upon the ta:rpayer bythe State. See hld,furg, 488 U.S., at 266-297, r09 s.ct, at 591-59i D.H. Holmars?tw 483 US., a;t3P,44,107 S.CL, at 2698-2699; Cotttnorunolfh Edism. su,yrq 453us., at 621-,@9, 101 s.cl, at 2955-2960.The taxpayer ar€ues that the ta:r fails ttrisfinal pnong becarse the buyer's only benefitsfrom the u:ring Sate oeeur duing the por-tion of the journey that talres place in Ol&-homa The EJrpayer misundenstands the im-port of this last requfuemenl

t15l The fair relation prong of Complatcfudn requires no detailed accormting of theserviees provided to the taxpayen on accountof the sctivity being ta(ed, nor, indeed, is aSate limit€d to ofrsetting the publie costscreatcd by the taxed activiff. If the event istaxable, the pro eeds from the tor rnay ordi-narily be used for purposes unrelated to theta:rable evenL Int€rstate eommenee rnaythus be made to pay its fair shre of stateexpenses and ''contribute to the cost of pro'viding oll governmenal serrriees, includingthose sewices from whictr it arguably re-ceives no direct *benefrL"'t Golilerg, w-pra, 48 U.S., at 267, 109 S.CL, zt 5t2,

OBII\EOMA TAX COM'l.i v. JEFFERSOI'I LINES' INC.Cltes ll5 S.Ct- l33l (t995)

-

1346 r15 SI]PREME COI'RT REPORIER

quoting Conmonnnafth Eilisott wpro- 453

US., at 627, n. 16, 101 S.Cr' at 2958, n. 16(emphasis in origind). Ihe bus terminal

rnay not catch flre during the sale, and no

robbery there may be foiled while the buyer

is getting his ticket, but police and fire pro-

tection, along with tbe usnal and rsually for-gotten advanrages conferred by the State'smaintenance of a civilized societ5r, are iustifi-cations enough for the imposition of a ux

See i,td CorryIz:tn Anto's fourttr critcrion

asks only that the measure of the ta:( be

reasonably relet€d to the ta:rpayeds prlesence

or activities in the State- * Comtnon'

wnlth Eilisoa 453 U-S., su,Pm, at 626, @,

101 S.CL, at 2958, 2959-2960. What we have

already said sbows that demand to be satis'

fred hene. The tax fdls on the sale that

takes place wtrolly inside OHatroma and is

measured by the vdue of the service pur-

eha.red.

rvOklahorna's ta:r on the sale of uansporta-

tion services does not contravene the Com-mence Clause. The judgmmt of the Court ofAppeals is rerrerse4 accordingly, &d thecase is remanded for firttrer proceedingseonsistent with this oPinion.

ft is so odned

Justice SCALIA with whom JusticeTIIOMA.S ioins, conouring in the judgmenl

I agree with the Court's condusion that ,Oklahoma's sales ta:r does not facially dis'crininate agaiDst int€rsbte ootnmeroe- SeeantA st .-. That seems to me the mostwe can dernand to certify compliance withthe "negative Cornmerce Clause'-vfoidt is'begative" not only because it negates stateregulation of eommerce, but dso because itdoes aot appear in the Constihrtion- SeeAmcmno Ha*g Cotp. a. Ditvdor, Dinision ofTufrion, New Jercey Depctmen't of tluTrz,osury, 490 U.S. 66, 80, f09 S.Ct 161?'r@5-1646, 104 L.Ed2d 58 0989) GCALIAJ, conernring in judgxnent); Tgler Pipe In'd:ustripa Inc o. Wasldngton, Stata DepL ofB,ewnnn 4SB U.S. W, ?il, 25S265' lffis.cr 2810, wwA,?fgjf-'fPB., yl L.Ed2df99 (19trD GCALIA J., eonorring in partand dissenting in part).

I would not apply the remainder of the

eminentty rurhelpful. so-called *four-p41

test' of ConPlztP Atrto TrunsiL Inr' t Bm'd,g,4fi U.S.2?4. 2i9,97 S-Ct- 10?6. 1079' 5lL.Ed2d 826 (fgfi). Under t}e rpol Com-merse Ctarse ('The Congress shall havePowen . . . To regrilat€ Commerce . . . amongthe serreral Stat€s," U.S. Consl, ArL I, $ 8),it is for Congress to make the judgment thatintersAte commenoe must be immunizedfrom c€rtain sorts of nondiscriminatory sta13action-a judgment that may embraee (xs,

ours ought not) sudr imponderables as hosmuch \alue IisJ f@irlu attribufahle to economic astivi$ witldn the ta:cing State," andwhat constihrtes *foir rclatisn between a 1,1lsand the benefits eonfelred upon the ta:rpayerby the State" .*rtta,8t -, (emPhas-

es added). See Tglsr Pipe cuqm. 4tts US,zt %9,10? S.CL, zt ?fP;6- I look forsard tothe day wten Cotn'plete Aufn will take itsrightful place in Part II of the Court's opin-ion, anong t}e other useless and diseardedtools of orrr negative-Commerce4buse iu-rispnudence.

Justiee BREreR, with whom JusdceO'CONNOR ioins' dissenting.

Despit€ the Court's lucid and thoroughdisctssion of the relevant }aw, I am unable tojoin its condlrsion for one simple reasonLike the judges of the Court of Appeals' Ibelieve the tax at issue here and the tax tbatthis Court held rurconstihrtional i^ Ca*mlfuUrrfrurrd Litus, Ina a- MealsY, 334 US.653,68 S.CL 1260,92 L-Ed. 16itr3 (194t1)' an'for all relevant purposes' identical. Botbcaees involve taxes imposed upon int€rstatebus uansporation. In neither case did theStat€ apportion the tax to avoid taxing tbatportion of the int€rstst€ astiviff perfomted inother States. An4 I find no othen distb-guishing feaques. Hence, I would hold thatthe ta:c before us violates the Constitrtion forthe reasons this Court set forttr n CedmlCrrvuhmlnd.

Cefiml fuVhnnd eonsidered a taJ( im'posed by the State of New York on utilitiesdoing business in Nerw York-a tax called''[e]melgency tax on the ftnnistring of utilityservices.'' Id, at 664, 68 S.CL, at 1266

(Murphy, J., dissenting) (quoting New YorkTax Law $ 186-€). That ta:c was egual to'two per cemum" of "gross ineome," definedto indude'receipts received . . . by reason ofany sale .. . made' in New York 3:14 U.S-,at 664, 68 S.Ct", at L?-6f.:..-eL267. the NewYork ta.xing authorities had applied the ta:rto gross reeeipts from sales (in Nelv York) ofbus transportation between New York Cityand cities in upstate Nerr York over rtutesthat eut acnoss Nenr Jensey and Pennsylva-nia Id, at 654, 68 S.CL, ̂ t L26L-1262- theout"of-state portion of the rips accountcd forjnst over 40 pertent of toal mileage. Id, at660, 68 S.CL, at t2&.L266..

Jnstice Franldurter wrrote for the Cefim.Ifuyhmnn Court that "it is int€rstatrc oom-mence wtdch the Sate is seeking to read:"id-, at.661, 68 S.Ct, zt Lhffl. that the tedquestion [is] whether what the State is exact-ing is a constihrtionally fair demand ... forthat aspeet of the int€rstate commerte towhich Ore State bears a special relation"ibitL; and that by "its very natrre an unaPportioned gtross receipts tax rnalces int€rsbt€transportation bear morc tlan'a fair share ofthe cct of the local goverament whose pro-testion it eqioys,"' il, at 6&3, 68 S.CL, att266 (quoting Frceman a. Hewit, m US-2219, ?59, 6? S.Ct. n4, m, 91 L-Ed. 265(1940). Ttre Corrt noted tlat

'[iF New Jersey and Penrsy]rranira could,'laim their right to make appropriatelyapportioned e.lairns against that substantialpart of the business of appellant to wtliettthey afford protection" we do not see howou principle and in pr,ecedent sueh a claimcould be denied. Ihis being so, to allowNem York to impose a ta:r on the grossreceipts for the entire mileage--on the57.47% within New York as well as the4259% without-n'ould subject int€rsat€cornmeree to the unfair burden of beingtalred as to portions of its rwenue byStat€s whidr give protection to those por-tions, as well as to a State which does noL"334 US., at @, 68 S.Ct; at 1265.

Ttre Court essentially held tbat the taclacked what itwould later describe as *ext€r-

nal consisteney." Containn Cory. of Amer'in, a. Fmnrhise Tu 8d,463 U.S. 159, 169,103 s.cr 298.3, n42, n L.Ed,2tl545 (r9BB).

ril7

That is to say. the Nem York lan'riolated theCommerce Clause beeause it ried to ta\signrifrcantly more than *ttrat ponion of therevenues from the interstate aetivig'n'hiehreasonably reflects the in-state eomponent ofthe activiry being taxed." Goldbery r'. Srruel4tl8 U.S. ?52,262. f09 S.Cr 582, 589. 103L.Ed2d 60? (1989).

Ttre tax before us bears an uncann)'resem-blance to the Netr York ta\ The Oklahomastahrtc (a.s applied to '[thansportation

by eommon carriers") imposes an "excise

ta:(" of 4Vo on "t}e gnoss rcceipts or grossproceeds of eoch salpn made in Oklatroma.Oklastat, Tit. 68, $ 13tt(1XO (Supp.l988)(emphasis added). The Nen' York statut€imposed a 2% tar on the *receipts received. .. by rcason of an'y soln .. . made" in NewYork See nrpro, at - (emphasis added).OkJatroma imposes its tax on the total valueof trips of whidr a large portion may takeplace in other Steta. New York imposed itstax on the total vdue of trips of whidr a largeportion took place in other Sates. Nen'York made no effort to apportion the ta:( toref,ect the comparative cost or value of thein-sate and out of-state portions of the trips.Neithen does Oldahorna Whete, then, canone frnd a critical diffenence?

Not in the languege of the two statutes,whidr differs only slieiltly. Oldatrorna callsits statute an *occise tan" and "levie[s]" thet:x \rpon dl sales' of transportation NewYork called its tal( an'[ehergeney tax on.. . serrriees" and levied the tor on ''gross

incomg'" defined to indude " teteipts . . . ofany sale." This linguistie difference, howor'er, is not significanl As the maioriW proPerly recogrizes, purely fonnal differenees in'tenninologr should not malre a constihrtionaldiffenence. Anfz, dL ---. In bot}instanoes, tbe State imposes the tax on grossreceipts as measured by sales. Both tsf,es,ttreq world seeln to have the same practicaleffect on the, inhenently int€rstat€, busfansportation aetivity. If the Centnl CIwY-hmnd Court was willing to look tlrougbNem YorlCs fornal labels ("[e]merEpncy taxon ... serviees"; 'gross income" tax) to thesubstance (a t3)( on gross receipts fromsales), wtry should tttis Cout not do thesa,me?

OIS,AHOMA TAX COMN Y. JEFFERSOT{ LII{ES, INC.Clrcg l l3 S.CL l33l (1995)

1348 115 STTPREME COT]BT BEPORIER

the majority sees a number of reasons

wtry the result here should be different from

that in Ceilml fuUhtu rd" but I do not

think any is persuasive. First' tbe nlqiority

points out that the New York law reguired aseller, t}e bus company' to pay the taJqwlrereas the Oklahorna law says that the "tax

... shdl be paid by t}re cotsumer or user tothe vendor.' Okla.SaL fiL 68, $ f36f(A)(Supp.1988). This difference leads the ma-joriW to elraracterize the formen as a *gltss

receipts" ta:r and the latter as a constihrtion-ally distinguishable 'sales te:L" this differ-enoe, however, seems more a fornal, t'han apracrical diffenence. The Oldahoma law

nat es the bus company ("the vendof) and"each principal officer -. - personally liable'for the ta:r, whetber or not they collect it

from the cu$omer. Ibirl Olclahoma (as faras I can tell) has Dever tried to eollect the te:cdireetly from a qrstomer. An4 in any evenLthe stahrte tells the qrstomer to pay the tafnot to the Sate, but "to the vendor-' IbilLfire upshot is that" as a practical rnatter, inrespect to both ta:ces, the State will catcu]at€the ta:r bill by multiplying tbe rate tinesgross reeeipts from sales; the bus sompanywill pay the ta:r bill; an4 the conpany willpass tbe tax dong to the qretomer.

Second, the majority believes that this casepFesents e signifrcantly smaller likelihoodAan aia Ceilnl fuyhnnd that the out'of-stat€ portions of a bus tripwill be taxed bo0t"ty States cfii& give pnoteetion to thoseportions, as well as [by] .. - a Sate whidtdoes not.' Cenrml fuVhnnd 334 US-' at664, 68 S.Ct at P6il266. there is at leasta hint in the Corrt's opinion gltsg rhis is sobecause the '{taxable event' to whidr theOklahoma ta:r attaches is not the interctatetransportation of passengels but the sale of abrus tidret (combined, perhaps, with transpontation to the state line). *e utn, sl -("The taxable ervent eomprises sgreenent'palment' and delivery of some of the servicesin the taxing State....'). thus, the majori-ty nrggests that a tor on transportation (as

orpposed to the sale of a bus tidret) by adifferent State Eight be 'strecessive,' oittl&at -i but is not "double taxation' in aconstihrtionally relevanl vzy, lbid-; ser-' ontg3l - ("no other SUte can elnim to be the

site of the same combination,.). I concede

th* OL{ahoraa could have a ta:i of the kind

envisioned, namely one t}at nould tax the

bus company for the privilege of selling tiek'

ets. But, wtrether or not such a tal( would

pass eonstinrtiond must€r should depend

upon its practical effeets. To suggest tfu1tlre a:c here is constitutiond simply becaussit lends itself to redraracterizing the taxableeveut as a "sale" is to ignore economic reali-

ty. Because the sales tax is framed as 3percentagB of the tidtet price, it seems elear

tbat the aetivity Oldahoma intends to tat( isthe transportation of passengcrs-not sottre

other kind of condust (hke selling tiekets).

In any errent, the majority itseE does notBeem to belierre that OHatrorna is taxing

sometldng other than bus transportation; itseems to adcrowledge -ttte risk of multiple

taxation. l,be Court ereat€s an ingenious setof constihrtionally-based taxing rules in fmt

note 6--designed to shovr that any otherStat€ that imposes, say, a gross reeeipts taxon its Bttare of bus tidcet sales would likelyharre to grant a credit for the Oklatroma salestax (unless it foreed its own citizens to pay

both a sales tax and a gt'oss receipts tax).

But, one night have said the same in CntralGrpghnlnd. Instead of enforcing its appor'tionmeut requir€ment' the Court eould hsve

simply said thet once one State, [ke Nem

York, imposes a gross receipts tax on tt

ceipts reeeived . . - by reason of any sale " -made'in thet Stste, any othen State, fyingto ta:( the gross reeeipts of its sttare of brsticket sales, night have to give some kind of

credit the dificulties with this approachliein its complerity and our own inability to

foresee all the ways in which other Statesmight efiectively t8:( theh own portion of thejornney now (also) talred by Oklahoma Un-

der the Court's footnote nrle* is not a travel'

enwtro buys a tieket in Oklatrorna still thrcat'ened with a duplicative tax by a State tbat

does zot impose a sales tax on transportation(and thuq would not hane to ofier a cr.editforthe sales ta:( paid in Oldatroma)? Even if

t}at wene not so, the corstiUrtional pnoblem

would r€main, narnely that Oldahoma is bposing an unapportioned tax on the portion

of travel outside the Sate, just as did NenrYorll

OKIJIEOMA TAX COMN Y. JEFFEBSION LINES, INC. 1349Glrrertls s.cr. l33r (lttlt)

finally, the rnajority finds stlpport inC,oWerp o. &neL 488 US. 252, 109 S-C't8, 102 L.Ed2d 607 (1989), a case in whiehthis Court pemitted Illinois to tax intcrsatetelephone ealls t.hat originated, or tertninat-ed, in ttrat State. Howorer, the GoWhergCourt was carefirl to distinguish'cases tdeal-ingl with the movement of large physicalobjeets over identifiable routes, rvtere it waspracticable to keep tnck of the distanee ac-tualty caveled witttin the taxing State," id,at2il,109 S.Ct, at 590-591, and listed Caa'tmt fuyhmlnn as one of tbose cases, 488US., at 264, 109 S.CL, at 590-591. Tele-pbone service, the Croldberg Court said' dif-fered from movenent of the kind at issue inCenfml fuyhnnd in that" at least srgu-ably, the senriee itself is consuned whollywithin one Statq or possibly two-those inwtrich the eall is drarged to a service addressor paid by an addressee. 488 US., at 263,109 S.Cr, at 5&590. Regardless of wheth-er telephones and buses are more dike th^t'different, t.}re Grll^dfurg Court did not purportto modify Cenrml Cnwhnnd nor does thenejoriff. In any errentn the hldberg Courtsai4 the tax at issue credit€d b:gayers forshiler taxes assessed by othen States" 488U.S., tt Zil, 109 S.CL, at 590-591.

tlltimately, I may difier with the ndortWsimply beeause I assess diffenently the com-parative force of two eompeting analogies.the wrdority finds detelainative this Court'se+qe law concerai4g sales taxes applied to thesale of gpods, which eases, for erample,, per-mit one State to impoee a severance tax and

another a sales tax on the same phpical item

(say, eoal). In my vien', however. the ando-

s| to sales taxes is not as strong as the

analogr to the tan( at issue tn Centml Cflvy'

hnnn Aft€r all the ta:c before us is not a

ta.t imposed upon a prtducb that was made in

a differeut Statc orwes consumed in a differ-

ent State or is rnade up of ingredients that

come from a different Sate or has itself

moved in interstate coulmerce- Rather, it is

a tan imposed uPon int€rstate travel itself-

t}e very esseDce of intersate corrlmence.

And, it is a fairly obrviotls efiort to ta:i more

than "that portiou' of the 'tntetrstat€ astivi-

tfsl'rsvenue \ttdctt reasonably reflects the

iDstate componenL" hWberg o. &pe$ cu'

pra,, at 269 109 S.6t, at 589. I would reaf-

firm the CeilmJ fuAlwund principle' erren if

doing so requires difierent treaheut for the

inheneutly int€rstate service of interstate

transportrfion, and denies tbe possibility of

having a eingle foraal coustihilional nle for

aU eeUdescribed osales taxes.' Ihe Court of

Appeals wrote tr531 this "is a e;lassic instanee

of an unapportioned ta)c' upon int€rstate

colnmeree. In rc Jefrettun Lina'\ Ine, L5

Fsd 90, S (CA8 1994). In my view, that is

rigtt I respectfirllY disseut