High Court Rules Valdez Ship Tax Is Unconstitutional

Law360, New York (June 15, 2009, 12:00 AM EDT) -- An Alaskan city has unconstitutionally hampered free trade by taxing oil tankers that pass through its port to refuel en route to West Coast refineries, the U.S. Supreme Court ruled on Monday.

In a 7-2 decision, the high court ruled that the tax imposed on tankers passing through the city of Valdez violates the Constitution’s tonnage clause, a provision intended to foster free trade by preventing states from certain instances of taxing vessels transporting merchandise.

The clause is also intended to limit a state’s ability to...
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