Duties and Inspection Laws – Constitution Article 1 §10.2

On Wednesdays we study the Constitution. Last week I started Article 1, Section 10, which limits the powers of the states. Article 1 §10.1 was kind of a laundry list in parallel with the powers and limitations of Congress. This week I’m looking at Constitution Article 1 §10.2, which deals with import/export taxes, and, I’m sorry to say, is almost as boring as it sounds. But there’s alcohol at the end if you make it that far.

Constitution Article 1 §10.2

No State shall, without the Consent of the Congress, lay any Imposts or Duties on Imports or Exports, except what may be absolutely necessary for executing it’s inspection Laws: and the net Produce of all Duties and Imposts, laid by any State on Imports or Exports, shall be for the Use of the Treasury of the United States; and all such Laws shall be subject to the Revision and Controul of the Congress.

As you may well have noticed by now, spelling was not so formalized in the late 1700s as it came to be in the 20^th century. So I will forgive the extraneous apostrophe in “it’s” but I still must point it out because I’m so sick of seeing apostrophes where they don’t belong. “It’s” means “it is.” “Its” is a possessive. Moving on.

Imports and Exports

As you may well have noticed by now, the Framers were anxious to draw distinction between states and foreign governments. Back then the idea of “United States” as a permanent entity rather than as a convenient coalition wasn’t an obvious winner. So there are lots of places in the Constitution where they try to establish that States within the Union won’t treat each other as foreign governments. The first part of this clause is basically reinforcing the idea (poorly expressed) in Section 9 that “export” refers specifically to international, rather than interstate trade. By now, we are all pretty clear that Congress is in charge of both international affairs and interstate trade. I’m going to skip over Brown v. Maryland and other case law that deals with the “original package doctrine” and other questions related to jurisdiction over international/interstate commerce. But there are still several

Privilege Taxes

“Privilege tax” sounds like a social justice thing, but the Annotated Constitution tells me that it relates to a Brown v. Maryland (shoot, maybe I should have studied that case more) finding: state laws requiring a license to sell imported goods amounts to an indirect tax on imports. Hence it is unconstitutional. By the same token, there is a list of cases finding franchise taxes on foreign corporations, sales taxes on imported merchandise in original packaging; and licensing fees for foreign commerce invalid (Annotated Constitution p. 444 if you’re interested).

Property Taxes

The clause doesn’t mention property taxes. Maybe that’s why the Court overruled decisions (based on Brown v. Maryland). Now a state can levy a nondiscriminatory property tax on goods that are no longer in import transit. Probably not important to most of us.

Inspection Laws

So about the exception in the clause:

except what may be absolutely necessary for executing it’s inspection Laws

What does that mean? The Framers assumed the existence of laws allowing the state to inspect imported articles. In Turner v. Maryland (1883) the Court recognized “quality of the article, form, capacity, dimensions, and weight of package, mode of putting up, and marking and branding of various kinds” as acceptable elements for inspection. Most of us probably don’t care about that, but we do care that the 1888 case of Bowman v. Chicago & Nw. Railway ensured that a state law forbidding the importation of intoxicating liquors into the state could not be sustained as an inspection law.

via GIPHY