Citations 430 U.S. 274 (more) | End date 1977 | |
Full case name Complete Auto Transit, Inc. v. Brady, Chairman, Mississippi Tax Commission Prior history Certiorari from the Supreme Court of Mississippi Majority Blackmun, joined by unanimous Similar Quill Corp v North Dakota, Cooley v Board of Wardens, International Shoe Co v Washington, Burger King Corp v Rudze, Gibbons v Ogden |
Complete Auto Transit, Inc. v. Brady, 430 U.S. 274 (1977), is a United States Supreme Court case regarding the Commerce Clause and sales tax.
Contents
Background
Complete Auto was an auto transporter involved in moving General Motors vehicles from the railhead at Jackson, Mississippi to dealerships in Mississippi.
The Mississippi State Tax Commission levied a tax upon Complete Auto "for the privilege of engaging or continuing in business or doing business" in the state of Mississippi. The Court refers to the tax as a "sales tax"; however, it was a "transaction privilege" or gross receipts tax based on Complete Auto's gross receipts.
Arguments
Complete Auto argued against the constitutionality of tax, stating that they were part of an interstate operation, involved in transporting vehicles from the factories in Michigan to the dealers in Mississippi. According to Complete Auto, taxation on interstate operations not only discourages interstate commerce but also is a violation of the Commerce Clause.
Ruling
The Supreme Court ruled in favor of Mississippi. The ruling issued that Complete Auto established a "four-prong" test for constitutionality of a tax under the Commerce Clause:
Even though Complete Auto asserted that it was a part of an interstate operation, the Court agreed with Mississippi that while operating within the state, it was afforded services, such as police protection, provided for by taxation.
Subsequent developments
The test enunciated in Complete Auto Transit received significant interpretation in Commonwealth Edison Co. v. Montana, 453 U.S. 609 (1981).