The Congress shall have Power To lay and collect Taxes, Duties, Imposts and Excises, to pay the Debts and provide for the common Defense and general Welfare of the United States; but all Duties, Imposts and Excises shall be uniform throughout the United States;
To borrow Money on the credit of the United States;
To regulate Commerce with foreign Nations, and among the several States and with the Indian Tribes;
To establish an uniform Rule of Naturalization, and uniform Laws on the subject of Bankruptcies throughout the United States;
To coin Money, regulate the Value thereof, and of foreign Coin, and fix the Standard of Weights and Measures;
To provide for the Punishment of counterfeiting the Securities and current Coin of the United States;
To establish Post Offices and post Roads;
To promote the Progress of Science and useful Arts, by securing for limited Times to Authors and Inventors the exclusive Right to their respective Writings and Discoveries;
To constitute Tribunals inferior to the supreme Court;
To define and punish Piracies and Felonies committed on the high Seas, and Offenses against the Law of Nations;
To declare War, grant Letters of Marque and Reprisal, and make Rules concerning Captures on Land and Water;
To raise and support Armies, but no Appropriation of Money to that Use shall be for a longer Term than two Years;
To provide and maintain a Navy;
To make Rules for the Government and Regulation of the land and naval Forces;
To provide for calling forth the Militia to execute the Laws of the Union, suppress Insurrections and repel Invasions;
To provide for organizing, arming, and disciplining the Militia, and for governing such Part of them as may be employed in the Service of the United States, reserving to the States respectively, the Appointment of the Officers, and the Authority of training the Militia according to the discipline prescribed by Congress;
To exercise exclusive Legislation in all Cases whatsoever, over such District (not exceeding ten Miles square) as may, by Cession of particular States, and the Acceptance of Congress, become the Seat of the Government of the United States, and to exercise like Authority over all Places purchased by the Consent of the Legislature of the State in which the Same shall be, for the Erection of Forts, Magazines, Arsenals, dock-Yards, and other needful Buildings; — And
To make all Laws which shall be necessary and proper for carrying into Execution the foregoing Powers, and all other Powers vested by this Consti- tution in the Government of the United States, or in any Department or Officer thereof.
Notes to Decisions
Constitutionality.
Applying the gross receipts tax under former 72-16A-1 to 72-16A-19, 1953 Comp. (now 7-9-1 to 7-9-91 NMSA 1978) to the advertising income that the taxpayer, which was an in-state newspaper, received from the advertising that out-of-state businesses purchased via contracts that were entered in other states as part of the businesses’ national advertising efforts was not unconstitutional even though no such tax was imposed on the comparable income that television and radio broadcasters received; former 72-16A-14.10, 1953 Comp. (now 7-9-55 NMSA 1978) allows for taxing income from out-of-state advertisers to the extent that doing so is constitutional, taxing the taxpayer’s advertising income did not violate the Commerce Clause by placing an undue burden on interstate commerce because sufficient activities that related to the generation of the income occurred in New Mexico to justify taxing the income there and the taxpayer did not show that that income had been subjected to multiple taxation, and the tax did not violate the Equal Protection Clause because every newspaper was taxed uniformly and because the broadcasters reached a much broader audience that extended well beyond New Mexico’s borders. New Mexico Newspapers v. Bureau of Revenue, 1971-NMCA-022, 82 N.M. 436, 483 P.2d 317, 1971 N.M. App. LEXIS 664 (N.M. Ct. App. 1971).
Under the Commerce Clause, U.S. Const. art I § 8, it is not the purpose to relieve those engaged in interstate commerce from their just share of state tax burden even though it increases the cost of doing business. Spillers v. Commissioner of Revenue, 1970-NMCA-097, 82 N.M. 41, 475 P.2d 41, 1970 N.M. App. LEXIS 629 (N.M. Ct. App.), cert. denied, 82 N.M. 81, 475 P.2d 778, 1970 N.M. LEXIS 1486 (N.M. 1970).
Taxation of receipts or income from interstate commerce and related activities has not been declared to be violative of the Commerce Clause under U.S. Const. art I § 8. Spillers v. Commissioner of Revenue, 1970-NMCA-097, 82 N.M. 41, 475 P.2d 41, 1970 N.M. App. LEXIS 629 (N.M. Ct. App.), cert. denied, 82 N.M. 81, 475 P.2d 778, 1970 N.M. LEXIS 1486 (N.M. 1970).
Generally.
Former 67-7-13M, 1953 Comp., a law prohibiting certain types of price advertising for the practice of optometry, did not impose a prohibited burden upon interstate commerce when it was applied to prevent the publication of certain ads in New Mexico, because it fell within the state’s police power in that it was directly related to protection of public health, it was applicable to all persons, and it did not impinge on an area of interstate commerce that required uniformity of regulation. Head v. New Mexico Bd. of Examiners in Optometry, 374 U.S. 424, 83 S. Ct. 1759, 10 L. Ed. 2d 983, 1963 U.S. LEXIS 977 (U.S. 1963).
Tax imposed pursuant to the New Mexico Emergency Tax Act on a mining company that operated a gold mine within the State, with all of the gold being sold pursuant to federal law to the United States mint in Colorado, was constitutional. Black Hawk Consol. Mines Co. v. Gallegos, 1948-NMSC-007, 52 N.M. 74, 191 P.2d 996, 1948 N.M. LEXIS 623 (N.M. 1948).
Applicability.
Commissions earned by an in-state mover when he successfully negotiated interstate moving contracts for an interstate mover were taxable as gross business receipts because the commissions did not result from an act or acts of actual transportation; the tax did not violate the Commerce Clause. Spillers v. Commissioner of Revenue, 1970-NMCA-097, 82 N.M. 41, 475 P.2d 41, 1970 N.M. App. LEXIS 629 (N.M. Ct. App.), cert. denied, 82 N.M. 81, 475 P.2d 778, 1970 N.M. LEXIS 1486 (N.M. 1970).
The powers granted to Congress by U.S. Const. art I § 8 to regulate commerce with Indian tribes include only the wild tribes which subsisted at that time of its enactment within the territorial jurisdiction of the United States, and immediately adjacent to their borders; it cannot be said that the framers of that instrument contemplated any other than the tribes of wild Indians because there were none of any other kind known to them. United States v. Santistevan, 1874-NMSC-003, 1 N.M. 583, 1874 N.M. LEXIS 3 (N.M. 1874).
Assessment.
1934 N.M. Laws (Spec. Sess.) ch. 7, § 201, which levied a privilege tax on publishers based on advertising revenue, does not violate the commerce clause even though some of the magazines are distributed out of state. Western Live Stock v. Bureau of Revenue, 303 U.S. 250, 58 S. Ct. 546, 82 L. Ed. 823, 1938 U.S. LEXIS 388 (U.S. 1938).
Privilege tax on publishers, levied by 1934 N.M. Laws (Spec. Sess.) ch. 7, § 201, measured by advertising revenue, is not forbidden by the commerce clause either because the advertising contract, apart from its performance, is within the protection of the commerce clause, or because as an incident preliminary to printing and publishing the advertisements the advertisers sent cuts, copy, and the like to the publisher. Western Live Stock v. Bureau of Revenue, 303 U.S. 250, 58 S. Ct. 546, 82 L. Ed. 823, 1938 U.S. LEXIS 388 (U.S. 1938).
Taxation of a local business or occupation, which is separate and distinct from the transportation and intercourse which is interstate commerce, is not forbidden merely because in the ordinary course such transportation or intercourse is induced or occasioned by the business. Western Live Stock v. Bureau of Revenue, 303 U.S. 250, 58 S. Ct. 546, 82 L. Ed. 823, 1938 U.S. LEXIS 388 (U.S. 1938).
Bankruptcy.
Enactment of the federal bankruptcy act of 1898 pursuant to the Congressional power under U.S. Const. art. 1, § 8 to establish uniform laws on the subject of bankruptcies throughout the United States, did not preclude the creditor from filing an action under the insolvency laws in N.M. Comp. Laws §§ 2818 — 2816, which were designed to prevent debtors that were contemplating insolvency from preferring a creditor(s) over other creditors, in which the creditor sought to avoid the debtor’s transfer of his assets to other creditors and that also requested the appointment of a receiver to manage the debtor’s assets; the New Mexico legislature’s inability to establish bankruptcy laws that were binding on the other states did not preclude the legislature from passing laws that related to insolvency proceedings within the state, common elements existed between bankruptcy and insolvency laws, and the bankruptcy act had no applicability because it did not have any retroactive effect and the debtor’s acts on which the current action were based occurred prior to the enactment of the bankruptcy act. Grunsfeld Bros. v. Brownell, 1904-NMSC-014, 12 N.M. 192, 76 P. 310, 1904 N.M. LEXIS 14 (N.M. 1904).
Commerce clause.
Uniform Division of Income for Tax Purposes Act, 7-4-1 to 7-4-21 NMSA 1978, does not violate the Foreign Commerce Clause of the U.S. Constitution. NCR Corp. v. Taxation & Revenue Dep't, 1993-NMCA-060, 115 N.M. 612, 856 P.2d 982, 1993 N.M. App. LEXIS 54 (N.M. Ct. App. 1993), cert. denied, 115 N.M. 677, 857 P.2d 788, 1993 N.M. LEXIS 194 (N.M. 1993), cert. denied, 512 U.S. 1245, 114 S. Ct. 2763, 129 L. Ed. 2d 877, 1994 U.S. LEXIS 5052 (U.S. 1994).
Compensating tax.
Question of title and delivery of coal in New Mexico was a positive factor upon which to determine that the compensating tax for the operation of draglines in a taxpayer’s mining business, which was imposed pursuant to 7-9-4 NMSA 1978, did not interfere with the Commerce Clause, U.S. Const. art. 1, § 8 (3). Pittsburgh & Midway Coal Mining Co. v. Revenue Div., Taxation & Revenue Dep't, 1983-NMCA-019, 99 N.M. 545, 660 P.2d 1027, 1983 N.M. App. LEXIS 690 (N.M. Ct. App. 1983).
Construction.
State tax survives a Commerce Clause challenge when the tax: (1) is applied to an activity with a substantial nexus with the taxing state, (2) is fairly apportioned, (3) does not discriminate against interstate commerce, and (4) is fairly related to the services provided by the state. Conoco, Inc. v. State Taxation & Revenue Dep't, 1997-NMCA-004, 122 N.M. 745, 931 P.2d 739, 1995 N.M. App. LEXIS 170 (N.M. Ct. App. 1995).
Where former 54-6-41, 1953 Comp. (now 26-1-16 NMSA 1978) regulated evenhandedly to effectuate a legitimate local public interest, and its effects on interstate commerce were only incidental, it was not an unconstitutional burden imposed on commerce, and was not clearly excessive in relation to the putative local benefits; the state has a legitimate local purpose in regulating the sale and distribution of dangerous drugs. Pharmaceutical Mfrs. Ass'n v. New Mexico Bd. of Pharmacy, 1974-NMCA-038, 86 N.M. 571, 525 P.2d 931, 1974 N.M. App. LEXIS 696 (N.M. Ct. App.), writ quashed, 86 N.M. 657, 526 P.2d 799, 1974 N.M. LEXIS 1449 (N.M. 1974).
Carrying on of a local business may be made the condition of state taxation, if it is distinct from interstate commerce, and the business of preparing, printing, and publishing magazine advertising is peculiarly local and distinct from its circulation whether or not that circulation be interstate commerce. Western Live Stock v. Bureau of Revenue, 303 U.S. 250, 58 S. Ct. 546, 82 L. Ed. 823, 1938 U.S. LEXIS 388 (U.S. 1938).
1919 N.M. Laws ch. 93, p. 182, which assess an excise tax on gasoline sold or used, can be applied to gasoline sold by an oil company in its business without violating U.S. Const. amend XIV or the commerce clause because of the divisible nature of the tax according to whether the sales or use is in domestic as opposed to interstate commerce. Bowman v. Continental Oil Co., 256 U.S. 642, 41 S. Ct. 606, 65 L. Ed. 1139, 1921 U.S. LEXIS 1548 (U.S. 1921).
Construction with other law.
Congress has the power under the Commerce Clause of U.S. Const. art I § 8 to enforce the substantive requirements of the Fair Labor Standards Act of 1938, 29 U.S.C.S. §§ 201-219, against the states. Cockrell v. Bd. of Regents, 2002-NMSC-009, 132 N.M. 156, 45 P.3d 876, 2002 N.M. LEXIS 158 (N.M. 2002).
Commerce Clause, U.S. Const. art I § 8, cl. 3, did not prevent the State of New Mexico from applying the New Mexico Antitrust Act, 57-1-1 to 57-1-3 NMSA 1978 to a uranium supplier’s participation in a uranium cartel, and information relevant to violations of the act was discoverable pursuant to Rule 1-026(B) NMRA. United Nuclear Corp. v. General Atomic Co., 1980-NMSC-094, 96 N.M. 155, 629 P.2d 231, 1980 N.M. LEXIS 2727 (N.M. 1980), cert. denied, 451 U.S. 901, 101 S. Ct. 1966, 68 L. Ed. 2d 289, 1981 U.S. LEXIS 1637 (U.S. 1981).
Taxation of an outdoor billboard advertising service pursuant to former 72-16A-4, 1953 Comp. (now 7-9-4 NMSA 1978) did not violate U.S. Const. art I § 8, cl. 3, the commerce clause, because the posting of a national message on a local billboard was an event taxable by the state and was not an undue burden on interstate commerce. Markham Advertising Co. v. Bureau of Revenue, 1975-NMCA-071, 88 N.M. 176, 538 P.2d 1198, 1975 N.M. App. LEXIS 689 (N.M. Ct. App.), cert. denied, 88 N.M. 318, 540 P.2d 248, 1975 N.M. LEXIS 901 (N.M. 1975).
Contracts.
Mere formation of a contract between persons in different states is not within the protection of the commerce clause, unless the performance is within its protection, at least in the absence of Congressional action. Western Live Stock v. Bureau of Revenue, 303 U.S. 250, 58 S. Ct. 546, 82 L. Ed. 823, 1938 U.S. LEXIS 388 (U.S. 1938).
Elections.
Trial court erred in ordering a county clerk to register as voters residents of a federal military base that had been purchased by the federal government pursuant to U.S. Const. art I § 8, cl. 17, because the area was under exclusive federal jurisdiction, and the laws of former New Mexico, 3-1-1, 1953 Comp. (now 1-1-1 NMSA 1978), would not permit voter registration under the circumstances without a federal statute receding jurisdiction of the area to New Mexico. Langdon v. Jaramillo, 1969-NMSC-060, 80 N.M. 255, 454 P.2d 269, 1969 N.M. LEXIS 1621 (N.M. 1969).
Governmental powers.
Subcontractor could not enjoin the New Mexico environment department from enforcing the New Mexico Occupational Health and Safety Act (NMOHSA), 50-9-1 NMSA 1978 to 50-9-25 NMSA 1978, because there was no exclusive federal jurisdiction over the land upon which a violation occurred, as provided for in 50-9-23A NMSA 1978; the federal government did not acquire the land under the Enclave Clause, U.S. Const. art I § 8, cl. 17. Inca Constr. Co. v. Rogers, 1997-NMCA-056, 123 N.M. 514, 943 P.2d 548, 1997 N.M. App. LEXIS 50 (N.M. Ct. App. 1997).
New Mexico’s apportionment statute, the Uniform Division of Income for Tax Purposes Act, 7-4-1 NMSA 1978, and the challenged business income assessments on a domestic corporation’s foreign source income, met the established test of fairness and did not violate the Due Process and Commerce Clauses of the United States Constitution or the Due Process Clause of the New Mexico Constitution. NCR Corp. v. Taxation & Revenue Dep't, 1993-NMCA-060, 115 N.M. 612, 856 P.2d 982, 1993 N.M. App. LEXIS 54 (N.M. Ct. App. 1993), cert. denied, 115 N.M. 677, 857 P.2d 788, 1993 N.M. LEXIS 194 (N.M. 1993), cert. denied, 512 U.S. 1245, 114 S. Ct. 2763, 129 L. Ed. 2d 877, 1994 U.S. LEXIS 5052 (U.S. 1994).
Former 7-13-4.1 NMSA 1978 which limited an excise tax deduction to ethanol-blended fuel manufactured exclusively in New Mexico, constituted an impermissible burden on interstate commerce in violation of U.S. Const. art I § 8, and, under a three-part test, the statute could not be saved by severance. Giant Indus. Ariz. v. Taxation & Revenue Dep't, 1990-NMCA-074, 110 N.M. 442, 796 P.2d 1138, 1990 N.M. App. LEXIS 57 (N.M. Ct. App. 1990).
Allegations that the Multistate Tax Commission, established by the Multistate Tax Compact, former 72-15A-37, 1953 Comp. (now 7-5-1 NMSA 1978), had abused its powers by conducting a campaign of harassment against members of plaintiff class of taxpayers failed to establish that the compact was in violation of the Commerce Clause, U.S. Const. art I § 8. United States Steel Corp. v. Multistate Tax Comm'n, 434 U.S. 452, 98 S. Ct. 799, 54 L. Ed. 2d 682, 1978 U.S. LEXIS 58 (U.S. 1978).
U.S. Const. art I § 8 delegates to Congress the authority to regulate interstate commerce, newspapers and radio stations are instrumentalities of interstate commerce and the state is not wholly precluded from exercising its police power as it extends to the right of the state to regulate trade and callings concerning public health. New Mexico Bd. of Examiners in Optometry v. Roberts, 1962-NMSC-053, 70 N.M. 90, 370 P.2d 811, 1962 N.M. LEXIS 1548 (N.M. 1962), aff'd, 374 U.S. 424, 83 S. Ct. 1759, 10 L. Ed. 2d 983, 1963 U.S. LEXIS 977 (U.S. 1963).
Gross receipts tax.
Considering all the factors of activities of a taxpayer, including the sale of the coal, the passage of the title, the matter of agency and other factors incidental to the taxpayer’s activities, it was adjudicated that the imposition of gross receipts taxes against the taxpayer pursuant to 7-9-4 NMSA 1978 did not impermissibly interfere with the U.S. Const. art I § 8(3); the decision of the Department of Taxation and Revenue was neither capricious nor arbitrary and it was made in accordance with the facts and the law applicable to the case. Pittsburgh & Midway Coal Mining Co. v. Revenue Div., Taxation & Revenue Dep't, 1983-NMCA-019, 99 N.M. 545, 660 P.2d 1027, 1983 N.M. App. LEXIS 690 (N.M. Ct. App. 1983).
Where the Commissioner of Revenue assessed a gross receipts tax against a taxpayer for sales made to out-of-state purchasers and for intrastate sales from whom the taxpayer did not obtain nontaxable transaction certificates pursuant to former 72-16A-14.2, 1953 Comp., there was no violation of the interstate commerce clause of U.S. Const. art I § 8 because the Commissioner’s auditor permitted a deduction, pursuant to former 72-16A-14.10, 1953 Comp., on interstate commerce, for all sales for which the taxpayer had evidence for delivery out of state. Al Zuni Traders v. Bureau of Revenue, 1977-NMCA-025, 90 N.M. 258, 561 P.2d 1351, 1977 N.M. App. LEXIS 585 (N.M. Ct. App. 1977).
Intent.
History of gasoline tax legislation in New Mexico did not warrant the contention that Laws 1931, c. 31, which provided for refunds to purchasers of gasoline for use otherwise than in motor vehicles operated on highways, was a legislative construction of former 1929 Code, § 60-203 that evidenced legislative intent to exempt gasoline sold for aircraft use. Transcon. & W. Air, Inc. v. Lujan, 1932-NMSC-064, 36 N.M. 64, 8 P.2d 103, 1932 N.M. LEXIS 9 (N.M. 1932).
Interstate commerce.
State’s taxation of dividends from foreign subsidiaries under the separate corporate entity method violated the foreign commerce clause of the U.S. Const. art I § 8, because domestic subsidiaries were excluded entirely from the parent’s tax base. Conoco, Inc. v. Taxation & Revenue Dep't, 1997-NMSC-005, 122 N.M. 736, 931 P.2d 730, 1996 N.M. LEXIS 476 (N.M. 1996), cert. denied, 521 U.S. 1112, 117 S. Ct. 2497, 138 L. Ed. 2d 1003, 1997 U.S. LEXIS 3995 (U.S. 1997).
Advertising contracts between magazine publishers in New Mexico and advertisers in other states were not transactions in interstate commerce and, therefore, a tax on revenue from such contracts was not an unconstitutional burden on interstate commerce. Western Live Stock v. Bureau of Revenue, 1937-NMSC-010, 41 N.M. 141, 65 P.2d 863, 1937 N.M. LEXIS 9 (N.M. 1937).
A use-tax imposed on gasoline used in New Mexico, including that purchased out-of-state, amounted to regulation of interstate commerce in violation of U.S. Const. art I § 8. Transcon. & W. Air, Inc. v. Lujan, 1931-NMSC-064, 36 N.M. 64, 8 P.2d 103, 1931 N.M. LEXIS 72 (N.M. 1931).
Intrastate commerce.
Broadcasting company’s tax liability was improperly calculated based on gross receipts in violation of the Commerce Clause because the state of New Mexico was only able to levy a tax upon the portion of income that reflected the intrastate taxable event; the Emergency School Tax was to be levied and collected by the bureau of revenue and was measured by the amount or volume of business done by persons, on account of their business activities, engaging or continuing, within the state of New Mexico, in any business herein defined, at an amount equal to two percent of the gross receipts of the business of every person engaging or continuing in the business of conducting radio broadcasting stations. Albuquerque Broad. Co. v. Bureau of Revenue, 1947-NMSC-045, 51 N.M. 332, 184 P.2d 416, 1947 N.M. LEXIS 753 (N.M. 1947).
Jurisdiction.
U.S. Const. art I § 8, cl. 17 conferred exclusive federal jurisdiction over government-acquired property, and a wife residing on an installation owned by the federal government was not a state resident within the meaning of 40-4-5 NMSA 1978 for purposes of bringing an action in divorce; the trial court properly dismissed her suit for lack of jurisdiction. Chaney v. Chaney, 1949-NMSC-005, 53 N.M. 66, 201 P.2d 782, 1949 N.M. LEXIS 662 (N.M. 1949).
Purpose.
It is not the purpose of the commerce clause to relieve those engaged in interstate commerce from their just share of state tax burden even though it increases the cost of doing the business. Western Live Stock v. Bureau of Revenue, 303 U.S. 250, 58 S. Ct. 546, 82 L. Ed. 823, 1938 U.S. LEXIS 388 (U.S. 1938).
Registration.
Trial court erred in ordering a county clerk to register as voters the residents of a federal military base that had been purchased by the federal government pursuant to U.S. Const. art I § 8, cl. 17, because the area was under exclusive federal jurisdiction, and the laws of New Mexico, former 3-1-1, 1953 Comp. (now 1-1-1 NMSA 1978), would not permit voter registration under the circumstances without a federal statute receding jurisdiction of the area to New Mexico. Langdon v. Jaramillo, 1969-NMSC-060, 80 N.M. 255, 454 P.2d 269, 1969 N.M. LEXIS 1621 (N.M. 1969).
Residence.
Former 25-704, 1941 Comp., which set forth residency requirements for filing for divorce, was not unconstitutional because it was not special legislation and applied to all within the state similarly situated; it operated uniformly through the state, did not interfere with federal jurisdiction over military bases, and was neither arbitrary nor capricious. Crownover v. Crownover, 1954-NMSC-092, 58 N.M. 597, 274 P.2d 127, 1954 N.M. LEXIS 1170 (N.M. 1954).
Husband, who was a naval officer, met the residency requirement of former 25-704,1941 Comp., for filing for divorce from his wife, which was not violative of U.S. Const. art I § 8 because he had been “continuously stationed” at a military base in New Mexico for one year next preceding the filing of his complaint; the husband had 13 months of permanent station in New Mexico with physical presence during the first seven months, physical absence during the next six months, and then a physical return to New Mexico, his permanent station. Crownover v. Crownover, 1954-NMSC-092, 58 N.M. 597, 274 P.2d 127, 1954 N.M. LEXIS 1170 (N.M. 1954).
Retroactivity.
Although retroactive price affirmation requirements for brand owners of alcoholic beverages were declared unconstitutional by the United States Supreme Court in 1989 as violative of the Commerce Clause, the decision did not have a retroactive effect. Thus, a judgment against a brewery that awarded the Director of the New Mexico Department of Alcoholic Beverage County damages was upheld, even where the brewery’s liability arose from its violation of the monthly price affirmation requirements of 60-12-6 NMSA 1978 from 1979 through 1985, based on the law of the case doctrine and the potentially harmful results to the State if the brewery was singled out for preferential treatment. Stroh Brewery Co. v. Director of New Mexico Dep't of Alcoholic Beverage Control, 1991-NMSC-072, 112 N.M. 468, 816 P.2d 1090, 1991 N.M. LEXIS 306 (N.M. 1991), cert. denied, 502 U.S. 1093, 112 S. Ct. 1166, 117 L. Ed. 2d 413, 1992 U.S. LEXIS 939 (U.S. 1992).
State law authority.
Under U.S. Const. art I § 8, cl. 17, the federal government had the power to exercise exclusive jurisdiction over an air force base, but this exclusive jurisdiction provision is not an absolute prohibition against the application of state laws. Because the federal government has failed to exercise jurisdiction in areas, such as children’s welfare, the State could exercise its jurisdiction and apply the provisions of its child welfare law in order to protect the allegedly abused children residing on the air force base. State ex rel. Children, Youth & Families Dep't v. Debbie F. (In re Charles F.), 1995-NMCA-113, 120 N.M. 665, 905 P.2d 205, 1995 N.M. App. LEXIS 114 (N.M. Ct. App. 1995).
Contractors, in purchasing and bringing building material into a state and in appropriating it to their own contract with the United States government, are not agents or instrumentalities of the United States Government and are not relieved of a state use tax, to which they would otherwise be subject, by reason of the fact that they are United States government contractors. Robert E. McKee, Gen. Contractor, Inc. v. Bureau of Revenue, 1957-NMSC-082, 63 N.M. 185, 315 P.2d 832, 1957 N.M. LEXIS 956 (N.M. 1957).
Taxes.
Physical presence test of Quill Corp. v. North Dakota, 504 U.S. 298, is intended to apply to sales and use taxes only; it was not intended to apply to other taxes such as a state income tax. Kmart Props., Inc. v. Taxation & Revenue Dep't, 2006-NMCA-026, 139 N.M. 177, 131 P.3d 27, 2001 N.M. App. LEXIS 133 (N.M. Ct. App. 2001), cert. quashed, 2006-NMSC-006, 139 N.M. 172, 131 P.3d 22, 2005 N.M. LEXIS 603 (N.M. 2005).
Multiple taxation of multinational, worldwide, unitary enterprises can where apportioned properly meet the restrictions of Japan Line Ltd. v. County of Los Angeles, 441 U.S. 434 (1979). NCR Corp. v. Taxation & Revenue Dep't, 1993-NMCA-060, 115 N.M. 612, 856 P.2d 982, 1993 N.M. App. LEXIS 54 (N.M. Ct. App. 1993), cert. denied, 115 N.M. 677, 857 P.2d 788, 1993 N.M. LEXIS 194 (N.M. 1993), cert. denied, 512 U.S. 1245, 114 S. Ct. 2763, 129 L. Ed. 2d 877, 1994 U.S. LEXIS 5052 (U.S. 1994).
Mobil Oil Corp. v. Commissioner of Taxes, 445 U.S. 425 (1980), recognizes that each State can impose lawfully a fairly apportioned income tax on value earned by taxpayers outside the State’s borders. NCR Corp. v. Taxation & Revenue Dep't, 1993-NMCA-060, 115 N.M. 612, 856 P.2d 982, 1993 N.M. App. LEXIS 54 (N.M. Ct. App. 1993), cert. denied, 115 N.M. 677, 857 P.2d 788, 1993 N.M. LEXIS 194 (N.M. 1993), cert. denied, 512 U.S. 1245, 114 S. Ct. 2763, 129 L. Ed. 2d 877, 1994 U.S. LEXIS 5052 (U.S. 1994).
Where New Mexico taxed only an apportioned share of the income of the corporate taxpayer that was a domestic corporation, and the tax was not imposed on tangible property of foreign corporations, even though the tax fell on an apportioned share of the taxpayer’s income that it received as royalties, interest, and dividends from its unitary, foreign subsidiaries, the tax was not a tax on any of the taxpayer’s foreign subsidiaries, and the apportionment of the tax in part on the taxpayer’s sources of foreign income was not a bar to state taxation. NCR Corp. v. Taxation & Revenue Dep't, 1993-NMCA-060, 115 N.M. 612, 856 P.2d 982, 1993 N.M. App. LEXIS 54 (N.M. Ct. App. 1993), cert. denied, 115 N.M. 677, 857 P.2d 788, 1993 N.M. LEXIS 194 (N.M. 1993), cert. denied, 512 U.S. 1245, 114 S. Ct. 2763, 129 L. Ed. 2d 877, 1994 U.S. LEXIS 5052 (U.S. 1994).
Where a taxing authority seeks to tax foreign commerce, it must satisfy the four-part test of Complete Auto Transit Inc. v. Brady, 430 U.S. 274 (1977), to determine the validity of state or local taxation of interstate commerce, and, in addition, it must satisfy two additional tests that gauge, first, whether or not the tax notwithstanding apportionment creates a substantial risk of international multiple taxation and, second, whether or not the tax prevents the federal government from speaking with one voice in regulating commercial relations with foreign governments; where a state tax contravenes either of those tests, it is unconstitutional under the Commerce Clause. NCR Corp. v. Taxation & Revenue Dep't, 1993-NMCA-060, 115 N.M. 612, 856 P.2d 982, 1993 N.M. App. LEXIS 54 (N.M. Ct. App. 1993), cert. denied, 115 N.M. 677, 857 P.2d 788, 1993 N.M. LEXIS 194 (N.M. 1993), cert. denied, 512 U.S. 1245, 114 S. Ct. 2763, 129 L. Ed. 2d 877, 1994 U.S. LEXIS 5052 (U.S. 1994).
1929 Code, § 60-101, which imposed a tax on gasoline purchases by an interstate airline violated the Commerce Clause, U.S. Const. art I § 8, because it was collected from the user; by contrast, 1929 Code, § 60-203, which imposed tax on the same gasoline but was passed on by the dealer and included in the price paid by the airline, did not violate the Commerce Clause because it affected interstate commerce only incidentally. Transcon. & W. Air, Inc. v. Lujan, 1931-NMSC-064, 36 N.M. 64, 8 P.2d 103, 1931 N.M. LEXIS 72 (N.M. 1931).
Tax criterion.
Where a taxpayer’s business, a coal mining operation, occurred entirely within one county in New Mexico (criterion 1); the tax imposed pursuant to 7-9-4 NMSA 1978 was applied equally to interstate and intrastate commerce (criterion 2); the tax was limited to a base that related only to the taxpayer’s activities within the county, and did not discriminate against interstate commerce in violation of U.S. Const. art I § 8 (3) because its application was to activities conducted, and revenues realized by the taxpayer wholly within New Mexico (criterion 3); and the tax was intimately related to “services” provided by the state such as the availability of the coal itself, as well as the labor force, roads, environment and protection afforded to Taxpayer by the State (criterion 4); the New Mexico Gross Receipts Tax Act, in its application to the taxpayer met every test of validity prescribed by the federal constitution and courts. Pittsburgh & Midway Coal Mining Co. v. Revenue Div., Taxation & Revenue Dep't, 1983-NMCA-019, 99 N.M. 545, 660 P.2d 1027, 1983 N.M. App. LEXIS 690 (N.M. Ct. App. 1983).
Tax equity.
Gross receipts tax assessed against an out-of-state food company pursuant to the Gross Receipts and Compensating Tax Act, 7-9-4 to 7-9-82 NMSA 1978, did not violate the Commerce Clause, U.S. Const. art I § 8. The tax applied equally to in-state and out-of-state sellers, as it charged a uniform rate for any sale of property in New Mexico regardless of the location of the seller, 7-9-3F NMSA 1978, and it provided a credit for similar taxes paid to other states, 7-9-9 NMSA 1978. Proficient Food Co. v. New Mexico Taxation & Revenue Dep't, 1988-NMCA-042, 107 N.M. 392, 758 P.2d 806, 1988 N.M. App. LEXIS 35 (N.M. Ct. App. 1988).
Taxable income.
Under standards of review provided by 7-1-25 NMSA 1978 in an appeal involving the application of the Commerce Clause, U.S. Const. art I § 8, under the factors provided by 7-4-11, 7-4-14 and 7-4-16 NMSA 1978, provisions of the Uniform Division of Income for Tax Purposes Act, 7-4-1 NMSA 1978 which were used to arrive at a fraction or multiplier as stated in 7-4-10 NMSA 1978, a denial of a refund to a taxpayer was proper because where dividends from the subsidiaries of a parent company reflected profits derived from an integrated enterprise, those dividends, including foreign subsidiary dividends, were earned income. Conoco, Inc. v. State Taxation & Revenue Dep't, 1997-NMCA-004, 122 N.M. 745, 931 P.2d 739, 1995 N.M. App. LEXIS 170 (N.M. Ct. App. 1995).
Taxation of outdoor billboard advertising services rendered in state by the taxpayer was not a violation of the U.S. Const. art I § 8, clause 3, the commerce clause; no interstate activity was being taxed as the billboards did not move, and because no multiple taxation was possible where the taxable event, displaying the billboards, was not in interstate commerce. Markham Advertising Co. v. Bureau of Revenue, 1975-NMCA-071, 88 N.M. 176, 538 P.2d 1198, 1975 N.M. App. LEXIS 689 (N.M. Ct. App.), cert. denied, 88 N.M. 318, 540 P.2d 248, 1975 N.M. LEXIS 901 (N.M. 1975).
Imposition upon an itinerant salesman of an occupation tax levied by a municipal ordinance did not violate the federal commerce clause, U.S. Const. art I § 8, cl. 3. Farmington v. Miller, 1958-NMSC-088, 64 N.M. 330, 328 P.2d 589, 1958 N.M. LEXIS 1341 (N.M. 1958).
New Mexico income tax, when applied to a Texas common carrier’s business, which was entirely interstate, did not violate the Commerce Clause, U.S. Const. art I § 8, cl. 3, because it was not a direct burden upon the transportation of oil. Humble Pipe Line Co. v. State, 1940-NMSC-082, 45 N.M. 29, 109 P.2d 247, 1940 N.M. LEXIS 83 (N.M. 1940).
OPINIONS OF ATTORNEY GENERAL
Constitutionality.
Any county or municipal ordinance that banned waste from outside their boundaries, thereby in effect prohibiting a private landfill operator from taking out-of-state waste, would probably be held unconstitutional if challenged in court. 1983-1986 N.M. Op. Att'y Gen. No. 635.
Research References and Practice Aids
New Mexico Law Review.
Article: Public Health Protection and the Commerce Clause: Controlling Tobacco in the Internet Age, Wendy E. Parmet and Christopher Banthin, 35 N.M. L. Rev. 81 (2005).