Justice Alito, State Tax Hero?

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[Commentary]  I had been waiting with bated breath for the Supreme Court’s decision in Murphy v. NCAA. On May 14, not only did the Supreme Court strike down the federal law at issue, which had stopped states, counties, and cities from legalizing sports gambling within their borders, but it also appears to have invalidated a broad swath of congressional limitations on state tax authority. (Oh, and it also saved sanctuary cities.) What I, for one, didn’t expect is that it would have such significant implications for state tax law as well. Why might it? Well, a whole host of federal statutes limit the tax authority of states and their subdivisions. To borrow from Justice Samuel Alito, they violate “[t]he basic principle … that Congress cannot issue direct orders to state legislatures,” and these provisions cannot “be understood as a regulation of private actors.” To illustrate: “No State … may impose any … [t]axes on Internet access ….” 47 U.S.C. § 151 note. (There goes the Internet Tax Freedom Act...)

[Daniel Hemel is an Assistant Professor at UChicago Law]


Justice Alito, State Tax Hero?