Friday, March 13, 2020
Michael S. Knoll (Pennsylvania) & Ruth Mason (Virginia), The Dormant Foreign Commerce Clause After Wynne, 41 Va. Tax Rev. ___ (2020):
This Article surveys dormant foreign Commerce Clause doctrine to determine what limits it places on state taxation of international income, both income earned by foreigners in a U.S. state, and income earned by U.S. residents abroad. Among our conclusions is that, just as the dormant interstate Commerce Clause forbids states from discriminating against interstate commerce, the dormant foreign Commerce Clause forbids states from discriminating against international commerce. We also consider differences between the interstate and foreign commerce contexts, including differences in the nationality of affected taxpayers and differences in the impact of state taxes on federal international tax policy goals.
Assuming we are correct that the dormant foreign Commerce Clause places similar limits on states to the dormant interstate Commerce Clause, we provide states guidance as to how to conform their regimes for taxing international income to constitutional requirements.