Polar Tankers v. City of Valdez
Encyclopedia
Polar Tankers, Inc. v. City of Valdez was a case decided by the Supreme Court of the United States
in 2009, involving the tonnage clause of the United States Constitution
.
The City of Valdez
in Alaska
imposed a property tax
that, in practice, applied only to large oil tankers. Polar Tankers, a ConocoPhillips
subsidiary, sued, arguing that the tax violated the Tonnage Clause of the Constitution, which forbids a state
, "without the Consent of Congress
, [to] lay any Duty of Tonnage."
The Supreme Court agreed with Polar Tankers. The court noted that the original meaning
of the clause was as a term of art for a tax imposed that varies with "the internal cubic capacity of a vessel
," but emphasized that a consistent line of cases had read the clause broadly, "forbidding a State to do that indirectly which she is forbidden ... to do directly." Those cases, the court concluded, stood for the proposition that the tonnage clause's prohibition reaches any taxes or duties on a ship, "whether a fixed sum upon its whole tonnage
, or a sum to be ascertained by comparing the amount of tonnage with the rate of duty[,] ... regardless of [the tax or duty's] name or form ... which operate to impose a charge for the privilege of entering, trading in, or lying in a port.”
With this premise in mind, the court concluded that because Valdez taxes "ships and to no other property at all[,] ... in order to obtain revenue for general city purposes[, this was] ... the kind of tax that the Tonnage Clause forbids Valdez to impose without the consent of Congress, consent that Valdez lacks."
Supreme Court of the United States
The Supreme Court of the United States is the highest court in the United States. It has ultimate appellate jurisdiction over all state and federal courts, and original jurisdiction over a small range of cases...
in 2009, involving the tonnage clause of the United States Constitution
United States Constitution
The Constitution of the United States is the supreme law of the United States of America. It is the framework for the organization of the United States government and for the relationship of the federal government with the states, citizens, and all people within the United States.The first three...
.
The City of Valdez
Valdez, Alaska
Valdez is a city in Valdez-Cordova Census Area in the U.S. state of Alaska. According to 2005 Census Bureau estimates, the population of the city is 4,020. The city is one of the most important ports in Alaska. The port of Valdez was named in 1790 after the Spanish naval officer Antonio Valdés y...
in Alaska
Alaska
Alaska is the largest state in the United States by area. It is situated in the northwest extremity of the North American continent, with Canada to the east, the Arctic Ocean to the north, and the Pacific Ocean to the west and south, with Russia further west across the Bering Strait...
imposed a property tax
Property tax
A property tax is an ad valorem levy on the value of property that the owner is required to pay. The tax is levied by the governing authority of the jurisdiction in which the property is located; it may be paid to a national government, a federated state or a municipality...
that, in practice, applied only to large oil tankers. Polar Tankers, a ConocoPhillips
ConocoPhillips
ConocoPhillips Company is an American multinational energy corporation with its headquarters located in the Energy Corridor district of Houston, Texas in the United States...
subsidiary, sued, arguing that the tax violated the Tonnage Clause of the Constitution, which forbids a state
U.S. state
A U.S. state is any one of the 50 federated states of the United States of America that share sovereignty with the federal government. Because of this shared sovereignty, an American is a citizen both of the federal entity and of his or her state of domicile. Four states use the official title of...
, "without the Consent of Congress
United States Congress
The United States Congress is the bicameral legislature of the federal government of the United States, consisting of the Senate and the House of Representatives. The Congress meets in the United States Capitol in Washington, D.C....
, [to] lay any Duty of Tonnage."
The Supreme Court agreed with Polar Tankers. The court noted that the original meaning
Original meaning
In the context of United States constitutional interpretation, original meaning is the dominant form of the legal theory of originalism today...
of the clause was as a term of art for a tax imposed that varies with "the internal cubic capacity of a vessel
Watercraft
A watercraft is a vessel or craft designed to move across or through water. The name is derived from the term "craft" which was used to describe all types of water going vessels...
," but emphasized that a consistent line of cases had read the clause broadly, "forbidding a State to do that indirectly which she is forbidden ... to do directly." Those cases, the court concluded, stood for the proposition that the tonnage clause's prohibition reaches any taxes or duties on a ship, "whether a fixed sum upon its whole tonnage
Tonnage
Tonnage is a measure of the size or cargo carrying capacity of a ship. The term derives from the taxation paid on tuns or casks of wine, and was later used in reference to the weight of a ship's cargo; however, in modern maritime usage, "tonnage" specifically refers to a calculation of the volume...
, or a sum to be ascertained by comparing the amount of tonnage with the rate of duty[,] ... regardless of [the tax or duty's] name or form ... which operate to impose a charge for the privilege of entering, trading in, or lying in a port.”
With this premise in mind, the court concluded that because Valdez taxes "ships and to no other property at all[,] ... in order to obtain revenue for general city purposes[, this was] ... the kind of tax that the Tonnage Clause forbids Valdez to impose without the consent of Congress, consent that Valdez lacks."