It seems only fitting that the bicentennial of the Constitution provide the setting for a decision which may go far toward refining the parameters of commerce clause jurisprudence concerning state taxation. After all, the commerce clause-and the Constitution-was largely designed to undo the economic Balkanization seen under the Articles of Confederation.’ Historians tell us that during the brief period of the Articles of Confederation, states placed tariffs on imports from other states, charged entrance taxes to citizens of other states, and the like. The divisive effects of state discrimination, through taxes or otherwise, against interstate commerce are intolerable.
In National Can Corp. v. Washington Dep’t of Revenue (National Can) decided March 6, 1986 the Washington Supreme Court upheld the Washington Business & Occupation (B&O) Tax in the face of strong commerce clause challenges. In doing so, the Washington Court held, in essence, that the United States Supreme Court did not mean what it said in Armco Inc. v. Hardesty” (Armco), a West Virginia tax case in which the Washington Attorney General appeared as amicus curiae on the losing side.’ The United States Supreme Court has accepted review of National Can’.
Before delving into the specific facts and legal arguments involved in Armco and National Can, it is helpful to note exactly where these cases fit into the larger picture of commerce clause jurisprudence. In order to do so, an examination of the test for a violation of the commerce clause by an exercise of state taxing powers is appropriate. . .