Goldberg v. Sweet, 488 U.S. 252 (1989)

Author: John Paul Stevens

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Goldberg v. Sweet, 488 U.S. 252 (1989)

JUSTICE STEVENS, concurring in part and concurring in the judgment.

My reasons for concluding that the Illinois tax does not discriminate against interstate commerce are different from those expressed in Part II-C of the Court’s opinion. Unlike the Court, I do not believe Illinois may discriminate among its own residents by placing a heavier tax on those who engage in interstate commerce than on those who merely engage in local commerce. See ante at 266 ("It is not a purpose of the Commerce Clause to protect state residents from their own state taxes"). In fact, such a holding is a clear departure from our precedents. See, e.g., Tyler Pipe Industries, Inc. v. Washington Dept. of Revenue, 483 U.S. 232, 240-248 (1987) (invalidating manufacturing tax that discriminated between in state manufacturers that sold at wholesale in state and those that sold at wholesale out of state); Bacchus Imports, Ltd. v. Dias, 468 U.S. 263 (1984) (invalidating tax exemption for locally produced alcoholic beverages in case brought by local wholesalers); Boston Stock Exchange v. State Tax Comm’n, 429 U.S. 318, 333-334 (1977) (invalidating securities transfer tax that discriminated against those state residents who sold out-of-state, rather than in-state). Surely a state tax of 3% on the shipment of goods intrastate and of 5% on the shipment of goods interstate would violate the Commerce Clause.{1}

Appellants’ discrimination claim can best be illustrated by example: A call originating and terminating in Illinois that costs $10 is taxed at full value at 5%. A second call, originating in Illinois but terminating in Indiana, costs the same $10 and is taxed at the same full value at the same 5% rate. But while Illinois may properly tax the entire $10 of the first call, it (technically) may tax only that portion of the second call over which it has jurisdiction, namely, the intrastate portion of the call (say, for example, $5). By imposing an identical 50 cents tax on the two calls, Illinois has imposed a disproportionate economic burden on the interstate call. See American Trucking Assns., Inc. v. Scheiner, 483 U.S. 266 (1987) (invalidating flat tax that imposed disproportionate economic burden on interstate commerce).

This argument, however, overlooks the true overall incidence of the Illinois tax. Although Illinois taxes the entirety of every call charged to an Illinois number, it does not tax any part of the calls that are received at an Illinois number but charged elsewhere. Thus, although Illinois taxes the entire Illinois-Indiana $10 call, it taxes no part of the reciprocal Indiana-Illinois $10 call. At the 5% rate, Illinois receives 50 cents from the two calls combined, precisely the amount it receives from one $10 purely intrastate call. By taxing half of the relevant universe of interstate calls at full value, Illinois achieves the same economic result as taxing all of those calls at half value would achieve. As a result, interstate phone calls are taxed at a lower effective rate than intrastate calls,{2} and accordingly bear a proportional tax burden.{3}

With the exception of Part II-C, I join the Court’s opinion.

1. Perhaps it is the sales tax-like attributes of the Tax Act that have persuaded the Court to dismiss the discrimination claim by focusing solely on the sales tax-like impact on local residents. See ante at 262, 265, 266. A State may assess a sales tax on the entire value of the purchased item, even though some amount of that value was added in other States. Appellees have contended throughout this litigation that the tax involved here should be viewed as a sales tax on the cost of the phone call. The state court refused to so characterize the tax, instead concluding that the tax was assessed on interstate commerce. Goldberg v. Johnson, 117 Ill.2d 493, 498-500, 512 N.E.2d 1262, 1265-1266 (per curiam) (1987). Although the Court’s analysis is properly informed by the sales tax-like attributes of the tax in question, it does not ultimately challenge the state court’s characterization of the tax, and does not rest its holding on a recharacterization of the tax as a sales tax. Thus, it is insufficient to say, in response to the discrimination argument advanced by appellants, that, because the tax burden falls only on the Illinois consumer, the tax -- like a sales tax with a similar burden -- is nondiscriminatory. Because the premise of our review of the Tax Act is that it applies to interstate activity, we must go further in responding to appellants’ contention that the Act imposes a disproportionate burden on interstate commerce.

2. That is, half of the interstate calls are taxed at 5%, but the other half are taxed at 0%; the effective rate is 2 1/2%. On the other hand, all intrastate calls are taxed at 5%.

3. This analysis is not obviated by the Court’s statement, with which I agree, that "[w]e . . . doubt that termination of an interstate telephone call,by itself, provides a substantial enough nexus for a State to tax a call." Ante at 263. That one State through which interstate commerce flows may not constitutionally tax such commerce does not mean that another State may make up for the gap, as it were, by taxing its share as well as the first State’s share. Thus, even if Indiana could not constitutionally tax the mere termination of an Illinois-Indiana call, Illinois still may tax only the portion of the call over which it has jurisdiction.


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Chicago: John Paul Stevens, "Stevens, J., Concurring," Goldberg v. Sweet, 488 U.S. 252 (1989) in 488 U.S. 252 488 U.S. 269–488 U.S. 270. Original Sources, accessed April 23, 2018,

MLA: Stevens, John Paul. "Stevens, J., Concurring." Goldberg v. Sweet, 488 U.S. 252 (1989), in 488 U.S. 252, pp. 488 U.S. 269–488 U.S. 270. Original Sources. 23 Apr. 2018.

Harvard: Stevens, JP, 'Stevens, J., Concurring' in Goldberg v. Sweet, 488 U.S. 252 (1989). cited in 1989, 488 U.S. 252, pp.488 U.S. 269–488 U.S. 270. Original Sources, retrieved 23 April 2018, from