425 U.S. 794 (1976), 70, Arizona v. New Mexico

Docket Nº:No. 70, Orig.
Citation:425 U.S. 794, 96 S.Ct. 1845, 48 L.Ed.2d 376
Party Name:Arizona v. New Mexico
Case Date:May 24, 1976
Court:United States Supreme Court

Page 794

425 U.S. 794 (1976)

96 S.Ct. 1845, 48 L.Ed.2d 376



New Mexico

No. 70, Orig.

United States Supreme Court

May 24, 1976



Motion by Arizona, purportedly in its proprietary capacity as a consumer of, and as parens patriae for its citizens who consume, electrical energy generated in New Mexico, for leave to file an original complaint in this Court against New Mexico seeking declaratoy and injunctive relief on constitutional grounds against New Mexico's tax on the generation of electricity in that State, is denied. The pending state court action in New Mexico by the Arizona utilities involved in this case raises the same constitutional issues and provides an appropriate forum for litigating such issues.

Per curiam opinion.


The State of Arizona, as a consumer, and its citizens, as consumers, purchase substantial amounts of electrical energy generated in New Mexico by three Arizona utilities operating generating facilities there. Two of the utilities are investor-owned public service corporations; the third, Salt River Project Agricultural Improvement and Power District, operates a federal reclamation project and is a political subdivision of Arizona. The utilities retail their electrical energy through interstate lines only to consumers in Arizona and, for that reason, incur no liability to New Mexico for its gross receipts tax which is incurred at the point of retail sale.1

In 1975, New Mexico passed the Electrical Energy Tax Act2 which imposes a tax on the generation of electricity at the rate of 4/10 of one mill per net kilowatt hour generated. The tax is nondiscriminatory on its face:

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it taxes all generation regardless of what is done with the electricity after generation. However, the 1975 Act provides a credit against gross receipts tax liability in the amount of the electrical energy tax paid for electricity consumed in New Mexico. The relevant section of the Act reads:

On electricity generated inside this state and consumed in this state which was subject to the electrical energy tax, the amount of such tax paid may be credited against the gross receipts tax due this state.3

The State of New Mexico concedes4 that the Arizona utilities will not be able to take advantage of the credit because their sales of electrical energy are outside the State ,and that, as to them, the practical effect of New Mexico's statutory scheme is to impose a tax no greater than 4% on the generation of electricity within New Mexico.

Seeking to invoke our original jurisdiction under Art. III, § 2, cls. 1 and 2, of the Constitution and 28 U.S.C. § 1251(a)(1), the State of...

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