477 U.S. 1 (1986), 84-902, Wardair Canada v. Florida Department of Revenue
|Docket Nº:||No. 84-902|
|Citation:||477 U.S. 1, 106 S.Ct. 2369, 91 L.Ed.2d 1, 54 U.S.L.W. 4687|
|Party Name:||Wardair Canada v. Florida Department of Revenue|
|Case Date:||June 18, 1986|
|Court:||United States Supreme Court|
Argued March 31, 1986
APPEAL fro THE SUPREME COURT OF FLORIDA
During the time period in question, Florida law imposed a tax on all aviation fuel sold within the State to airlines regardless of whether the fuel was used to fly within or without the State, or whether the airline engaged in a substantial or a nominal amount of business within the State. Shortly after the law was enacted, appellant, a Canadian airline that operates charter flights to and from the United States, filed a state court action attacking the law's validity insofar as it authorized assessment of a tax on fuel used by foreign airlines exclusively in foreign commerce. Granting injunctive relief, the trial court held that an agreement between Canada and the United States expressed a "federal policy" to exempt foreign airlines from fuel taxes and precluded individual States from acting in such area. The Florida Supreme Court reversed in part, holding that the agreement did not preempt state sales taxes, and that the Florida tax was not invalid under the Foreign Commerce Clause of the Federal Constitution.
1. The Federal Aviation Act does not occupy the field of international aviation, and thus does not preempt all state regulation. Where a federal statute does not [106 S.Ct. 2370] expressly declare that state law is preempted, and where there is no actual conflict between what federal and state law prescribe, there must be evidence of a congressional intent to preempt the specific field covered by the state law. In the present case, not only is there no indication that Congress wished to preclude state sales taxation
of airline fuel, but, to the contrary, the Federal Aviation Act expressly permits States to impose such taxes. Pp. 5-7.
2. The Florida tax does not violate the dormant Foreign Commerce Clause on the ground that the tax threatens the ability of the Federal Government to speak with one voice with respect to the asserted federal policy of reciprocal tax exemptions for aircraft, equipment, and supplies, including aviation fuel, that constitute the instrumentalities of international air traffic. The evidence relied upon for such contention fails to reveal any such federal policy. Moreover, the evidence shows the absence of the sort of federal governmental silence that triggers dormant Commerce Clause analysis. The numerous international documents cited, including the agreement referred to in the courts below, show that, while there appears to be an international aspiration on the one hand to eliminate all impediments to foreign air travel -- including taxation of fuel -- the law as it presently stands acquiesces in taxation of the sale of that fuel by political subdivisions of countries. Although most of the cited bilateral agreements explicitly commit the United States to refrain from imposing national taxes on aviation fuel used by airlines of the other contracting party, none of the agreements explicitly interdict state or local taxes on aviation fuel used by foreign airlines in international traffic. The facts presented by this case show that the Federal Government has affirmatively decided to permit the States to impose sales taxes on aviation fuel. Pp. 7-13.
455 So.2d 326, affirmed.
BRENNAN, J., delivered the opinion of the Court, in which WHITE, MARSHALL, POWELL, REHNQUIST, STEVENS, and O'CONNOR, JJ., joined. BURGER, C.J., filed an opinion concurring in part and concurring in the judgment, post, p. 13. BLACKMUN, J., filed a dissenting opinion, post, p. 18.
BRENNAN, J., lead opinion
JUSTICE BRENNAN delivered the opinion of the Court.
Appellant Wardair Canada Inc., a Canadian airline that operates charter flights to and from the United States, maintains in this action that the Commerce Clause1 of the Constitution precludes Florida from applying to it a tax on aviation fuel purchased in that State. Wardair also asserts that the Florida tax must fall because it violates a "clear unequivocal directive of Congress," allegedly implicit in the Federal Aviation Act, 49 U.S.C.App. § 1301 et seq. (1982 ed. and Supp. II), that the Federal Government has exclusive regulatory power over foreign air commerce. Brief for Appellant v, 15.
We disagree with appellant's view and analysis of the operation of the Commerce Clause, and find that Congress has not acted to preempt state taxes such as that imposed by Florida. Accordingly, we affirm the judgment of the Supreme Court of Florida upholding the tax.
Florida has for many years taxed the sale of fuel to common carriers, including airlines, within the State. Prior to April 1, 1983, the tax was prorated on a mileage basis, so that a carrier was liable for only [106 S.Ct. 2371] the portion of the otherwise payable tax that was equal to the ratio of its Florida mileage to its worldwide mileage for the previous fiscal year. Fla.Stat. § 212.08 (4) (1975). Effective April 1, 1983, the Florida
law was amended to repeal the mileage proration formula for airlines, and the fuel tax was established at a rate of 5% on a deemed price of $1.148 per gallon. Fla.Stat. § 212.08 (4)(a)(2) (1985).2 Under the amended law, an airline was liable for the full amount of the fuel tax whether that fuel was used to fly within or without the State, and regardless of whether the airline engaged in a substantial or a nominal amount of business within the State. The effect of this amendment was, of course, to increase substantially the tax liability of airlines, such as foreign airlines, who fly largely outside of Florida, and who had, under the old scheme, paid little Florida tax on fuel.
Shortly after the new law was enacted, appellant filed suit in state court attacking its validity insofar as it authorized the assessment and collection of a tax on fuel used by foreign airlines exclusively in foreign commerce. Wardair argued, among other things, that the law was unconstitutional under the Commerce Clause, and that it was inconsistent with the Nonscheduled Air Services Agreement, May 8, 1974, United States-Canada, Art. XII, 25 U.S.T. 787, T.I.A.S. No. 7826 (U.S.-Canadian Agreement or Agreement), a bilateral agreement between the Governments of Canada and the United States regulating air charter service between the two countries. Wardair's case was consolidated for trial with a similar suit brought by a number of other foreign airlines.
In a separate order addressing only Wardair's claims, the trial court rejected the Commerce Clause arguments, but found that the U.S.-Canadian Agreement expressed a "federal policy" to exempt foreign airlines from fuel taxes. The court further found that this "policy" precluded the individual States from acting in this area, and thus preventing the
United States from "speaking with one voice" with respect to foreign commerce. In reaching this conclusion, the court relied largely on our decision in Japan Line, Ltd. v. County of Los Angeles, 441 U.S. 434 (1979). The court granted appellant a permanent injunction against the Florida Department of Revenue from assessing and collecting the fuel tax from Wardair.
The case was certified to the Supreme Court of Florida, which reversed, in part, the trial court. 455 So.2d 326 (1984). The Supreme Court first noted that the U.S.-Canadian Agreement, by its terms, exempted carriers only from national, as opposed to state or local (or, in the case of Canada, provincial) excise taxes, inspection fees, and other charges, and thus held that the Agreement did not preempt state sales taxes. Nor was the court persuaded that the Florida tax was invalid under the Foreign Commerce Clause. The court again referred to the fact that the Agreement exempted only national taxes, and "presume[d] this has been done intentionally." Id. at 329. Having determined that the Federal Government had, in effect, itself elected not to prohibit the States from taxing aviation fuel, the court rejected the contention that the state tax "prevents our federal government from speaking with one voice," ibid., and thus distinguished Japan Line. We noted probable jurisdiction, 474 U.S. 943 (1984), and now affirm.
Wardair suggests that, by enacting the Federal Aviation Act (Act), Congress "left no room for local government participation" with respect to foreign air travel. Brief for Appellant 39. Appellant does not [106 S.Ct. 2372] expressly label this a preemption argument; rather, it relies on metaphor and tells us that,
in the field of foreign air commerce, it is the Federal Government that calls the tune. It is the Federal Government that is the conductor of the music, deciding how it is to be played and who are the players.
Id. at 44. We
assume that appellant intends, by this metaphor, to persuade us that Congress has determined to "occupy the field" of international aviation, and thus to preempt all state regulation. The argument is without merit.
It is, of course, true, as appellant notes, that Congress has, through the Act, regulated aviation extensively. The agencies charged by Congress with regulatory responsibility over foreign air travel exercise power, as appellant observes, over licensing...
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