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26. Should the state court issue the injunction?
The childhood home of a former U.S. president is part of a national park located in a city. The National Park Service entered into a contract with an independent antique collector to acquire items owned by residents of the city during the former president's lifetime. According to the contract, the collector purchases items and then sells them to the Park Service at a price equal to the collector's cost plus a 10% commission. Purchases by antique collectors are ordinarily subject to the sales tax of the state in which the city is located. The collector has filed suit in state court to enjoin collection of the tax on these purchases for the Park Service, claiming that the sales tax is unconstitutional as applied to them.
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B is incorrect. This answer correctly states that the court should not issue the injunction, but it misstates the legal basis for that conclusion. State courts generally have concurrent jurisdiction with federal courts over cases arising under federal law, and no exception to that general rule is presented on these facts. However, the incidence of the state sales tax on the collector's purchases of antiques is on the collector, who is independent of the National Park Service. Accordingly, the court should not issue an injunction.
C is incorrect. The incidence of the state sales tax on the collector's purchases of antiques is on the collector, who is independent of the National Park Service. The fact that the collector passes the cost of the tax on to a federal agency when the collector sells an item to the agency does not change the incidence of the tax on the collector's purchase. Accordingly, the court should not issue an injunction.
D is incorrect. There is no indication in the facts that the sales tax on the collector's purchases conflicts with any federal law governing the Park Service's program. Moreover, the incidence of the state sales tax on the collector's purchases of antiques is on the collector, who is independent of the National Park Service. Accordingly, the court should not issue an injunction.