9. Which of the following arguments would be LEAST helpful to the state in defending the constitutionality of this proposed state tax on widgets?

Article I, Section 8, Clause 3 empowers Congress to «regulate commerce with foreign nations and among the several states, and with the Indian tribes.» Commerce is defined as «every species of commercial intercourse. .. which concerns more states than one,» including virtually every form of activity involving or affecting two or more states. Gibbons v. Ogden, 22 U.S. 1 (1824).

The power of Congress to regulate commerce, although very broad, does have limits. A federal law must regulate under one of four categories: (i) channels of interstate commerce; (ii) instrumentalities of interstate commerce and persons and things in interstate commerce; (iii) articles moving in interstate commerce; or (iv) activities that have a substantial effect on interstate commerce.

By negative implication, the Commerce Clause restricts the regulatory power of the states with respect to interstate commerce (called the «Dormant Commerce Clause»). Where Congress has not regulated a subject, a state's regulation of local aspects of interstate commerce is valid if the regulation: (i) does not discriminate against out-of-state parties to benefit local economic interests; and (ii) is not unduly burdensome.

The Privileges and Immunities Clause of Article IV, Section 2 of the Constitution states that «the citizens of each state shall be entitled to all privileges and immunities of citizens in the several states.» This Clause protects the fundamental rights of individual citizens and restrains state efforts to discriminate against out-of-state citizens.

C is correct. This answer is the LEAST helpful in defending the constitutionality of the tax because it misstates and overstates the constitutional authorization of states to levy taxes. States do not have plenary authority to construct their tax system in any manner they choose. On the contrary, states have the authority to structure their tax system in any manner that does not violate some other portion of the U.S. Constitution. Citing the Tenth Amendment would be the least effective way to defend this proposed tax because it does not defeat an argument that the tax is otherwise unconstitutional.

A is incorrect. The argument that the widgets have not yet entered channels of interstate commerce at the time they are manufactured and taxed would be a more helpful basis for defending the proposed tax. This is because the Commerce Clause grants Congress plenary power to regulate interstate commerce, which includes channels of interstate commerce. Regardless of whether this argument would actually prevail, it is at least more helpful in combatting the idea that the widgets would be subject to this type of commercial regulation.

B is incorrect. The argument that the economic impact of this tax is non-discriminatory because it will be passed on to both in-state and out-of-state purchasers of widgets would also be a more helpful basis for defending the proposed tax. Multiple constitutional provisions prohibit or restrict discrimination against out-of-state individuals or businesses in favor of local interests. For example, such discrimination could raise constitutional problems under the Equal Protection Clause, the Privileges and Immunity Clause of Article IV, or the Dormant Commerce Clause. Thus, the fact that the tax is wholly non-discriminatory as to purchasers is a potentially helpful defense.

D is incorrect. The argument that a tax on the widget manufacturers is not likely to cause a multiple tax burden on interstate commerce would also be helpful in defending the proposed tax. The Dormant Commerce Clause prohibits a state's regulation of local aspects of interstate commerce from being unduly burdensome. As such, arguing that the tax will not add to or cause this type of burden would be a potentially helpful ground for defending the proposed tax.