Polar Tankers, Inc. v. City of Valdez, Alaska

(Slip Opinion) OCTOBER TERM, 2008 1
Syllabus
NOTE: Where it is feasible, a syllabus (headnote) will be released, as is
being done in connection with this case, at the time the opinion is issued.
The syllabus constitutes no part of the opinion of the Court but has been
prepared by the Reporter of Decisions for the convenience of the reader.
See United States v. Detroit Timber & Lumber Co., 200 U.S. 321, 337.
SUPREME COURT OF THE UNITED STATES
Syllabus
POLAR TANKERS, INC. v. CITY OF VALDEZ, ALASKA
CERTIORARI TO THE SUPREME COURT OF ALASKA
No. 08–310. Argued April 1, 2009—Decided June 15, 2009
A Valdez, Alaska, ordinance that imposes a personal property tax on
certain boats and vessels contains exceptions which, in effect, largely
limit its applicability to large oil tankers. Petitioner Polar Tankers,
Inc., whose vessels transport crude oil from the Port of Valdez to re
fineries in other States, challenged the ordinance in state court,
claiming (1) that the tax was unconstitutional under Art. I, §10, cl. 3,
which forbids a “State . . . without the Consent of Congress, [to] lay
any Duty of Tonnage,” and (2) that the tax’s value-allocation method
violated the Commerce and Due Process Clauses. The court rejected
the Tonnage Clause claim, but accepted the Commerce Clause and
Due Process Clause claim. On appeal, the State Supreme Court up
held the tax, finding that because it was a value-based property tax,
the tax was not a duty of tonnage. The State Supreme Court also
held the allocation method was fair and thus valid under the Com
merce and Due Process Clauses.
Held: The judgment is reversed, and the case is remanded.
182 P.3d 614, reversed and remanded.
JUSTICE BREYER delivered the opinion of the Court with respect to
Parts I, II–A, and II–B–1, concluding that Valdez’s tax violates the
Tonnage Clause. Consequently, Polar Tankers’ alternative Com
merce Clause and Due Process Clause arguments need not be consid
ered. Pp. 3–8.
(a) This Court has consistently interpreted the language of the
Tonnage Clause in light of its purpose, which mirrors the intent of
other constitutional provisions that seek to restrain the States from
exercising the taxing power in a way that is injurious to the interests
of other States. The Clause seeks to prevent States from nullifying
Art. I, §10, cl. 2’s prohibition against import and export duties by tax
ing “the vessels transporting the merchandise.” Clyde Mallory Lines
2 POLAR TANKERS, INC. v. CITY OF VALDEZ
Syllabus
v. Alabama ex rel. State Docks Comm’n, 296 U.S. 261, 265. It also
reflects an effort to diminish a State’s ability to obtain tax advan
tages based on its favorable geographic position. Because the Clause
forbids a State to “do that indirectly which she is forbidden . . . to do
directly,” Passenger Cases, 7 How. 283, 458, the “prohibition against
tonnage duties has been deemed to embrace all taxes and duties re
gardless of their name or form, and even though not measured by the
tonnage of the vessel, which operate to impose a charge for the privi
lege of entering, trading in, or lying in a port,” Clyde Mallory Lines,
supra, at 265–266. Pp. 3–6.
(b) This case lies at the heart of what the Tonnage Clause forbids.
The ordinance seems designed to impose “a charge for the privilege of
entering, trading in, or lying in a port.” The tax applies almost ex
clusively to oil tankers, but to no other form of personal property. An
oil tanker can be subject to the tax based on a single entry into the
port. Moreover, the tax is closely correlated with cargo capacity.
Contrary to Valdez’s argument, the fact that the tax is designed to
raise revenue for general municipal services argues for, not against,
application of the Clause. Pp. 6–8.
JUSTICE BREYER, joined by JUSTICE SCALIA, JUSTICE KENNEDY, and
JUSTICE GINSBURG, rejected, in Part II–B–2, Valdez’s claim that, under
State Tonnage Tax Cases, 12 Wall. 204, its tax is “not within the pro
hibition of the Constitution,” because it is “levied . . . upon ships . . .
as property, based on a valuation of the same as property,” id., at 213
(emphasis deleted). This Court later made clear that the “prohibi
tion” against tonnage duties “comes into play” where vessels “are not
taxed in the same manner as the other property of the citizens,”
Transportation Co. v. Wheeling, 99 U.S. 273, 284. This qualification,
important in light of the Clause’s purpose, means that, in order to
fund services by taxing ships, a State must also impose similar taxes
upon other businesses. Valdez fails to satisfy this requirement. The
Court can find little, if any, other personal property that Valdez
taxes. Because its value-related property tax on mobile homes, trail
ers, and recreational vehicles applies only if they are “affixed” to a
particular site, it taxes those vehicles as a form of real, not personal,
property. Valdez also claims that its ship tax is simply another form
of a value-based tax on oil-related property provided by state law.
But Valdez’s tax, a purely a municipal tax, differs from the tax on
other oil-related property, which is primarily a state-level tax, in sev
eral ways. As a result of these differences, an ordinary oil-related
business finding the tax on its movable property too burdensome
must complain to the State, which is in charge of setting the manner
of assessment and valuation. At the same time, an oil tanker finding
its vessel tax too burdensome must complain to Valdez, for the State
Cite as: 557 U. S. ____ (2009) 3
Syllabus
has nothing to do with that tax’s rate, valuation, or assessment.
There is also no effective electorate-related check on Valdez’s vessel
taxing power comparable to the check available when a property tax
is more broadly imposed. Valdez’s property tax hits only ships; it is
not constrained by any need to treat ships and other business prop
erty alike. Thus, Valdez’s tax lacks the safeguards implied by this
Court’s statements that a property tax on ships escapes the Tonnage
Clause’s scope only when that tax is imposed upon ships “in the same
manner” as it is imposed on other forms of property. Pp. 8–13.
THE CHIEF JUSTICE, joined by JUSTICE THOMAS, agreed that Valdez’s
tax is unconstitutional, but concluded that the city’s argument that its
tax may be sustained as a property tax similar to ones the city imposes
on other property should be rejected because an unconstitutional tax on
maritime commerce does not become permissible when bundled with
taxes on other activities or property. Pp. 1–3.
JUSTICE ALITO agreed that Valdez’s tax is unconstitutional, but con
cluded that the tax is an unconstitutional duty of tonnage even if the
Tonnage Clause permits a true, evenhanded property tax to be ap
plied to vessels. P. 1.
BREYER, J., announced the judgment of the Court and delivered the
opinion of the Court with respect to Parts I, II–A, and II–B–1, in which
SCALIA, KENNEDY, GINSBURG, and ALITO, JJ., joined, and an opinion
with respect to Part II–B–2, in which SCALIA, KENNEDY, and GINSBURG,
JJ., joined. ROBERTS, C. J., filed an opinion concurring in part and con
curring in the judgment, in which THOMAS, J., joined. ALITO, J., filed an
opinion concurring in part and concurring in the judgment. STEVENS,
J., filed a dissenting opinion, in which SOUTER, J., joined.
Cite as: 557 U. S. ____ (2009) 1
Opinion of the Court
NOTICE: This opinion is subject to formal revision before publication in the
preliminary print of the United States Reports. Readers are requested to
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ington, D. C. 20543, of any typographical or other formal errors, in order
that corrections may be made before the preliminary print goes to press.
SUPREME COURT OF THE UNITED STATES
_________________
No. 08–310
_________________
POLAR TANKERS, INC., PETITIONER v. CITY OF
VALDEZ, ALASKA
ON WRIT OF CERTIORARI TO THE SUPREME COURT OF ALASKA
[June 15, 2009]
JUSTICE BREYER announced the judgment of the Court
and delivered the opinion of the Court with respect to
Parts I, II–A, and II–B–1, and an opinion with respect to
Part II–B–2, in which JUSTICE SCALIA, JUSTICE KENNEDY,
and JUSTICE GINSBURG join.
The Constitution forbids a “State . . . without the Con­
sent of Congress, [to] lay any Duty of Tonnage.” Art. I,
§10, cl. 3. The city of Valdez, Alaska, has enacted an
ordinance that imposes a personal property tax upon the
value of large ships that travel to and from that city. We
hold that the ordinance violates the Clause.
I
In 1999, the city of Valdez, Alaska (City), adopted an
ordinance imposing a personal property tax upon “[b]oats
and vessels of at least 95 feet in length” that regularly
travel to the City, are kept or used within the City, or
which annually take on at least $1 million worth of cargo
or engage in other business transactions of comparable
value in the City. Valdez Ordinance No. 99–17 (1999)
(codified as Valdez Municipal Code §3.12.020 (2008)). The
ordinance contains exceptions that, in effect, limit the
tax’s applicability primarily to large oil tankers. Ibid.
2 POLAR TANKERS, INC. v. CITY OF VALDEZ
Opinion of the Court
And the City applies the tax in accordance with a value­
allocation system that adjusts the amount owed down­
wards insofar as the tankers spend time in other ports.
Valdez, Alaska Resolution No. 00–15, App. to Pet. for Cert.
53a–56a.
Polar Tankers, Inc., a subsidiary of ConocoPhillips,
owns vessels that transport crude oil from a terminal in
the Port of Valdez (located at the southern end of the
Trans Alaska Pipeline System) to refineries in California,
Hawaii, and Washington. In August 2000, Polar Tankers
filed a lawsuit in Alaska Superior Court challenging the
tax as unconstitutional. Polar Tankers argued that the
tax effectively imposed a fee on certain vessels for the
privilege of entering the port; hence it amounted to a
constitutionally forbidden “Duty of Tonnage.” It also
argued that the tax calculation method (as applied to
vessels with a tax situs elsewhere) violated the Commerce
and Due Process Clauses by failing to take account of the
time a ship spent at sea or being serviced or repaired.
Polar Tankers said that the method thereby overstated
the percentage of the ship’s total earning capacity rea­
sonably allocated to time spent in the Port of Valdez.
The Alaska Superior Court rejected the Tonnage
Clause claim, but it accepted the Commerce Clause and
Due Process Clause claim. And, for that reason, it held
the tax unconstitutional. On appeal, the Alaska Supreme
Court, rejecting both claims, upheld the tax. In respect to
the Tonnage Clause claim, the Supreme Court noted that
Valdez’s tax was a value-based property tax designed to
pay for “services available to all taxpayers in the city,”
including Polar Tankers; and it concluded that “a charge
based on the value of property is not a duty of tonnage.”
182 P.3d 614, 623 (2008) (citing Transportation Co. v.
Wheeling, 99 U.S. 273 (1879)). In respect to the Com­
merce Clause and Due Process Clause claim, the Supreme
Court held that Valdez’s allocation method was fair, hence
Cite as: 557 U. S. ____ (2009) 3
Opinion of the Court
constitutional. 182 P. 3d, at 617–622.
Polar Tankers asked us to review the Alaska Supreme
Court’s determination. And we granted its petition in
order to do so.
II
A
We begin, and end, with Polar Tankers’ Tonnage
Clause claim. We hold that Valdez’s tax is unconstitu­
tional because it violates that Clause. And we conse­
quently need not consider Polar Tankers’ alternative
Commerce Clause and Due Process Clause argument.
When the Framers originally wrote the Tonnage
Clause, the words it uses, “Duty of Tonnage,” referred in
commercial parlance to “a duty” imposed upon a ship,
which duty varies according to “the internal cubic capacity
of a vessel,” i.e., its tons of carrying capacity. Clyde Mal
lory Lines v. Alabama ex rel. State Docks Comm’n, 296
U.S. 261, 265 (1935) (citing Inman S. S. Co. v. Tinker, 94
U.S. 238, 243 (1877)); see also T. Cooley, Constitutional
Limitations 596 (6th ed. 1890). Over a century ago, how­
ever, this Court found that the Framers intended those
words to refer to more than “a duty” that sets a “certain
rate on each ton” of capacity. Steamship Co. v. Portwar
dens, 6 Wall. 31, 34 (1867).
The Court over the course of many years has consis­
tently interpreted the language of the Clause in light of its
purpose, a purpose that mirrors the intent of other consti­
tutional provisions which, like the Tonnage Clause itself,
seek to “restrai[n] the states themselves from the exercise”
of the taxing power “injuriously to the interests of each
other.” J. Story, Commentaries on the Constitution of the
United States §497, p. 354 (1833) (abridged version).
Article I, §10, cl. 2, for example, forbids States to “lay any
Imposts or Duties on Imports or Exports.” It thereby
seeks to prevent states with “convenient ports” from plac­
4 POLAR TANKERS, INC. v. CITY OF VALDEZ
Opinion of the Court
ing other States at an economic disadvantage by laying
levies that would “ta[x] the consumption of their
neighbours.” 3 Records of the Federal Convention of 1787,
pp. 542, 519 (M. Farrand rev. 1966) (reprinting James
Madison, Preface to Debates in the Convention of 1787
and letter from James Madison to Professor Davis, 1832).
The coastal States were not to “take advantage of their
favorable geographical position in order to exact a price for
the use of their ports from the consumers dwelling in less
advantageously situated parts of the country.” Youngs
town Sheet & Tube Co. v. Bowers, 358 U.S. 534, 556–557
(1959) (Frankfurter, J., dissenting).
In writing the Tonnage Clause, the Framers recognized
that, if “the states had been left free to tax the privilege of
access by vessels to their harbors the prohibition against
duties on imports and exports could have been nullified by
taxing the vessels transporting the merchandise.” Clyde
Mallory Lines, supra, at 265. And the Court has under­
stood the Tonnage Clause as seeking to prevent that
nullification. See Steamship Co., supra, at 34–35; see also
Packet Co. v. Keokuk, 95 U.S. 80, 87 (1877); Gibbons v.
Ogden, 9 Wheat. 1, 202 (1824). It has also understood the
Clause as reflecting an effort to diminish a State’s ability
to obtain certain geographical vessel-related tax advan­
tages whether the vessel in question transports goods
between States and foreign nations or, as here, only be­
tween the States. Compare Inman, supra (invalidating a
fee applied to ships engaged in foreign commerce), with
Steamship Co., supra (invalidating a tax applied to ships
engaged in interstate commerce).
Interpreting the Clause in light of its “intent,” id., at
34, the Court has read its language as forbidding a State
to “do that indirectly which she is forbidden . . . to do
directly.” Passenger Cases, 7 How. 283, 458 (1849). Thus,
the Court has said that the Clause, which literally forbids
a State to “levy a duty or tax . . . graduated on the ton­
Cite as: 557 U. S. ____ (2009) 5
Opinion of the Court
nage,” must also forbid a State to “effect the same purpose
by merely changing the ratio, and graduating it on the
number of masts, or of mariners, the size and power of the
steam-engine, or the number of passengers which she
carries.” Id., at 458–459. A State cannot take what would
otherwise amount to a tax on the ship’s capacity and evade
the Clause by calling that tax “a charge on the owner or
supercargo,” thereby “justify[ing] this evasion of a great
principle by producing a dictionary or a dictum to prove
that a ship-captain is not a vessel, nor a supercargo an
import.” Id., at 459.
The Court has consequently stated that the Tonnage
Clause prohibits, “not only a pro rata tax . . ., but any duty
on the ship, whether a fixed sum upon its whole tonnage,
or a sum to be ascertained by comparing the amount of
tonnage with the rate of duty.” Steamship Co., supra, at
35. And, summarizing earlier cases while speaking for a
unanimous Court, Justice Stone concluded that the “pro­
hibition against tonnage duties has been deemed to em­
brace all taxes and duties regardless of their name or
form, and even though not measured by the tonnage of the
vessel, which operate to impose a charge for the privilege
of entering, trading in, or lying in a port.” Clyde Mallory
Lines, supra, at 265–266. Cf. Cannon v. New Orleans, 20
Wall. 577 (1874) (invalidating a tax imposed on ships
entering a port, which tax was graduated based on the
ships’ capacity and length of stay); Inman, supra (invali­
dating a fee imposed on ships of a certain capacity that
entered a port); Steamship Co., supra (invalidating a flat
tax imposed on every ship that entered a port, regardless
of the ship’s capacity).
Although the Clause forbids all charges, whatever their
form, that impose “a charge for the privilege of entering,
trading in, or lying in a port,” nothing in the history of the
adoption of the Clause, the purpose of the Clause, or this
Court’s interpretation of the Clause suggests that it oper­
6 POLAR TANKERS, INC. v. CITY OF VALDEZ
Opinion of the Court
ates as a ban on any and all taxes which fall on vessels
that use a State’s port, harbor, or other waterways. See
post, at 1–2 (ROBERTS, C. J., concurring in part and con­
curring in judgment). Such a radical proposition would
transform the Tonnage Clause from one that protects
vessels, and their owners, from discrimination by seaboard
States, to one that gives vessels preferential treatment
vis-à-vis all other property, and its owners, in a seaboard
State. The Tonnage Clause cannot be read to give vessels
such “preferential treatment.” Cf. Michelin Tire Corp. v.
Wages, 423 U.S. 276, 287 (1976) (noting, in a related
context, that the Import-Export Clause “cannot be read to
accord imported goods preferential treatment that permits
escape from uniform taxes imposed without regard to
foreign origin for services which the State supplies”). See
also infra this page and 7–11.
B
1
Does the tax before us impose “a charge for the privilege
of entering, trading in, or lying in a port”? Certainly, the
ordinance that imposes the tax would seem designed to do
so. It says that the tax applies to ships that travel to (and
leave) the City’s port regularly for business purposes, that
are kept in the City’s port, that take on more than $1
million in cargo in that port, or that are involved in busi­
ness transactions in that amount there. In practice, the
tax applied in its first year to 28 vessels, of which 24 were
oil tankers, 3 were tugboats, and 1 was a passenger cruise
ship. App. 53. The ordinance applies the tax to no other
form of personal property. See Valdez Municipal Code
§3.12.030(A)(2) (2008).
Moreover, the tax’s application and its amount depend
upon the ship’s capacity. That is to say, the tax applies
only to large ships (those at least 95 feet in length), while
exempting small ones. See §3.12.020(A)(1).
Cite as: 557 U. S. ____ (2009) 7
Opinion of the Court
Nor can Valdez escape application of the Clause by
claiming that the ordinance imposes, not a duty or a tax,
but a fee or a charge for “services rendered” to a “vessel,”
such as “pilotage,” “wharfage,” “medical inspection,” the
“use of locks,” or the like. Clyde Mallory Lines, 296 U. S.,
at 266; see also Inman, 94 U. S., at 243. To the contrary,
the ordinance creates a tax designed to raise revenue used
for general municipal services. See 182 P. 3d, at 623;
Valdez, Alaska Resolution No. 00–15, App. to Pet. for Cert.
53a–56a. Tonnage Clause precedent makes clear that,
where a tax otherwise qualifies as a duty of tonnage, a
general, revenue-raising purpose argues in favor of, not
against, application of the Clause. See Steamship Co., 6
Wall., at 34.
This case lies at the heart of what the Tonnage Clause
forbids. The ordinance applies almost exclusively to oil
tankers. And a tax on the value of such vessels is closely
correlated with cargo capacity. Because the imposition of
the tax depends on a factor related to tonnage and that
tonnage-based tax is not for services provided to the ves­
sel, it is unconstitutional.
The dissent contends that the tax does not operate as “a
charge for the privilege of entering, trading in, or lying in
a port,” Clyde Mallory Lines, supra, at 265–266—that is,
as an impermissible tonnage duty—because Valdez levies
its tax only upon vessels that meet a “tax situs” require­
ment. See post, at 6–7 (opinion of STEVENS, J.). But in
this case, the distinction the dissent draws between ton­
nage duties and property taxes is a distinction without a
difference. That is because to establish a tax situs under
the tax challenged here, an oil tanker needs only to enter
the port and load oil worth more than $1 million. And, as
Polar Tankers notes, oil tankers routinely carry millions of
barrels of oil at a time worth well in excess of $1 million.
Reply Brief for Petitioner 6. Thus, by virtue of a single
entry into the port, “trading” once in that port, or “lying”
8 POLAR TANKERS, INC. v. CITY OF VALDEZ
Opinion of the Court
Opinion of BREYER, J.
once in that port, a tanker automatically establishes a tax
situs in Valdez. No one claims that this basis for estab­
lishing a tax situs is insufficient under the Constitution.
After all, a nondomiciliary jurisdiction may constitution­
ally tax property when that property has a “substantial
nexus” with that jurisdiction, and such a nexus is estab­
lished when the taxpayer “avails itself of the substantial
privilege of carrying on business” in that jurisdiction. See
Japan Line, Ltd. v. County of Los Angeles, 441 U.S. 434,
441–445 (1979) (internal quotation marks omitted); Mobil
Oil Corp. v. Commissioner of Taxes of Vt., 445 U.S. 425,
437 (1980) (same); Quill Corp. v. North Dakota, 504 U.S.
298, 312 (1992). Here, the City identified the 28 vessels
that were subject to the tax in the year 2000. But the City
fails to point to a single oil tanker, or any vessel greater
than 95 feet in length, that both entered the port and
failed to establish a tax situs. See App. 53. What else is
needed to show that a tax characterized as one on property
may nevertheless function as a “charge for the privilege of
entering . . . a port”?
2
Valdez does not deny that its tax operates much like a
duty applied exclusively to ships. But, like the Alaska
Supreme Court, it points to language in an earlier Court
opinion explicitly stating that “[t]axes levied . . . upon
ships . . . as property, based on a valuation of the same as
property, are not within the prohibition of the Constitu­
tion.” State Tonnage Tax Cases, 12 Wall. 204, 213 (1871)
(emphasis deleted); cf. 182 P. 3d, at 622, and n. 43. Valdez
says that its tax is just such a value-related tax on per­
sonal property and consequently falls outside the scope of
the Clause. Brief for Respondent 16–23.
Our problem with this argument, however, is that the
Court later made clear that the Clause does not apply to
“taxation” of vessels “as property in the same manner as
Cite as: 557 U. S. ____ (2009) 9
Opinion of the Court
Opinion of BREYER, J.
other personal property owned by citizens of the State.”
“[W]here” vessels “are not taxed in the same manner as
the other property of the citizens,” however, the “prohibi­
tion . . . comes into play.” Wheeling, 99 U. S., at 284 (em­
phasis added).
Viewed in terms of the purpose of the Clause, this
qualification is important. It means that, in order to fund
services by taxing ships, a State must also impose similar
taxes upon other businesses. And that fact may well
operate as a check upon a State’s ability to impose a tax on
ships at rates that reflect an effort to take economic ad­
vantage of the port’s geographically based position. After
all, the presence of other businesses subject to the tax,
particularly businesses owned and operated by state
residents, threatens political concern and a potential
ballot-box issue, were rates, say, to get out of hand. See
Cooley v. Board of Wardens of Port of Philadelphia ex rel.
Soc. for Relief of Distressed Pilots, 12 How. 299, 315
(1852); cf. South Carolina Highway Dept. v. Barnwell
Brothers, Inc., 303 U.S. 177, 185, n. 2 (1938) (when state
action affecting interstate commerce “is of such a charac­
ter that its burden falls principally upon those without the
state, legislative action is not likely to be subjected to
those political restraints which are normally exerted on
legislation where it affects adversely some interests within
the state”).
Moreover, and at the very least, a “same manner”
requirement helps to assure that a value-related property
tax differs significantly from a graduated tax on a ship’s
capacity and that the former is not simply a redesignation
of the latter. See Packet Co., 95 U. S., at 88 (“ ‘It is the
thing and not the name that is to be considered’ ” (quoting
Cooley, supra, at 314)).
In our view, Valdez fails to satisfy this requirement. It
does not tax vessels “in the same manner as other per­
sonal property” of those who do business in Valdez.
10 POLAR TANKERS, INC. v. CITY OF VALDEZ
Opinion of the Court
Opinion of BREYER, J.
Wheeling, supra, at 284. We can find little, if any, other
personal property that it taxes. According to the State of
Alaska, Valdez specifically exempts from property taxa­
tion motor vehicles, aircraft, and other vehicles, as well as
business machinery. See Dept. of Community and Eco­
nomic Development, Division of Community and Business
Development, Office of the State Assessor, Alaska Taxable
2001, p. 20 (Jan. 2002), (Table 4), online at
http://www.commerce.state.ak.us/dca/Taxable/AKTaxable2
001.pdf (as visited June 10, 2009, and available in Clerk of
Court’s case file).
We concede, as Valdez points out, that a different
Valdez ordinance imposes what it characterizes as a
value-based property tax on mobile homes, trailers, and
recreational vehicles. Valdez Municipal Code §3.12.022
(2008); Brief for Respondent 24–25. But that same ordi­
nance exempts those vehicles from its property tax unless
they are “affixed” to a particular site. Hence, whatever
words the City uses to describe the tax imposed on mobile
homes, trailers, and recreational vehicles, Valdez in fact
taxes those vehicles only when they constitute a form, not
of personal property, but of real property (like a home).
See §3.12.022 (providing that “trailers and mobile homes”
are “subject to taxation” when they are classified as “real
property”).
Valdez also points to a separate City ordinance that
imposes a tax “on all taxable property taxable under
Alaska Statutes Chapter 43.56.” §3.28.010 (2008). The
Alaska Statutes Chapter identifies as taxable “aircraft
and motor vehicles” the operation of which “relates to” the
“exploration for, production of, or pipeline transportation
of gas or unrefined oil.” Alaska Stat. §43.56.210 (2008).
Valdez claims that its tax on ships is simply another form
of this value-related tax on oil-related property.
Valdez did not make this claim in the lower courts,
however. Nor does the State of Alaska (which has filed a
Cite as: 557 U. S. ____ (2009) 11
Opinion of the Court
Opinion of BREYER, J.
brief in support of Valdez) support this particular claim.
Brief for State of Alaska et al. as Amici Curiae 32–33.
Thus, we lack the State’s explanation of just how the tax
on oil-related vehicles works. And, lacking precise infor­
mation, we might ordinarily decline to consider this claim.
See, e.g., Clingman v. Beaver, 544 U.S. 581, 597–598
(2005).
Nonetheless, the parties have argued the matter in
their briefs here; and our deciding the matter now will
reduce the likelihood of further litigation. We may make
exceptions to our general approach to claims not raised
below; and for these reasons we shall do so. See Granfi
nanciera, S. A. v. Nordberg, 492 U.S. 33, 39 (1989).
Addressing the claim on the basis of the briefs and
what we have gleaned from publicly available sources, we
note that Valdez’s ship tax differs from the tax on other
oil-related property in several ways. The former is a
purely municipal tax. The City imposes it; the City alone
determines what property is subject to the tax; the City
establishes the rate of taxation; the City values the prop­
erty; the City resolves evaluation disputes; the City issues
assessment notices; the City collects the tax; and the City
(as far as we can tell) keeps the revenue without any
restrictions. See Valdez Municipal Code §3.12.020(A)(1)
(2008); §3.12.060; §3.12.020(B); §§3.12.090–3.12.100;
§3.12.210(A) (2001); Valdez, Alaska Resolution No. 00–15,
App. to Pet. for Cert. 53a–56a.
The latter is primarily a state-level tax. The State
imposes it. In fact, Valdez’s city manager characterized
the oil-property tax as involving “property taxed by the
State . . . and [raising revenue] subsequently shared with
the City.” App. 46 (affidavit of Dave Dengel). In addition,
the State determines the type of property subject to the
tax; the State forbids the municipality to exempt any
property it designates as taxable; the State regulates the
rate of taxation that may be applied to property it desig­
12 POLAR TANKERS, INC. v. CITY OF VALDEZ
Opinion of the Court
Opinion of BREYER, J.
nates as taxable; the State issues assessment notices; the
State resolves evaluation disputes; and the State, while
permitting the municipality to set the precise tax rate and
to collect the tax, imposes certain kinds of limits upon the
amount of the resulting revenue that the municipality
may raise that, in effect, provide a check against excessive
rates. See Alaska Stat. §43.56.010(b) (2008);
§43.56.210(5)(A); 15 Alaska Admin. Code §56.010 (2009);
§§56.015–56.040; Alaska Stat. §§29.45.080(b), (c) (2008);
§43.56.010(c).
These differences matter. For one thing, they mean that
any ordinary oil-related business, other than ships, that
finds the tax imposed upon its movable property too bur­
densome must complain to the State, not to the City, for it
is the State that is in charge of setting the manner of
assessment and valuation. At the same time, an oil
tanker that finds the vessel tax too burdensome must
complain to the City, not to the State, for the State has
nothing to do with the rate, valuation, or assessment of
that particular tax.
For another thing, they mean that there is no effective
electorate-related check (comparable to the check avail­
able where a property tax is more broadly imposed) upon
the City’s vessel-taxing power. The City’s property tax
hits ships and only ships; it is not constrained by any need
to treat ships and other business property alike. Taken
together, these two considerations mean that Valdez’s
property tax lacks the safeguards implied by this Court’s
statements that a property tax on ships escapes the scope
of the Tonnage Clause only when that tax is imposed upon
ships “in the same manner” as it is imposed on other forms
of property.
THE CHIEF JUSTICE contends that a State may never
impose a property tax on a vessel belonging to a citizen of
another State, even if that vessel is taxed in the “same
manner” as other personal property in the taxing state.
Cite as: 557 U. S. ____ (2009) 13
Opinion of the Court
Opinion of BREYER, J.
See post, at 1–2 (opinion concurring in part and concurring
in judgment). But, as THE CHIEF JUSTICE concedes, this
Court held in the State Tonnage Tax Cases and Wheeling
that vessels belonging to a State’s own citizens may be
subject to a property tax when the vessels are taxed in the
same manner as other personal property owned by citizens
of that State. At the time those cases were decided, the
home port doctrine was still in effect, which meant that
vessels were taxable solely by the owner’s domicile State.
Since the State Tonnage Tax Cases and Wheeling, the
home port doctrine has been abandoned and States are
now permitted to tax vessels belonging to citizens of other
States that develop a tax situs in the nondomiciliary
State, provided the tax is fairly apportioned. See, e.g., Ott
v. Mississippi Valley Barge Line Co., 336 U.S. 169, 172–
174 (1949); Japan Line, Ltd. v. County of Los Angeles, 441
U.S. 434, 442–443 (1979). Given this evolution in the law
governing interstate taxation since our decisions in the
State Tonnage Tax Cases and Wheeling, there is little
reason to think that the ability of a State to tax vessels in
the “same manner” as other personal property applies only
to vessels owned by citizens of the taxing State. In any
event, we need not decide this issue because it is clear that
the vessels subject to the City’s ordinance are not taxed in
the same manner as other personal property.
As far as we can tell, then, Valdez applies a value­
based personal property tax to ships and to no other prop­
erty at all. It does so in order to obtain revenue for gen­
eral city purposes. The tax, no less than a similar duty,
may (depending upon rates) “ta[x] the consumption” of
those in other states. See 3 Records of the Federal Con­
vention of 1787, at 519 (reprinting letter from James
Madison to Professor Davis, 1832). It is consequently the
kind of tax that the Tonnage Clause forbids Valdez to
14 POLAR TANKERS, INC. v. CITY OF VALDEZ
Opinion of the Court
Opinion of BREYER, J.
impose without the consent of Congress, consent that
Valdez lacks.
* * *
We conclude that the tax is unconstitutional. We re­
verse the contrary judgment of the Supreme Court of
Alaska. And we remand the case for further proceedings.
It is so ordered.
Cite as: 557 U. S. ____ (2009) 1
Opinion of ROBERTS, C. J.
SUPREME COURT OF THE UNITED STATES
_________________
No. 08–310
_________________
POLAR TANKERS, INC., PETITIONER v. CITY OF
VALDEZ, ALASKA
ON WRIT OF CERTIORARI TO THE SUPREME COURT OF ALASKA
[June 15, 2009]
CHIEF JUSTICE ROBERTS, with whom JUSTICE THOMAS
joins, concurring in part and concurring in the judgment.
I agree with the Court’s conclusion that the Valdez tax
is unconstitutional “[b]ecause the imposition of the tax
depends on a factor related to tonnage and that tonnage
based tax is not for services provided to the vessel.” Ante,
at 7. The plurality goes on, however, to reject the city’s
argument that the tax may be sustained as a property tax
similar to ones the city imposes on other property. The
plurality rejects that argument on the ground that the city
in fact does not impose similar taxes on other property.
Ante, at 8–13. I would instead reject the argument on the
ground that it does not matter.
The Tonnage Clause applies to “any Duty of Tonnage,”
regardless of how that duty compares to other commercial
taxes. U. S. Const., Art. I, §10, cl. 3. The free flow of
maritime commerce was so important to the Framers that
they grouped the prohibition on tonnage duties with bans
on keeping troops or ships of war, entering into compacts
with other States or foreign powers, and engaging in war.
Ibid. In light of the Framers’ goal to promote trade, and
the language of the Clause, I do not see how an unconsti
tutional tax on maritime commerce becomes permissible
when bundled with taxes on other activities or property.
If States wish to use their geographical position to tax
national maritime commerce, they must get Congress’s
2 POLAR TANKERS, INC. v. CITY OF VALDEZ
Opinion of ROBERTS, C. J.
consent—just as they must to engage in the other activi
ties prohibited by Clause 3.
The majority responds that nothing in the history of the
Clause, its purpose, or this Court’s interpretation of it
suggests that it bans all taxes on vessels using a port.
Ante, at 5. The majority’s list of interpretive tools tellingly
leaves out one—the words the Framers used. The Clause
by its terms provides that “No State shall, without the
Consent of Congress, lay any Duty of Tonnage.” U. S.
Const., Art. I., §10, cl. 3 (emphasis added). The majority
correctly concludes that the Valdez tax is a tonnage duty,
ante, at 7, and that should be the end of the matter.
The majority also objects that this approach would give
vessels “preferential treatment,” when the Clause only
protects vessels from discrimination. Ante, at 6. But the
Clause says nothing about discrimination, and it should
hardly come as a surprise that a constitutional ban on
tonnage duties would give preferential treatment to ves
sels. Such protection reflects the high value the Framers
placed on the free flow of maritime commerce. See State
Tonnage Tax Cases, 12 Wall. 204, 214 (1871) (“Prior to the
adoption of the Constitution the States . . . levied duties on
imports and exports and duties of tonnage, and it was the
embarrassments growing out of such regulations and
conflicting obligations which mainly led to the abandon
ment of the Confederation and to the more perfect union
under the present Constitution”).
The plurality appears to be driven to its tax-comparison
analysis only in responding to the city’s contention that
the tax is exempt from the Tonnage Clause under the
State Tonnage Tax Cases, supra, and Transportation Co. v.
Wheeling, 99 U.S. 273 (1879). Neither of those cases has
any bearing here. Both cases make clear that they apply
only to taxation of property owned by citizens of the State.
See State Tonnage Tax Cases, supra, at 213 (referring to
“[t]axes levied by a State upon ships and vessels owned by the
Cite as: 557 U. S. ____ (2009) 3
Opinion of ROBERTS, C. J.
citizens of the State” (emphasis added)); Wheeling, supra, at
284 (“Property . . . when belonging to a citizen of the State
living within her territory . . . is the subject of State taxa
tion” (emphasis added)). We have never held that the
Tonnage Clause allows such property taxes to be imposed
on visiting ships. Doing so would allow easy evasion of the
important principles of the Clause.
Both the plurality and JUSTICE STEVENS suggest that
the evolution of the “home port doctrine” sheds light on
how to read the Tonnage Clause. See ante, at 12–13; post,
at 3, n. 1 (dissenting opinion). I disagree. Under the home
port doctrine, Polar Tankers “could not be taxed in [Val
dez] at all,” even if the tax were not a tonnage duty. Ja
pan Line, Ltd. v. County of Los Angeles, 441 U.S. 434, 442
(1979); Hays v. Pacific Mail S. S. Co., 17 How. 596, 599
(1855). In contrast, the Tonnage Clause forbids only
tonnage duties, and would permit Valdez to impose other
taxes on visiting ships—for example, “a reasonable charge
for” the service of “policing of a harbor.” Clyde Mallory
Lines v. Alabama ex rel. State Docks Comm’n, 296 U.S.
261, 267, 266 (1935). The demise of the home port doc
trine is in no way inconsistent with reading the Tonnage
Clause, as written, to ban all tonnage duties. See Japan
Line, supra, at 439, n. 3 (rejecting home port doctrine
while expressly not reaching Tonnage Clause argument).
In any case, because the Court has determined that
Valdez’s tax is unlike other municipal taxes, it does not
decide whether a tonnage duty would be unconstitutional
when other similar property is taxed. See ante, at 13;
post, at 1 (ALITO, J., concurring in part and concurring in
the judgment). Whatever other taxes the city might im
pose, this tax “operate[s] to impose a charge for the privi
lege of entering . . . or lying in” the port of Valdez, and is a
duty of tonnage for that reason. Clyde Mallory, supra, at
265–266. I therefore concur in the judgment.
Cite as: 557 U. S. ____ (2009) 1
Opinion of ALITO, J.
SUPREME COURT OF THE UNITED STATES
_________________
No. 08–310
_________________
POLAR TANKERS, INC., PETITIONER v. CITY OF
VALDEZ, ALASKA
ON WRIT OF CERTIORARI TO THE SUPREME COURT OF ALASKA
[June 15, 2009]
JUSTICE ALITO, concurring in part and concurring in the
judgment.
I join the opinion of the Court, except for Part II–B–2,
which might be read to suggest that the tax at issue here
would be permitted under the Tonnage Clause if the tax
were a property tax levied in the same manner on other
personal property within the jurisdiction. It is sufficient
for present purposes that the Valdez tax is not such a
personal property tax and therefore, even if the Tonnage
Clause permits a true, evenhanded property tax to be
applied to vessels, the Valdez tax is an unconstitutional
duty of tonnage.
Cite as: 557 U. S. ____ (2009) 1
STEVENS, J., dissenting
SUPREME COURT OF THE UNITED STATES
_________________
No. 08–310
_________________
POLAR TANKERS, INC., PETITIONER v. CITY OF
VALDEZ, ALASKA
ON WRIT OF CERTIORARI TO THE SUPREME COURT OF ALASKA
[June 15, 2009]
JUSTICE STEVENS, with whom JUSTICE SOUTER joins,
dissenting.
The Tonnage Clause prohibits the States and their
political subdivisions from charging ships for the privilege
of using their ports. Because this case does not involve
such a charge, I respectfully dissent.
I
The Tonnage Clause commands that “No State shall,
without the Consent of Congress, lay any Duty of Ton
nage.” U. S. Const., Art. I, §10, cl. 3. As the Court asserts,
the purpose of the Clause is to prevent States with conven
ient ports from abusing the privileges their natural posi
tion affords. See ante, at 3–4. Thus, the pertinent inquiry
in determining whether an exaction violates the Clause’s
prohibitions is whether the charge is “ ‘in its essence a
contribution claimed for the privilege of arriving and
departing from a port.’ ” Transportation Co. v. Wheeling,
99 U.S. 273, 283–284 (1879) (quoting Cannon v. New
Orleans, 20 Wall. 577, 581 (1874)); see Clyde Mallory
Lines v. Alabama ex rel. State Docks Comm’n, 296 U.S.
261, 265–266 (1935). In applying that principle, we have
been cognizant of its limits.
By its terms, the Tonnage Clause prohibits States from
imposing a duty on ships based on their internal cubic
capacity, see id., at 265, and it similarly prohibits charges
2 POLAR TANKERS, INC. v. CITY OF VALDEZ
STEVENS, J., dissenting
that “effect the same purpose” as a duty of tonnage—for
instance, by imposing a duty based “on the number of
masts, or of mariners, the size and power of the steam
engine, or the number of passengers which she carries,”
Passenger Cases, 7 How. 283, 458–459 (1849) (opinion of
Grier, J.). By contrast, charges levied for other purposes
are outside the Clause’s reach. This Court has often ap
proved charges for services rendered to ships to ensure
their safe and convenient use of a port. See Clyde Mallory,
296 U. S., at 266–267. And the federal interest in protect
ing access to the ports generally does not prevent States
from charging shipowners those taxes and fees that the
States are also authorized to levy on other property. See
Wiggins Ferry Co. v. East St. Louis, 107 U.S. 365, 375,
376 (1883) (upholding a “license tax” “laid upon the busi
ness of keeping a ferry”); Wheeling, 99 U. S., at 279 (up
holding a property tax on ships).
More than a century ago, we noted that it was “too well
settled to admit of question that taxes levied by a State,
upon ships or vessels owned by the citizens of the State, as
property, based on a valuation of the same as property, to
the extent of such ownership, are not within the prohibi
tion of the Constitution.” Ibid. Just as “[d]raymen may be
compelled to pay a license tax on every dray owned by
them, hackmen on every hack, [and] tavernkeepers on
their taverns in proportion to the number of the rooms
which they keep for the accommodation of guests,” so too
can a State charge the operator of a ferry a “tax upon the
boats which he employs.” Wiggins Ferry, 107 U. S., at 375.
“[V]essels of all kinds are liable to taxation as property in
the same manner as other personal property owned by
citizens of the State.” Wheeling, 99 U. S., at 284; State
Tonnage Tax Cases, 12 Wall. 204, 212–213 (1871).
From Wheeling and the State Tonnage Tax Cases, two
principles emerge regarding the circumstances under
which States may levy property taxes on ships. First, the
Cite as: 557 U. S. ____ (2009) 3
STEVENS, J., dissenting
State seeking to levy the tax must show that the ship has
sufficient contacts with the jurisdiction to establish a tax
situs there. In our earlier cases, the existence of the situs
was determined by the citizenship of the ship’s owner, see
Wheeling, 99 U. S., at 279; State Tonnage Tax Cases, 12
Wall., at 213, but a tax situs can also be created by a
property’s substantial contacts with a jurisdiction.1 The
requirement of a tax situs serves to distinguish property
taxes from fees charged for the privilege of entering a port,
which the Court has consistently found to violate the
prohibition against duties of tonnage. See, e.g., Cannon,
20 Wall., at 581 (holding unconstitutional “a tax upon
every vessel which stops” in the city’s jurisdictional wa
ters); Steamship Co. v. Portwardens, 6 Wall. 31, 33 (1867)
(invalidating a tax imposed “upon every ship entering the
port” and “collected upon every entry”).
Our cases also require that property taxes on ships, as
with other property, be calculated based on the ship’s
——————
1 Previously, courts followed the common-law “home port” doctrine,
pursuant to which a ship could be taxed only by the State in which its
owner was domiciled. See Pullman’s Palace Car Co. v. Pennsylvania,
141 U.S. 18, 23–24 (1891). That doctrine has since “yielded to a rule of
fair apportionment among the States,” permitting any jurisdiction with
which a ship has had sufficient contacts to establish a tax situs to levy
a property tax on the ship in proportion to the ship’s contacts with the
jurisdiction. See Japan Line, Ltd. v. County of Los Angeles, 441 U.S.
434, 442–443 (1979); see also Standard Oil Co. v. Peck, 342 U.S. 382,
383 (1952). We have roundly rejected the doctrine in cases involving
ships moving in interstate operations along the inland waters. See
ibid. And in the context of ocean-going ships, we have referred to the
doctrine as “ ‘anachronistic’ ” and all but “ ‘abandoned,’ ” noting that “to
rehabilitate the ‘home port doctrine’ as a tool of Commerce Clause
analysis would be somewhat odd.” Japan Line, 441 U. S., at 443. In
light of these developments, it is odd indeed that THE CHIEF JUSTICE
endeavors to distinguish Transportation Co. v. Wheeling, 99 U.S. 273(1879), and the State Tonnage Tax Cases, 12 Wall. 204 (1871), as
“apply[ing] only to taxation of property owned by citizens of the State.”
See ante, at 2 (opinion concurring in part and concurring in judgment).
4 POLAR TANKERS, INC. v. CITY OF VALDEZ
STEVENS, J., dissenting
value. When a State levies a property tax on ships, the
prohibition of the Tonnage Clause comes into play only if
the ships are “not taxed in the same manner as the other
property of the citizens, or where the tax is imposed upon
the vessel as an instrument of commerce, without refer
ence to the value as property.” Wheeling, 99 U. S., at 284.
Although the meaning of Wheeling’s “same manner” lan
guage is not immediately apparent, the remainder of the
opinion emphasizes the importance of the method by
which the tax on the petitioner’s ships was calculated—
i.e., “based on a valuation of the same as property”—
rather than the city’s taxation of other property in the
jurisdiction. Id., at 279; see id., at 284.
Our decision in the State Tonnage Tax Cases is to the
same effect, as we held that taxes levied on ships “as
property, based on a valuation of the same as property, are
not within the prohibition of the Constitution,” but if
States tax ships “by a tonnage duty, or indirectly by im
posing the tax upon the master or crew, they assume a
jurisdiction which they do not possess.” 12 Wall., at 213,
214 (emphasis in original). Indeed, each of the taxes
challenged in that case was invalidated because it was
“levied on the steamboats wholly irrespective of the value
of the vessels as property, and solely and exclusively on
the basis of their cubical contents.” Id., at 217; see id., at
224 (holding the tax unconstitutional because “the amount
of the tax depends upon the carrying capacity of the
steamboat and not upon her value as property”).2 Thus, in
——————
2 The
Court seems to conflate these methods of calculating taxes on
ships, as it asserts that “a tax on the value of such vessels is closely
correlated with cargo capacity” and concludes that the tax in this case
“depends on a factor related to tonnage.” Ante, at 7; see also ante, at 1
(opinion of ROBERTS, C. J.). This is contrary to our longstanding recog
nition that a ship’s capacity is not a proxy for its value: “[T]he experi
ence of every one shows that a small steamer, new and well built, may
be of much greater value than a large one, badly built or in need of
Cite as: 557 U. S. ____ (2009) 5
STEVENS, J., dissenting
both Wheeling and the State Tonnage Tax Cases, the
method by which the challenged tax was calculated was
essential to the Court’s determination of its validity.
The tax in this case has both of the critical characteris
tics of a legitimate property tax. It is undisputed that
petitioner’s ships “are taxed based on their value, and only
those [ships] that have acquired a taxable situs in Valdez
are taxed.” 182 P.3d 614, 622 (Alaska 2008). Accord
ingly, I would uphold the Alaska Supreme Court’s decision
sustaining the tax against petitioner’s Tonnage Clause
challenge.
The plurality reaches the opposite conclusion because it
reads Wheeling’s “same manner” language to impose a
different limitation on the States’ power to tax ships.
According to the plurality, “in order to fund services by
taxing ships, a State must also impose similar taxes upon
other businesses.” Ante, at 9. As discussed above, Wheel
ing and the State Tonnage Cases are better read to require
that property taxes on ships be assessed based on the
value of the ship rather than its tonnage. But even if the
“same manner” requirement did not clearly refer to the
method of calculating the tax, the phrase could not bear
the weight the plurality places on it. And there is no other
support in our cases or in the text of the Tonnage Clause
for a rule that conditions a State’s exercise of its admitted
authority to levy property taxes on ships upon its decision
also to tax other property within its jurisdiction.
Under the plurality’s reading, the same tax could be a
“Duty of Tonnage” in one instance and not in another
depending on taxing decisions wholly outside the Clause’s
reach. Far from being compelled by our earlier cases, this
rule is in tension with our decisions noting the substantial
flexibility States must be afforded in making taxing deci
sions and cautioning courts not to “subject the essential
——————
extensive repairs.” State Tonnage Tax Cases, 12 Wall., at 224.
6 POLAR TANKERS, INC. v. CITY OF VALDEZ
STEVENS, J., dissenting
taxing power of the State to an intolerable supervision.”
Ohio Oil Co. v. Conway, 281 U.S. 146, 159 (1930). That
tension is compounded by the inevitable difficulty States
will have in navigating the new rule, as the plurality does
not suggest at what point a State can be satisfied that it
has taxed enough other property that it may also tax ships
without violating the Clause’s prohibitions.
In support of its understanding of the “same manner”
requirement, the plurality asserts that the rule “helps to
assure that a value-related property tax differs signifi
cantly from a graduated tax on a ship’s capacity and that
the former is not simply a redesignation of the latter.”
Ante, at 9. But our cases provide such assurance without
resort to the plurality’s strained reading. Because States
and their political subdivisions only have authority to tax
property that has established a tax situs in the jurisdic
tion, they cannot levy such taxes on ships merely for the
privilege of entering or leaving the port; much more sub
stantial contact with the jurisdiction is required. See
Valdez Municipal Code §3.12.020(C) (2008); Central R. Co.
of Pa. v. Pennsylvania, 370 U.S. 607, 614–615 (1962).
And it is that contact, rather than entry into the port, that
provides the basis for taxing the ships. The tax situs
requirement thus ensures that a State cannot avoid the
proscriptions of the Tonnage Clause by redesignating a
duty charged for the privilege of entering the port as an
ad valorem tax.
The facts of this case illustrate the point. Most of peti
tioner’s ships spend 40-to-50 days per year in the Port of
Valdez. See App. 32–45. “[A]s a group the tankers form a
continuous presence in the city.” 182 P. 3d, at 623. The
ships’ prolonged physical presence and extensive commer
cial activities in the city have a substantial impact on the
city’s resources. On average, the ships’ presence adds 550
people to the population of Valdez, increasing the city’s
total population by 10%. Those people, as well as the
Cite as: 557 U. S. ____ (2009) 7
STEVENS, J., dissenting
ships themselves, require numerous public services, in
cluding harbor facilities, roads, bridges, water supply, and
fire and police protection. Ibid. As the Alaska Supreme
Court concluded, the challenged tax is therefore a legiti
mate property tax levied to support the ships’ use of the
city’s services. See ibid.
II
Even if the Tonnage Clause were properly understood to
permit a jurisdiction to levy a tax on ships only when
other property in the jurisdiction is also taxed, I would
uphold the challenged tax. Although the tax applies only
to ships, see Valdez Municipal Code §3.12.020, other
property in the city is also subject to taxation.
First, §3.12.022 imposes a value-based property tax on
trailers, mobile homes, and recreational vehicles that are
affixed to a site and connected to utilities. The plurality
makes much of the requirement that the property be
“ ‘affixed’ ” to a particular site, concluding that “Valdez in
fact taxes those vehicles only when they constitute a form,
not of personal property, but of real property.” Ante, at 10.
But the taxability of property pursuant to §3.12.022 is
determined in much the same way as the taxability of
ships. “A trailer or mobile home is conclusively presumed
to be affixed to the land” and may therefore be taxed if “it
has remained at a fixed site for more than ninety days.”
§3.12.022(C). Similarly, a ship owner can establish a tax
situs in Valdez and thus be subject to taxation if it is “kept
or used within the city for any ninety days or more.”
§3.12.020(C)(2)(c).3 In both cases, the provision serves to
impose a tax on property that has developed substantial
contacts with the city. The plurality is thus wrong to
——————
3A ship can also establish a tax situs in Valdez if it is usually kept or
used within the city, travels to or within the city along regular routes,
or is necessary to the conduct of substantial business in the city.
§3.12.020(C)(2).
8 POLAR TANKERS, INC. v. CITY OF VALDEZ
STEVENS, J., dissenting
conclude that ships have been singled out for taxation.
Valdez also “levie[s] a tax” on all property taxable under
Alaska Statutes Chapter 43.56 at the same rate that
applies to other property taxed by the city. Valdez Mu
nicipal Code §3.28.010.4 The tax is imposed on property
used “primarily in the exploration for, production of, or
pipeline transportation of gas or unrefined oil,” including
machinery, equipment, pumping stations, powerplants,
aircraft and motor vehicles, and docks and other port
facilities. See Alaska Stat. §§43.56.010, 43.56.210(5)(A)
(2008). For several reasons, this tax is more significant
than the plurality acknowledges. First, contrary to the
plurality’s view, the tax appears to be a municipal tax.
Valdez Municipal Code §3.28.010 states that the tax “is
hereby levied” on “property taxable under Alaska Statutes
Chapter 43.56,” which in turn states that “[a] municipality
may levy” such taxes, §43.56.010(b). The terms of these
provisions indicate that the city has exercised its express
authority to levy such taxes. Given the myriad types of
property taxable under those provisions and the require
ment of Valdez Municipal Code §3.28.010 that the prop
erty be taxed “at the rate of taxation that applies to other
property taxed by the city,” it seems clear that petitioner’s
ships are taxed in the “same manner” as other property
even as the plurality uses that term.
My view of the case would be the same even if the tax on
property used in oil production were imposed by the State
itself, as the plurality assumes. Whether the oil
production tax and the challenged tax are levied by the
same unit of government has no relevance to the question
whether the latter violates the Constitution. The restric
tion imposed by the Tonnage Clause is a command to the
——————
4 As the plurality notes, ante, at 10–11, Valdez did not raise this issue
in state court, and the parties have provided only limited briefing on
the issue.
Cite as: 557 U. S. ____ (2009) 9
STEVENS, J., dissenting
States limiting their inherent taxing authority as sover
eigns. The States’ political subdivisions have no such
inherent power and can levy taxes only to the extent
authorized by the State. See 16 E. McQuillin, Law of
Municipal Corporations §44.05, pp. 19–24 (rev. 3d ed.
2003); see also Wiggins Ferry, 107 U. S., at 375 (noting
“[t]he power of [a State] to authorize any city within her
limits to impose a license tax” on ferries). Indeed, this
aspect of the relationship between States and their politi
cal subdivisions is reflected in Alaska Stat. §43.56.010(b),
which authorizes municipalities to levy certain taxes and
prevents them from exempting particular property from
taxation. Because the city’s power to levy taxes derives
from the State, whether the city or the State levies the tax
on oil-production property is constitutionally irrelevant.
Finally, it bears mention that the result in this particu
lar case does nothing to further the interests the Tonnage
Clause was intended to protect. As the Court acknowl
edges, ante, at 4, the central purpose of the Clause is “to
prevent the seaboard States, possessed of important ports
of entry, from levying taxes on goods flowing through their
ports to inland States,” Youngstown Sheet & Tube Co. v.
Bowers, 358 U.S. 534, 556 (1959) (Frankfurter, J., dis
senting in part). Port Valdez is at the southern terminus
of the Trans Alaska Pipeline System, which carries oil
extracted from Alaska’s North Slope to Port Valdez where
it is loaded onto oil tankers belonging to petitioner and
others for transport to refineries in other States. Taxes
imposed on ships exporting that oil have the same effect
on commerce in oil as do taxes on oil-production property
or the oil itself, and Alaska’s authority to impose taxes on
oil and oil-production property is undisputed. From an
economic or political point of view, there is no difference
between Alaska’s geographical control over the area in
which the oil is produced and the port from which it is
exported. Accordingly, no federal interest is served by
10 POLAR TANKERS, INC. v. CITY OF VALDEZ
STEVENS, J., dissenting
prohibiting Alaska or its political subdivisions from taxing
the oil-bearing ships that are continually present in the
State’s ports.
III
The Tonnage Clause permits a State to levy a property
tax on ships whether or not it taxes other property. Were
that not the case, the challenged tax would still be permis
sible because Valdez also taxes mobile homes, trailers, and
a wide variety of property used in producing oil. Because
the tax in my view does not run afoul of the prohibitions of
the Tonnage Clause, I respectfully dissent.