Preventing Economic Balkanization & Discrimination: Negative Commerce Clause, Study Guides, Projects, Research of Law

Download Preventing Economic Balkanization & Discrimination: Negative Commerce Clause and more Study Guides, Projects, Research Law in PDF only on Docsity! 520US2 Unit: $U54 [09-10-99 19:36:34] PAGES PGT: OPIN 564 OCTOBER TERM, 1996 Syllabus CAMPS NEWFOUND/OWATONNA, INC. v. TOWN OF HARRISON et al. certiorari to the supreme judicial court of maine No. 94–1988. Argued October 9, 1996—Decided May 19, 1997 Petitioner, a Maine nonprofit corporation, operates a church camp for chil- dren, most of whom are not Maine residents. Petitioner is financed through camper tuition and other revenues. From 1989 to 1991, it paid over $20,000 per year in real estate and personal property taxes. A state statute provides a general exemption from those taxes for chari- table institutions incorporated in Maine. With respect to institutions operated principally for the benefit of Maine nonresidents, however, a charity may only qualify for a more limited tax benefit, and then only if its weekly charge for services does not exceed $30 per person. Petitioner was ineligible for any exemption, because its campers were largely nonresidents and its weekly tuition was roughly $400 per camper. After respondent town of Harrison (Town) rejected its re- quest for a refund of taxes already paid and a continuing exemption from future taxes, which was based principally on a claim that the tax exemption statute violated the Commerce Clause, petitioner filed suit and was awarded summary judgment by the Superior Court. The Maine Supreme Judicial Court reversed, holding that petitioner had not met its burden of persuasion that the statute is unconstitutional. Held: An otherwise generally applicable state property tax violates the Commerce Clause if its exemption for property owned by charitable institutions excludes organizations operated principally for the benefit of nonresidents. Pp. 571–595. (a) Because the Government lacked power to regulate interstate com- merce during the Nation’s first years, the States freely adopted meas- ures fostering local interests without regard to possible prejudice to nonresidents, resulting in a “conflict of commercial regulations, destruc- tive to the harmony of the States.” Gibbons v. Ogden, 9 Wheat. 1, 224 (Johnson, J., concurring in judgment). Arguably, this was the cause of the Constitutional Convention. Ibid. The Commerce Clause not only granted Congress express authority to override restrictive and conflict- ing state commercial regulations, but also effected a curtailment of state power even absent congressional legislation. Pp. 571–572. (b) The Court is unpersuaded by the Town’s arguments that the dor- mant Commerce Clause is inapplicable here, either because campers are 520US2 Unit: $U54 [09-10-99 19:36:34] PAGES PGT: OPIN 565Cite as: 520 U. S. 564 (1997) Syllabus not “articles of commerce,” or more generally because interstate com- merce is not implicated. The camp is unquestionably engaged in com- merce, not only as a purchaser, see, e. g., Katzenbach v. McClung, 379 U. S. 294, 300–301, but also as a provider of goods and services akin to a hotel, see, e. g., Heart of Atlanta Motel, Inc. v. United States, 379 U. S. 241, 244, 258. Although the latter case involved Congress’ affirmative powers, its reasoning is applicable in the dormant Commerce Clause context. See, e. g., Hughes v. Oklahoma, 441 U. S. 322, 326, n. 2. The Town’s further argument that the dormant Clause is inapplicable be- cause a real estate tax is at issue is also rejected. Even assuming, as the Town argues, that Congress could not impose a national real estate tax, States are not free to levy such taxes in a manner that discriminates against interstate commerce. Pennsylvania v. West Virginia, 262 U. S. 553, 596. Pp. 572–575. (c) There is no question that if this statute targeted profit-making entities, it would violate the dormant Commerce Clause. The statute discriminates on its face against interstate commerce: It expressly dis- tinguishes between entities that serve a principally interstate clientele and those that primarily serve an intrastate market, singling out camps that serve mostly in-staters for beneficial tax treatment, and penalizing those camps that do a principally interstate business. Such laws are virtually per se invalid. E. g., Fulton Corp. v. Faulkner, 516 U. S. 325, 331. Because the Town did not attempt to defend the statute by dem- onstrating that it advances a legitimate local purpose that cannot be adequately served by reasonable nondiscriminatory alternatives, e. g., Oregon Waste Systems, Inc. v. Department of Environmental Quality of Ore., 511 U. S. 93, 101, the Court does not address this question. See Fulton Corp., 516 U. S., at 333–334. Pp. 575–583. (d) The rule applicable to profit-making enterprises also applies to a discriminatory tax exemption for charitable and benevolent institu- tions. The dormant Commerce Clause’s applicability to the nonprofit sector follows from this Court’s decisions holding not-for-profit insti- tutions subject to laws regulating commerce, e. g., Associated Press v. NLRB, 301 U. S. 103, 129, and to the federal antitrust laws, e. g., Na- tional Collegiate Athletic Assn. v. Board of Regents of Univ. of Okla., 468 U. S. 85, 100, n. 22. The Court has already held that the dormant Clause applies to activities not intended to earn a profit, Edwards v. California, 314 U. S. 160, 172, n. 1, and there is no reason why an enter- prise’s nonprofit character should exclude it from the coverage of either the affirmative or the negative aspect of the Clause, see, e. g., Hughes v. Oklahoma, 441 U. S., at 326, n. 2. Whether operated on a for-profit or 520US2 Unit: $U54 [09-10-99 19:36:34] PAGES PGT: OPIN 568 CAMPS NEWFOUND/OWATONNA, INC. v. TOWN OF HARRISON Opinion of the Court The Maine statute at issue, Me. Rev. Stat. Ann., Tit. 36, § 652(1)(A) (Supp. 1996), provides a general exemption from real estate and personal property taxes for “benevolent and charitable institutions incorporated” in the State. With respect to institutions that are “in fact conducted or oper- ated principally for the benefit of persons who are not resi- dents of Maine,” however, a charity may only qualify for a more limited tax benefit, and then only if the weekly charge for services provided does not exceed $30 per person. § 652(1)(A)(1).2 Because most of the campers come from out 2 The statute provides: “The following property of institutions and organizations is exempt from taxation: “1. Property of institutions and organizations. “A. The real estate and personal property owned and occupied or used solely for their own purposes by benevolent and charitable institutions incorporated by this State, and none of these may be deprived of the right of exemption by reason of the source from which its funds are derived or by reason of limitation in the classes of persons for whose benefit such funds are applied. “(1) Any such institution that is in fact conducted or operated princi- pally for the benefit of persons who are not residents of Maine is entitled to an exemption not to exceed $50,000 of current just value only when the total amount of any stipends or charges that it makes or takes during any tax year, as defined by section 502, for its services, benefits or advantages divided by the total number of persons receiving such services, benefits or advantages during the same tax year does not result in an average rate in excess of $30 per week when said weekly rate is computed by dividing the average yearly charge per person by the total number of weeks in a tax year during which such institution is in fact conducted or operated principally for the benefit of persons who are not residents of Maine. No such institution that is in fact conducted or operated principally for the benefit of persons who are not residents of Maine and makes charges that result in an average weekly rate per person, as computed under this sub- paragraph, in excess of $30 may be entitled to tax exemption. This sub- paragraph does not apply to institutions incorporated as nonprofit corpora- tions for the sole purpose of conducting medical research. “For the purposes of this paragraph, ‘benevolent and charitable institu- tions’ include, but are not limited to, nonprofit nursing homes and nonprofit 520US2 Unit: $U54 [09-10-99 19:36:34] PAGES PGT: OPIN 569Cite as: 520 U. S. 564 (1997) Opinion of the Court of State, petitioner could not qualify for a complete exemp- tion.3 And, since the weekly tuition was roughly $400, peti- tioner was ineligible for any charitable tax exemption at all. In 1992 petitioner made a formal request to the Town for a refund of taxes paid from 1989 through 1991, and a continu- ing exemption from future property taxes, based principally on a claim that the tax exemption statute violated the Com- merce Clause of the Federal Constitution.4 The request was denied, and petitioner filed suit in the Superior Court against the Town and its tax assessors and collectors.5 After the boarding homes and boarding care facilities licensed by the Department of Human Services pursuant to Title 22, chapter 1665 or its successor, nonprofit community mental health service facilities licensed by the Com- missioner of Mental Health, Mental Retardation, and Substance Abuse Services, pursuant to Title 34–B, chapter 3 and nonprofit child care centers incorporated by this State as benevolent and charitable institutions. For the purposes of this paragraph, ‘nonprofit’ means a facility exempt from taxation under Section 501(c)(3) of the Code . . . .” Me. Rev. Stat. Ann., Tit. 36, § 652(1)(A) (Supp. 1996). 3 The statute’s language reserving the property tax exemption for those entities operated “principally for the benefit” of Maine residents is not without ambiguity. The parties are in agreement, however, that because petitioner’s camp is attended almost entirely by out-of-staters, it would not qualify for the exemption under any reading of the language. See Brief for Petitioner 2; Brief for Respondents 2, n. 3; Tr. of Oral Arg. 36. The courts below appear to have presumed the same, and we of course accept their interpretation of state law. 4 Petitioner also argued below that the Maine statute violated the Equal Protection Clauses of the United States and Maine Constitutions, and the Privileges and Immunities Clause, Art. IV, § 2, of the Federal Constitution. The Maine Supreme Judicial Court had already found the statute constitu- tional under an equal protection analysis in a prior decision, and adhered to its earlier view. See Green Acre Baha’i Institute v. Eliot, 159 Me. 395, 193 A. 2d 564 (1963); 655 A. 2d 876, 879–880 (1995). As for the privileges and immunities claim, the Supreme Judicial Court found petitioner’s argu- ment unavailing. Id., at 880. These claims are not before us. 5 The Superior Court referred to all of the original defendants as “Mu- nicipal Defendants” because the State of Maine intervened to defend the constitutionality of its statute. App. to Pet. for Cert. 9a. However, the 520US2 Unit: $U54 [09-10-99 19:36:34] PAGES PGT: OPIN 570 CAMPS NEWFOUND/OWATONNA, INC. v. TOWN OF HARRISON Opinion of the Court parties agreed on the relevant facts, they filed cross-motions for summary judgment. The Superior Court ruled for peti- tioner, explaining that under Maine’s statute: “Denial of a tax exemption is explicitly and primarily triggered by engaging in a certain level of interstate commerce. This denial makes operation of the institu- tions serving non-residents more expensive. This in- creased cost results from an impermissible distinc- tion between in-state and out-of-state consumers. See Commonwealth Edison Co., 453 U. S., at 617–19. . . . Maine’s charitable tax exemption is denied, not because there is a difference between the activities of charitable institutions serving residents and non-residents, but be- cause of the residency of the people whom the institu- tions serve.” App. to Pet. for Cert. 14a–15a (footnote omitted). The Town, but not the State, appealed and the Maine Su- preme Judicial Court reversed. 655 A. 2d 876 (1995). Not- ing that a Maine statute 6 characterized tax exemptions as “tax expenditures,” it viewed the exemption for charitable institutions as the equivalent of a purchase of their services. Id., at 878. Because the exemption statute “treats all Maine charities alike”—given the fact that “all have the opportu- nity to qualify for an exemption by choosing to dispense the majority of their charity locally”—it “regulates evenhand- edly with only incidental effects on interstate commerce.” Id., at 879. In the absence of evidence that petitioner’s camp “competes with other summer camps outside of or within Maine,” or that the statute “impedes interstate travel” or that it “provides services that are necessary for interstate travel,” the Court concluded that petitioner had State did not appeal the adverse decision of the Superior Court and, there- fore, is not a respondent in this Court. We shall use the term “Town” to refer to the respondents collectively. 6 Me. Rev. Stat. Ann., Tit. 36, § 196 (1990). 520US2 Unit: $U54 [09-10-99 19:36:34] PAGES PGT: OPIN 573Cite as: 520 U. S. 564 (1997) Opinion of the Court 17–18. Even though petitioner’s camp does not make a profit, it is unquestionably engaged in commerce, not only as a purchaser, see Katzenbach v. McClung, 379 U. S. 294, 300– 301 (1964); United States v. Lopez, 514 U. S. 549, 558 (1995), but also as a provider of goods and services. It markets those services, together with an opportunity to enjoy the natural beauty of an inland lake in Maine, to campers who are attracted to its facility from all parts of the Nation. The record reflects that petitioner “advertises for campers in [out-of-state] periodicals . . . and sends its Executive Direc- tor annually on camper recruiting trips across the country.” App. 49–50. Petitioner’s efforts are quite successful; 95 per- cent of its campers come from out of State. The attendance of these campers necessarily generates the transportation of persons across state lines that has long been recognized as a form of “commerce.” Edwards v. California, 314 U. S. 160, 172 (1941); see also Caminetti v. United States, 242 U. S. 470, 491 (1917); Hoke v. United States, 227 U. S. 308, 320 (1913). Summer camps are comparable to hotels that offer their guests goods and services that are consumed locally. In Heart of Atlanta Motel, Inc. v. United States, 379 U. S. 241 (1964), we recognized that interstate commerce is sub- stantially affected by the activities of a hotel that “solicits patronage from outside the State of Georgia through various national advertising media, including magazines of national circulation.” Id., at 243. In that case, we held that com- merce was substantially affected by private race discrimina- tion that limited access to the hotel and thereby impeded interstate commerce in the form of travel. Id., at 244, 258; see Lopez, 514 U. S., at 558–559. Official discrimination that limits the access of nonresidents to summer camps creates a similar impediment. Even when business activities are purely local, if “ ‘it is interstate commerce that feels the pinch, it does not matter how local the operation which ap- plies the squeeze.’ ” Heart of Atlanta, 379 U. S., at 258 520US2 Unit: $U54 [09-10-99 19:36:34] PAGES PGT: OPIN 574 CAMPS NEWFOUND/OWATONNA, INC. v. TOWN OF HARRISON Opinion of the Court (quoting United States v. Women’s Sportswear Mfrs. Assn., 336 U. S. 460, 464 (1949)). Although Heart of Atlanta involved Congress’ affirmative Commerce Clause powers, its reasoning is applicable here. As we stated in Hughes v. Oklahoma, 441 U. S. 322 (1979): “The definition of ‘commerce’ is the same when relied on to strike down or restrict state legislation as when relied on to support some exertion of federal control or regulation.” Id., at 326, n. 2. That case in turn rested upon our reasoning in Philadelphia v. New Jersey, 437 U. S. 617 (1978), in which we rejected a “two-tiered definition of commerce.” Id., at 622. “Just as Congress ha[d] power to regulate the inter- state movement of [the] wastes” at issue in that case, so too we held were States “not free from constitutional scrutiny when they restrict that movement.” Id., at 622–623. See also Sporhase v. Nebraska ex rel. Douglas, 458 U. S. 941, 953 (1982). The Town’s arguments that the dormant Commerce Clause is inapplicable to petitioner because the campers are not “ar- ticles of commerce,” or more generally that interstate com- merce is not at issue here, are therefore unpersuasive. The services that petitioner provides to its principally out-of- state campers clearly have a substantial effect on commerce, as do state restrictions on making those services available to nonresidents. Cf. C & A Carbone, Inc. v. Clarkstown, 511 U. S. 383, 391 (1994). The Town also argues that the dormant Commerce Clause is inapplicable because a real estate tax is at issue. We dis- agree. A tax on real estate, like any other tax, may imper- missibly burden interstate commerce. We may assume as the Town argues (though the question is not before us) that Congress could not impose a national real estate tax. It does not follow that the States may impose real estate taxes in a manner that discriminates against interstate commerce. A State’s “power to lay and collect taxes, comprehensive and necessary as that power is, cannot be exerted in a way which 520US2 Unit: $U54 [09-10-99 19:36:34] PAGES PGT: OPIN 575Cite as: 520 U. S. 564 (1997) Opinion of the Court involves a discrimination against [interstate] commerce.” Pennsylvania v. West Virginia, 262 U. S. 553, 596 (1923). To allow a State to avoid the strictures of the dormant Commerce Clause by the simple device of labeling its dis- criminatory tax a levy on real estate would destroy the bar- rier against protectionism that the Constitution provides. We noted in West Lynn Creamery, Inc. v. Healy, 512 U. S. 186 (1994), that “[t]he paradigmatic . . . law discriminating against interstate commerce is the protective [import] tariff or customs duty, which taxes goods imported from other States, but does not tax similar products produced in State.” Id., at 193. Such tariffs are “so patently unconstitutional that our cases reveal not a single attempt by a State to enact one.” Ibid. Yet, were the Town’s theory adopted, a State could create just such a tariff with ease. The State would need only to pass a statute imposing a special real estate tax on property used to store, process, or sell imported goods. By gearing the increased tax to the value of the imported goods at issue, the State could create the functional equiva- lent of an import tariff. As this example demonstrates, to accept the Town’s theory would have radical and unaccept- able results. We therefore turn to the question whether our prior cases preclude a State from imposing a higher tax on a camp that serves principally nonresidents than on one that limits its services primarily to residents. IV There is no question that were this statute targeted at profit-making entities, it would violate the dormant Com- merce Clause. “State laws discriminating against interstate commerce on their face are ‘virtually per se invalid.’ ” Ful- ton Corp. v. Faulkner, 516 U. S. 325, 331 (1996) (quoting Ore- gon Waste Systems, Inc. v. Department of Environmental Quality of Ore., 511 U. S. 93, 99 (1994)). It is not necessary to look beyond the text of this statute to determine that it 520US2 Unit: $U54 [09-10-99 19:36:34] PAGES PGT: OPIN 578 CAMPS NEWFOUND/OWATONNA, INC. v. TOWN OF HARRISON Opinion of the Court tages on local merchants; it may include attempts to give local consumers an advantage over consumers in other States.” 11 By encouraging economic isolationism, prohibi- tions on out-of-state access to in-state resources serve the very evil that the dormant Commerce Clause was designed to prevent. Of course, this case does not involve a total prohibition. Rather, the statute provides a strong incentive for affected entities not to do business with nonresidents if they are able to so avoid the discriminatory tax. In this way, the statute is similar to the North Carolina “intangibles tax” that we struck down in Fulton Corp. v. Faulkner, 516 U. S., at 327. That case involved the constitutionality under the Commerce Clause of a state “regime that taxe[d] stock [held by in-state shareholders] only to the degree that its issuing corporation participates in interstate commerce.” Id., at 333. We held the statute facially discriminatory, in part because it tended “to discourage domestic corporations from plying their trades in interstate commerce.” Ibid. Maine’s statute has a like effect. To the extent that affected Maine organizations are not deterred by the statute from doing a principally interstate business, it is clear that discriminatory burdens on interstate commerce imposed by regulation or taxation may also vio- late the Commerce Clause. We have held that special fees assessed on nonresidents directly by the State when they attempt to use local services impose an impermissible burden on interstate commerce. See, e. g., Chemical Waste Man- agement, Inc. v. Hunt, 504 U. S. 334, 342 (1992) (discrimina- tory tax imposed on disposal of out-of-state hazardous waste). That the tax discrimination comes in the form of a deprivation of a generally available tax benefit, rather than 11 The Town argues that “the Commerce Clause protects out-of-state competitors but does not protect out-of state consumers.” Brief for Re- spondents 16. As the discussion above indicates, our cases have rejected this view. 520US2 Unit: $U54 [09-10-99 19:36:34] PAGES PGT: OPIN 579Cite as: 520 U. S. 564 (1997) Opinion of the Court a specific penalty on the activity itself, is of no moment. Thus, in New Energy Co. of Ind. v. Limbach, 486 U. S. 269, 274 (1988), the Court invalidated an Ohio statute that pro- vided a tax credit for sales of ethanol produced in State, but not ethanol produced in certain other States; the law “de- prive[d] certain products of generally available beneficial tax treatment because they are made in certain other States, and thus on its face appear[ed] to violate the cardinal re- quirement of nondiscrimination.” 12 Given the fact that the burden of Maine’s facially discriminatory tax scheme falls by design in a predictably disproportionate way on out- of-staters,13 the pernicious effect on interstate commerce is 12 See Bacchus Imports, Ltd. v. Dias, 468 U. S. 263, 268 (1984) (discrimi- natory excise tax exemption); Maryland v. Louisiana, 451 U. S. 725, 756 (1981) (tax scheme “unquestionably discriminates against interstate com- merce . . . as the necessary result of various tax credits and exclusions”); Westinghouse Elec. Corp. v. Tully, 466 U. S. 388, 399–400, and n. 9 (1984) (per curiam); see also West Lynn Creamery, Inc. v. Healy, 512 U. S., at 210 (Scalia, J., concurring in judgment). 13 Because the Maine tax is facially discriminatory, this case is unlike Commonwealth Edison Co. v. Montana, 453 U. S. 609 (1981). There, we held permissible under the Commerce Clause a generally applicable Mon- tana severance tax on coal extracted from in-state mines. Appellants challenged the tax arguing, inter alia, that it discriminated against inter- state commerce because 90 percent of the coal happened to be shipped to out-of-state users, and the tax burden was therefore borne principally by nonresidents. We rejected this claim, noting that “there is no real dis- crimination in this case; the tax burden is borne according to the amount of coal consumed and not according to any distinction between in-state and out-of-state consumers.” Id., at 619. We recognized that an approach to the dormant Commerce Clause requiring an assessment of the likely de- mand for a particular good by nonresidents and a State’s ability to shift its tax burden out of State “would require complex factual inquiries about such issues as elasticity of demand for the product and alternative sources of supply,” id., at 619, n. 8, and declined to adopt such a difficult to police test. Here, in contrast, the tax scheme functions by design and on its face to burden out-of-state users disproportionately. Our analysis in Commonwealth Edison is therefore inapplicable. CTS Corp. v. Dynamics Corp. of America, 481 U. S. 69 (1987), is also inapposite. In that case, we rejected the argument that a facially nondis- 520US2 Unit: $U54 [09-10-99 19:36:34] PAGES PGT: OPIN 580 CAMPS NEWFOUND/OWATONNA, INC. v. TOWN OF HARRISON Opinion of the Court the same as in our cases involving taxes targeting out-of- staters alone. Unlike in Chemical Waste, we recognize that here the dis- criminatory burden is imposed on the out-of-state customer indirectly by means of a tax on the entity transacting busi- ness with the non-Maine customer. This distinction makes no analytic difference. As we noted in West Lynn Creamery discussing the general phenomenon of import tariffs: “For over 150 years, our cases have rightly concluded that the imposition of a differential burden on any part of the stream of commerce—from wholesaler to retailer to consumer—is invalid, because a burden placed at any point will result in a disadvantage to the out-of-state producer.” 512 U. S., at 202 (citing cases). So too here, it matters little that it is the camp that is taxed rather than the campers. The record demonstrates that the economic incidence of the tax falls at least in part on the campers, the Town has not contested the point, and the courts below based their decision on this presumption. App. 49; 655 A. 2d, at 879; App. to Pet. for Cert. 14a, n. 2.14 With respect to those businesses—like petitioner’s—that continue to engage in a primarily interstate trade, the Maine statute therefore functionally serves as an export tariff that targets out-of-state consumers by taxing the businesses that criminatory state law deterring hostile tender offers violated the dormant Commerce Clause because most such offers “are launched by offerors out- side Indiana.” Id., at 88. We explained that “nothing in the . . . Act imposes a greater burden on out-of-state offerors than it does on similarly situated Indiana offerors.” Ibid. (emphasis added). Here, the discrimi- nation appears on the face of the Maine statute. Exxon Corp. v. Governor of Maryland, 437 U. S. 117 (1978), is similarly distinguishable. See id., at 126 (“The fact that the burden of a state regulation falls on some inter- state companies does not, by itself, establish a claim of discrimination against interstate commerce”). 14 We therefore have no need to consider these matters further. Cf. Fulton Corp. v. Faulkner, 516 U. S. 325, 341 (1996) (noting “complexity of economic incidence analysis”). 520US2 Unit: $U54 [09-10-99 19:36:34] PAGES PGT: OPIN 583Cite as: 520 U. S. 564 (1997) Opinion of the Court a profit-making entity, the discriminatory tax exemption would be impermissible. V The unresolved question presented by this case is whether a different rule should apply to tax exemptions for charitable and benevolent institutions. Though we have never had cause to address the issue directly, the applicability of the dormant Commerce Clause to the nonprofit sector of the economy follows from our prior decisions. Our cases have frequently applied laws regulating com- merce to not-for-profit institutions. In Associated Press v. NLRB, 301 U. S. 103 (1937), for example, we held the Na- tional Labor Relations Act as applied to the Associated Press’ (A. P.’s) newsgathering activities to be an enactment entirely within Congress’ Commerce Clause power, despite the fact that the A. P. “does not sell news and does not oper- ate for a profit.” Id., at 129. Noting that the A. P.’s activi- ties “involve[d] the constant use of channels of interstate and foreign communication,” we concluded that its operations “amount[ed] to commercial intercourse, and such intercourse is commerce within the meaning of the Constitution.” Id., against interstate trade.’ ” Chemical Waste, 504 U. S., at 343, n. 5 (quot- ing Philadelphia v. New Jersey, 437 U. S., at 624 (emphasis added)). Be- cause the Maine statute is facially discriminatory, the more deferential standard is inapplicable. Contrary to Justice Scalia’s suggestion, this case is quite unlike General Motors Corp. v. Tracy, 519 U. S. 278 (1997). There, the Court premised its holding that the statute at issue was not facially discriminatory on the view that sellers of “bundled” and “unbun- dled” natural gas were principally competing in different markets. See id., at 297–298, 300 (“dormant Commerce Clause protects markets and par- ticipants in markets, not taxpayers as such”). While it may be true that “[d]isparate treatment constitutes discrimination only if the objects of the disparate treatment are . . . similarly situated,” post, at 601, there is no question that the statute at issue here is facially discriminatory because it disparately treats identically situated Maine nonprofit camps depending upon whether they favor in-state, as opposed to out-of-state, campers. 520US2 Unit: $U54 [09-10-99 19:36:34] PAGES PGT: OPIN 584 CAMPS NEWFOUND/OWATONNA, INC. v. TOWN OF HARRISON Opinion of the Court at 128. See also Polish National Alliance of United States v. NLRB, 322 U. S. 643 (1944). We have similarly held that federal antitrust laws are applicable to the anticompetitive activities of nonprofit orga- nizations. See National Collegiate Athletic Assn. v. Board of Regents of Univ. of Okla., 468 U. S. 85, 100, n. 22 (1984) (Sherman Act § 1 applies to nonprofits); American Soc. of Mechanical Engineers, Inc. v. Hydrolevel Corp., 456 U. S. 556, 576 (1982) (“[I]t is beyond debate that nonprofit organi- zations can be held liable under the antitrust laws”); Gold- farb v. Virginia State Bar, 421 U. S. 773 (1975). The non- profit character of an enterprise does not place it beyond the purview of federal laws regulating commerce. See also NLRB v. Yeshiva Univ., 444 U. S. 672, 681, n. 11 (1980) (not- ing that in context of amendments to National Labor Re- lations Act “Congress appears to have agreed that non- profit institutions ‘affect commerce’ under modern economic conditions”). We have already held that the dormant Commerce Clause is applicable to activities undertaken without the intention of earning a profit. In Edwards v. California, 314 U. S. 160 (1941), we addressed the constitutionality of a California statute prohibiting the transport into that State of indigent persons. We struck the statute down as a violation of the dormant Commerce Clause, reasoning that “the transpor- tation of persons is ‘commerce,’ ” and that the California statute was an “unconstitutional barrier to [that] interstate commerce.” Id., at 172–173. In determining whether the transportation of persons is “commerce,” we noted that “[i]t is immaterial whether or not the transportation is commer- cial in character.” Id., at 172, n. 1. We see no reason why the nonprofit character of an enter- prise should exclude it from the coverage of either the af- firmative or the negative aspect of the Commerce Clause. See Hughes, 441 U. S., at 326, n. 2; Philadelphia v. New Jer- sey, 437 U. S., at 621–623 (rejecting “two-tiered definition of commerce”); Sporhase, 458 U. S., at 953; see also supra, at 520US2 Unit: $U54 [09-10-99 19:36:34] PAGES PGT: OPIN 585Cite as: 520 U. S. 564 (1997) Opinion of the Court 572–574. There are a number of lines of commerce in which both for-profit and nonprofit entities participate. Some edu- cational institutions, some hospitals, some child care facilities, some research organizations, and some museums generate significant earnings; and some are operated by not-for-profit corporations. See Hansmann, The Role of Nonprofit Enter- prise, 89 Yale L. J. 835, 835, and n. 1, 865 (1980). A nonprofit entity is ordinarily understood to differ from a for-profit corporation principally because it “is barred from distributing its net earnings, if any, to individuals who exer- cise control over it, such as members, officers, directors, or trustees.” Id., at 838.17 Nothing intrinsic to the nature of nonprofit entities prevents them from engaging in interstate commerce. Summer camps may be operated as for-profit or nonprofit entities; nonprofits may depend—as here—in sub- stantial part on fees charged for their services. Clotfelter, The Distributional Consequences of Nonprofit Activities, in Who Benefits from the Nonprofit Sector? 1, 6 (C. Clotfelter ed. 1992) (nonprofits in some sectors are “heavily dependent on fees by paying customers, with private payments account- ing for at least half of total revenues”). Whether operated on a for-profit or nonprofit basis, they purchase goods and 17 Maine’s law governing nonprofits embraces this conception, see Me. Rev. Stat. Ann., Tit. 13–B, § 102(9) (1981), as does the tax exemption stat- ute at issue here. The exemption applies to “benevolent and charitable institutions.” Me. Rev. Stat. Ann., Tit. 36, § 652(1)(A) (Supp. 1996). To qualify, the entity must devote “[a]ll profits derived from [its] operation . . . and the proceeds from the sale of its property . . . exclusively to the purposes for which it is organized.” § 652(1)(C)(3). “A director, trustee, officer or employee of an organization claiming exemption is not entitled to receive directly or indirectly any pecuniary profit from the operation of that organization, excepting reasonable compensation for services in effecting its purposes.” § 652(1)(C)(2). The statute also expressly desig- nates certain categories of entities (nonprofit nursing homes, boarding homes, community mental health service facilities, and child care centers) that qualify for tax exempt status under federal law, 26 U. S. C. § 501(c)(3), as falling within its ambit. See Me. Rev. Stat. Ann., Tit. 36, § 652(1)(A) (Supp. 1996) (“ ‘[B]enevolent and charitable institutions’ include, but are not limited to, [the specified entities]”). 520US2 Unit: $U54 [09-10-99 19:36:34] PAGES PGT: OPIN 588 CAMPS NEWFOUND/OWATONNA, INC. v. TOWN OF HARRISON Opinion of the Court stitutions participate. Indeed, if we view the issue solely from the State’s perspective, it is equally reasonable to use discriminatory tax exemptions as a means of encouraging the growth of local trade. But as our cases clearly hold, such exemptions are impermissible. See, e. g., Bacchus Imports, Ltd. v. Dias, 468 U. S. 263, 273 (1984). Protectionism, whether targeted at for-profit entities or serving, as here, to encourage nonprofits to keep their efforts close to home, is forbidden under the dormant Commerce Clause.19 If there is need for a special exception for nonprofits, Congress not only has the power to create it,20 but also is in a far better position than we to determine its dimensions.21 VI Rather than urging us to create a categorical exception for nonprofit entities, the Town argues that Maine’s exemption statute should be viewed as an expenditure of government money designed to lessen its social service burden and to foster the societal benefits provided by charitable organiza- tions. So characterized, the Town submits that its tax ex- emption scheme is either a legitimate discriminatory subsidy 19 Contrary to Justice Scalia’s suggestion, nothing in our holding today “prevent[s] a State from giving a tax break to charities that benefit the State’s inhabitants.” Post, at 595. The States are, of course, free to provide generally applicable nondiscriminatory tax exemptions without running afoul of the dormant Commerce Clause. 20 See n. 8, supra. 21 We must admit to some puzzlement as to the force of the argument underlying Justice Scalia’s dissent. On the one hand, he suggests that a categorical exemption of nonprofit activities from dormant Commerce Clause scrutiny would be proper. Post, at 607–608. Yet at the same time, he makes a great effort to characterize this statute as being so nar- row that, whatever the appropriate generally applicable rule, the dormant Commerce Clause ought not to apply here. Post, at 598. As we have explained, the argument in favor of a categorical exemption for nonprofits is unpersuasive, and we disagree with Justice Scalia’s characterization of this statute’s effects. Accordingly, we reject his position on either of these theories. 520US2 Unit: $U54 [09-10-99 19:36:34] PAGES PGT: OPIN 589Cite as: 520 U. S. 564 (1997) Opinion of the Court of only those charities that choose to focus their activities on local concerns, or alternatively a governmental “purchase” of charitable services falling within the narrow exception to the dormant Commerce Clause for States in their role as “market participants,” see, e. g., Hughes v. Alexandria Scrap Corp., 426 U. S. 794 (1976); Reeves, Inc. v. Stake, 447 U. S. 429 (1980). We find these arguments unpersuasive. Al- though tax exemptions and subsidies serve similar ends, they differ in important and relevant respects, and our cases have recognized these distinctions. As for the “market partici- pant” argument, we have already rejected the Town’s posi- tion in a prior case, and in any event respondents’ open- ended exemption for charitable and benevolent institutions is not analogous to the industry-specific state actions that we reviewed in Alexandria Scrap and Reeves. The Town argues that its discriminatory tax exemption is, in economic reality, no different from a discriminatory sub- sidy of those charities that cater principally to local needs. Noting our statement in West Lynn Creamery that “[a] pure subsidy funded out of general revenue ordinarily imposes no burden on interstate commerce, but merely assists local busi- ness,” 512 U. S., at 199, the Town submits that since a dis- criminatory subsidy may be permissible, a discriminatory ex- emption must be, too. We have “never squarely confronted the constitutionality of subsidies,” id., at 199, n. 15, and we need not address these questions today. Assuming, argu- endo, that the Town is correct that a direct subsidy benefit- ing only those nonprofits serving principally Maine residents would be permissible, our cases do not sanction a tax exemp- tion serving similar ends.22 22 As the Supreme Judicial Court made clear, 655 A. 2d, at 878, under Maine law an exemption is categorized as a “tax expenditure.” Me. Rev. Stat. Ann., Tit. 36, § 196 (1990). The Town’s effort to argue that this state statutory categorization allows it to elide the federal constitutional distinc- tion between tax exemptions and subsidies is unavailing. We recognized long ago that a tax exemption can be viewed as a form of government 520US2 Unit: $U54 [09-10-99 19:36:34] PAGES PGT: OPIN 590 CAMPS NEWFOUND/OWATONNA, INC. v. TOWN OF HARRISON Opinion of the Court In Walz v. Tax Comm’n of City of New York, 397 U. S. 664 (1970), notwithstanding our assumption that a direct subsidy of religious activity would be invalid,23 we held that New York’s tax exemption for church property did not violate the Establishment Clause of the First Amendment.24 That holding rested, in part, on the premise that there is a consti- tutionally significant difference between subsidies and tax exemptions.25 We have expressly recognized that this dis- tinction is also applicable to claims that certain state action designed to give residents an advantage in the marketplace is prohibited by the Commerce Clause. In New Energy Co. of Ind. v. Limbach, 486 U. S. 269 (1988), we found unconstitutional under the Commerce Clause an Ohio tax scheme that provided a sales tax credit for ethanol produced in State, or manufactured in another State to the extent that State gave similar tax advantages to ethanol produced in Ohio. We recognized that the party challenging the Ohio scheme was “eligible to receive a cash subsidy” spending. See Regan v. Taxation with Representation of Wash., 461 U. S. 540, 544 (1983). The distinction we have drawn for dormant Commerce Clause purposes does not turn on this point. 23 We noted: “Obviously a direct money subsidy would be a relationship pregnant with involvement and, as with most governmental grant pro- grams, could encompass sustained and detailed administrative relation- ships for enforcement of statutory or administrative standards, but that is not this case.” Walz, 397 U. S., at 675. 24 We reasoned that “New York’s statute [cannot be read] as attempting to establish religion; it . . . simply spar[es] the exercise of religion from the burden of property taxation levied on private profit institutions.” Id., at 673. 25 “The grant of a tax exemption is not sponsorship since the govern- ment does not transfer part of its revenue to churches but simply abstains from demanding that the church support the state. No one has ever sug- gested that tax exemption has converted libraries, art galleries, or hospi- tals into arms of the state or put employees ‘on the public payroll.’ ” Id., at 675. As Justice Brennan noted: “Tax exemptions and general subsidies . . . are qualitatively different.” Id., at 690 (concurring opinion). 520US2 Unit: $U54 [09-10-99 19:36:34] PAGES PGT: OPIN 593Cite as: 520 U. S. 564 (1997) Opinion of the Court chaser or seller may “favor its own citizens over others.” Alexandria Scrap, 426 U. S., at 810. Maine’s tax exemption statute cannot be characterized as a proprietary activity falling within the market-participant exception. In New Energy Co., Ohio argued similarly that a discriminatory tax credit program fell within the excep- tion. We noted that the tax program had “the purpose and effect of subsidizing a particular industry, as do many dis- positions of the tax laws.” 486 U. S., at 277. “That,” we explained, “does not transform it into a form of state partici- pation in the free market.” Ibid. “The Ohio action ulti- mately at issue is neither its purchase nor its sale of ethanol, but its assessment and computation of taxes—a primeval governmental activity.” Ibid. As we indicated in White: “[I]n this kind of case there is ‘a single inquiry: whether the challenged “program constituted direct state participation in the market.” ’ ” 460 U. S., at 208 (quoting Reeves, 447 U. S., at 436, n. 7). A tax exemption is not the sort of direct state involvement in the market that falls within the market- participation doctrine. Even if we were prepared to expand the exception in the manner suggested by the Town, the Maine tax statute at issue here would be a poor candidate. Like the tax exemp- tion upheld in Walz—which applied to libraries, art galleries, and hospitals as well as churches 28—the exemption that has been denied to petitioner is available to a broad category of charitable and benevolent institutions.29 For that rea- son, nothing short of a dramatic expansion of the “market- 28 See Walz, 397 U. S., at 666–667, and n. 1. 29 See Me. Rev. Stat. Ann., Tit. 36, § 652(1)(A) (Supp. 1996) (“For the purposes of this paragraph, ‘benevolent and charitable institutions’ in- clude, but are not limited to, nonprofit nursing homes and nonprofit board- ing homes and boarding care facilities . . . , nonprofit community mental health service facilities . . . [,] and nonprofit child care centers”) (empha- sis added). 520US2 Unit: $U54 [09-10-99 19:36:34] PAGES PGT: OPIN 594 CAMPS NEWFOUND/OWATONNA, INC. v. TOWN OF HARRISON Opinion of the Court participant” exception would support its application to this case. Alexandria Scrap involved Maryland’s entry into the market for automobile hulks, a discrete activity focused on a single industry. Similarly, South Dakota’s participation in the market for cement was—in part because of its narrow scope—readily conceived as a proprietary action of the State. In contrast, Maine’s tax exemption—which sweeps to cover broad swathes of the nonprofit sector—must be viewed as action taken in the State’s sovereign capacity rather than a proprietary decision to make an entry into all of the markets in which the exempted charities function. See White, 460 U. S., at 211, n. 7 (noting that “there are some limits on a state or local government’s ability to impose restric- tions that reach beyond the immediate parties with which the government transacts business”). The Town’s version of the “market-participant” exception would swallow the rule against discriminatory tax schemes. Contrary to the Town’s submission, the notion that whenever a State pro- vides a discriminatory tax abatement it is “purchasing” some service in its proprietary capacity is not readily confined to the charitable context. A special tax concession for liquors indigenous to Hawaii, for example, might be conceived as a “purchase” of the jobs produced by local industry, or an investment in the unique local cultural value provided by these beverages. Cf. Bacchus, 468 U. S., at 270–271. Dis- criminatory schemes favoring local farmers might be seen as the “purchase” of agricultural services in order to ensure that the State’s citizens will have a steady local supply of the product. Cf. West Lynn, 512 U. S., at 190 (striking down statute protecting in-state milk producers designed to “pre- serve . . . local industry,” “thereby ensur[ing] a continuous and adequate supply of fresh milk for our market” (internal quotation marks omitted)). Our cases provide no support for the Town’s radical effort to expand the market- participant doctrine. 520US2 Unit: $U54 [09-10-99 19:36:34] PAGES PGT: OPIN 595Cite as: 520 U. S. 564 (1997) Scalia, J., dissenting VII As was true in Bacchus Imports, Ltd. v. Dias, the facts of this particular case, viewed in isolation, do not appear to pose any threat to the health of the national economy. Nev- ertheless, history, including the history of commercial con- flict that preceded the Constitutional Convention as well as the uniform course of Commerce Clause jurisprudence ani- mated and enlightened by that early history, provides the context in which each individual controversy must be judged. The history of our Commerce Clause jurisprudence has shown that even the smallest scale discrimination can inter- fere with the project of our Federal Union. As Justice Car- dozo recognized, to countenance discrimination of the sort that Maine’s statute represents would invite significant in- roads on our “national solidarity”: “The Constitution was framed under the dominion of a political philosophy less parochial in range. It was framed upon the theory that the peoples of the several states must sink or swim together, and that in the long run prosperity and salvation are in union and not divi- sion.” Baldwin v. G. A. F. Seelig, Inc., 294 U. S. 511, 523 (1935). The judgment of the Maine Supreme Judicial Court is reversed. It is so ordered. Justice Scalia, with whom The Chief Justice, Justice Thomas, and Justice Ginsburg join, dissenting. The Court’s negative Commerce Clause jurisprudence has drifted far from its moorings. Originally designed to create a national market for commercial activity, it is today invoked to prevent a State from giving a tax break to charities that benefit the State’s inhabitants. In my view, Maine’s tax exemption, which excuses from taxation only that property 520US2 Unit: $U54 [09-10-99 19:36:34] PAGES PGT: OPIN 598 CAMPS NEWFOUND/OWATONNA, INC. v. TOWN OF HARRISON Scalia, J., dissenting nection with the State’s regulation of interstate commerce.” Ibid. (emphasis in original). II In applying the foregoing principles to the case before us, it is of course important to understand the precise scope of the exemption created by Me. Rev. Stat. Ann., Tit. 36, § 652(1)(A) (Supp. 1996–1997). The Court’s analysis suffers from the misapprehension that § 652(1)(A) “sweeps to cover broad swathes of the nonprofit sector,” ante, at 594, including nonprofit corporations engaged in quintessentially commer- cial activities. That is not so. A review of Maine law dem- onstrates that the provision at issue here is a narrow tax exemption, designed merely to compensate or subsidize those organizations that contribute to the public fisc by dis- pensing public benefits the State might otherwise provide. Although Maine allows nonprofit corporations to be orga- nized “for any lawful purpose,” Me. Rev. Stat. Ann., Tit. 13–B, § 201 (1981 and Supp. 1996–1997), the exemption sup- plied by § 652(1)(A) does not extend to all nonprofit organi- zations, but only to those “benevolent and charitable insti- tutions,” § 652(1)(A), which are “organized and conducted exclusively for benevolent and charitable purposes,” § 652(1)(C)(1) (emphasis added), and only to those parcels of real property and items of personal property that are used “solely,” § 652(1)(A), “to further the organization’s charitable purposes,” Poland v. Poland Springs Health Institute, Inc., 649 A. 2d 1098, 1100 (Me. 1994). The Maine Supreme Judi- cial Court has defined the statutory term “benevolent and charitable institutions” to include only those nonprofits that dispense “charity,” which is in turn defined to include only those acts which are “ ‘for the benefit of an indefinite number of persons, either by bringing their minds or hearts under the in- fluence of education or religion, by relieving their bodies from disease, suffering, or constraint, by assisting them 520US2 Unit: $U54 [09-10-99 19:36:34] PAGES PGT: OPIN 599Cite as: 520 U. S. 564 (1997) Scalia, J., dissenting to establish themselves in life, or by erecting or main- taining public buildings or works or otherwise lessening the burdens of government.’ ” Lewiston v. Marcotte Congregate Housing, Inc., 673 A. 2d 209, 211 (1996) (em- phasis added). Moreover, the Maine Supreme Judicial Court has further limited the § 652(1)(A) exemption by insisting that the party claiming its benefit “bring its claim unmistakably within the spirit and intent of the act creating the exemption,” ibid. (internal quotation marks omitted), and by proclaiming that the spirit and intent of § 652(1)(A) is to compensate charita- ble organizations for their contribution to the public fisc. As the court has explained: “ ‘[A]ny institution which by its charitable activities re- lieves the government of part of [its] burden is confer- ring a pecuniary benefit upon the body politic, and in receiving exemption from taxation it is merely being given a “quid pro quo” for its services in providing something which otherwise the government would have to provide.’ ” Episcopal Camp Foundation, Inc. v. Hope, 666 A. 2d 108, 110 (1995) (quoting Young Men’s Christian Assn. of Germantown v. Philadelphia, 323 Pa. 401, 413, 187 A. 204, 210 (1936)). Thus, § 652(1)(A) exemptions have been denied to organiza- tions that do not provide substantial public benefits, as de- fined by reference to the state public policy. In one case, for example, an organization devoted to maintaining a wild- life sanctuary was denied exemption on the ground that the preserve’s prohibition on deer hunting conflicted with state policy on game management, so that the preserve could not be deemed to provide a public benefit. See Holbrook Island Sanctuary v. Brooksville, 214 A. 2d 660 (Me. 1965). Even churches have been denied exemptions, see Pentecostal Assembly of Bangor v. Maidlow, 414 A. 2d 891, 893–894 520US2 Unit: $U54 [09-10-99 19:36:34] PAGES PGT: OPIN 600 CAMPS NEWFOUND/OWATONNA, INC. v. TOWN OF HARRISON Scalia, J., dissenting (Me. 1980) (“religious purposes are not to be equated with benevolent and charitable purposes”). The Maine Supreme Judicial Court has adhered rigorously to the requirement that the exempt property be used “solely” for charitable purposes. Even when there is no question that the organization owning the property is de- voted exclusively to charitable purposes, the entire exemp- tion will be forfeited if even a small fraction of the property is not used in furtherance of those purposes. See Lewiston, supra, at 212–213 (denying exemption to a building 18 per- cent of which was leased at market rates); Nature Conser- vancy of Pine Tree State, Inc. v. Bristol, 385 A. 2d 39, 43 (1978) (denying exemption to a nature preserve on which the grantors had reserved rights-of-way). That § 652(1)(A) serves to compensate private charities for helping to relieve the State of its burden of caring for its residents should not be obscured by the fact that this partic- ular case involves a summer camp rather than a more tradi- tional form of social service. The statute that the Court strikes down does not speak of “camps” at all, but rather lists as examples of “benevolent and charitable institutions” nonprofit nursing homes, boarding homes, community men- tal health service facilities, and child care centers, see § 652(1)(A). Some summer camps fall within the exemption under a 1933 decision of the Supreme Judicial Court which applied it to a tuition-free camp for indigent children, see Camp Emoh Associates v. Inhabitants of Lyman, 166 A. 59, 60, and under a recent 4-to-3 decision which relied heavily on the fact that the camp at issue provided “moral instruc- tion” and training in “social living and civic responsibility,” and was not only “nonprofit” but furnished its camping serv- ices below cost, see Episcopal Camp Foundation, supra, at 109, 111. What is at issue in this case is not whether a sum- mer camp can properly be regarded as relieving the State of social costs, but rather whether, assuming it can, a dis- tinction between charities serving mainly residents and 520US2 Unit: $U54 [09-10-99 19:36:35] PAGES PGT: OPIN 603Cite as: 520 U. S. 564 (1997) Scalia, J., dissenting Once having concluded that the statute is facially discrimina- tory, the Court rests. “[T]he Town,” it asserts, “has made no effort to defend the statute under the per se rule.” Ante, at 582. This seems to me a pointless technicality. The town of Harrison (Town) has asserted that the State’s interest in encouraging private entities to shoulder part of its social- welfare burden validates this provision under the negative Commerce Clause. Whether it does so because the presence of that interest causes the resident-benefiting charities not to be “similarly situated” to the non-resident-benefiting charities, and hence negates “facial discrimination,” or rather because the presence of that interest justifies “facial discrim- ination,” is a question that is not only of no consequence but is also probably unanswerable. To strike down this statute because the Town’s lawyers put the argument in one form rather than the other is truly senseless.2 If the Court were to proceed with that further analysis it would have to conclude, in my view, that this is one of those cases in which the “virtually per se rule of invalidity” does not apply. Facially discriminatory or not, the exemption is no more an artifice of economic protectionism than any state law which dispenses public assistance only to the State’s resi- dents.3 Our cases have always recognized the legitimacy of 2 I do not understand the Court’s contention, ante, at 582, and n. 16, that Fulton Corp. v. Faulkner, 516 U. S. 325 (1996), provides precedent for such a course. In Fulton, the arguments left unaddressed had not been made in another form, but had not been made at all. There (unlike here) the State conceded facial discrimination, and relied exclusively on the compensatory tax defense, see id., at 333, which the Court found had not been made out, see id., at 344. That narrow defense could not possi- bly have been regarded as an invocation of broader policy justifications such as those asserted here. 3 In a footnote responding to this dissent, the Court does briefly address whether the statute fails the “virtually per se rule of invalidity.” It con- cludes that it does fail because “Maine has ample alternatives short of a facially discriminatory property tax exemption,” such as offering direct cash subsidies to parents of resident children or to camps that serve resi- dents. Ante, at 582, n. 16. These are nonregulatory alternatives (and hence immune from negative Commerce Clause attack), but they are not 520US2 Unit: $U54 [09-10-99 19:36:35] PAGES PGT: OPIN 604 CAMPS NEWFOUND/OWATONNA, INC. v. TOWN OF HARRISON Scalia, J., dissenting limiting state-provided welfare benefits to bona fide resi- dents. As Justice Stevens once wrote for a unanimous Court: “Neither the overnight visitor, the unfriendly agent of a hostile power, the resident diplomat, nor the illegal en- trant, can advance even a colorable claim to a share in the bounty that a conscientious sovereign makes available to its own citizens.” Mathews v. Diaz, 426 U. S. 67, 80 (1976). States have restricted public assistance to their own bona fide residents since colonial times, see, M. Ierley, With Char- ity For All, Welfare and Society, Ancient Times to the Pres- ent 41 (1984), and such self-interested behavior (or, put more benignly, application of the principle that charity begins at home) is inherent in the very structure of our federal system, cf. Edgar v. MITE Corp., 457 U. S. 624, 644 (1982) (“[T]he State has no legitimate interest in protecting nonresi- dent[s]”). We have therefore upheld against equal protec- tion challenge continuing residency requirements for munici- pal employment, see McCarthy v. Philadelphia Civil Serv. Comm’n, 424 U. S. 645 (1976) (per curiam), and bona fide nondiscriminatory alternatives, which is what the exception to the “vir- tually per se rule of invalidity” requires. See Oregon Waste Systems, Inc. v. Department of Environmental Quality of Ore., 511 U. S. 93, 101 (1994) (quoting New Energy Co. of Ind. v. Limbach, 486 U. S. 269, 278 (1988)). Surely, for example, our decision in Maine v. Taylor, 477 U. S. 131 (1986), which upheld Maine’s regulatory ban on the importation of baitfish, would not have come out the other way if it had been shown that a state subsidy of sales of in-state baitfish could have achieved the same goal—by making the out-of-state fish noncompetitive and thereby excluding them from the market even more effectively than a difficult-to-police ban on importation. Where regulatory discrimination against out-of-state interests is appro- priate, the negative Commerce Clause is not designed to push a State into nonregulatory discrimination instead. It permits state regulatory action disfavoring out-of-staters where disfavoring them is indispensable to the achievement of an important and nonprotectionist state objective. As applied to the present case: It is obviously impossible for a State to dis- tribute social welfare benefits only to its residents without discriminating against nonresidents. 520US2 Unit: $U54 [09-10-99 19:36:35] PAGES PGT: OPIN 605Cite as: 520 U. S. 564 (1997) Scalia, J., dissenting residency requirements for free primary and secondary schooling, see Martinez v. Bynum, 461 U. S. 321 (1983). If the negative Commerce Clause requires the invalidation of a law such as § 652(1)(A), as a logical matter it also re- quires invalidation of the laws involved in those cases. After all, the Court today relies not on any discrimination against out-of-state nonprofits, but on the supposed discrimi- nation against nonresident would-be recipients of charity (the nonprofits’ “customers”); surely those individuals are similarly discriminated against in the direct distribution of state benefits. The problem, of course, is not limited to mu- nicipal employment and free public schooling, but extends also to libraries, orphanages, homeless shelters, and refuges for battered women. One could hardly explain the constitu- tionality of a State’s limiting its provision of these to its own residents on the theory that the State is a “market partici- pant.” These are traditional governmental functions, far re- moved from commercial activity and utterly unconnected to any genuine private market. If, however, a State that provides social services directly may limit its largesse to its own residents, I see no reason why a State that chooses to provide some of its social serv- ices indirectly—by compensating or subsidizing private char- itable providers—cannot be similarly restrictive.4 In fact, we have already approved it. In Board of Ed. of Ky. An- nual Conference of Methodist Episcopal Church v. Illinois, 203 U. S. 553 (1906), we upheld a state law providing an in- 4 It is true, of course, that the legitimacy of a State’s subsidizing domes- tic commercial enterprises out of general funds does not establish the le- gitimacy of a State’s giving domestic commercial enterprises preferential tax treatment. See West Lynn Creamery, Inc. v. Healy, 512 U. S. 186, 210–212 (1994) (Scalia, J., concurring in judgment). But there is no valid comparison between, on the one hand, the State’s giving tax relief to an enterprise devoted to the making of profit and, on the other hand, the State’s giving tax relief to an enterprise which, for the purpose at hand, has the same objective as the State itself (the expenditure of funds for social welfare). 520US2 Unit: $U54 [09-10-99 19:36:35] PAGES PGT: OPIN 608 CAMPS NEWFOUND/OWATONNA, INC. v. TOWN OF HARRISON Scalia, J., dissenting negative Commerce Clause jurisprudence. That is, I think, self-evidently true, despite the Court’s effort to label the recipients of the State’s philanthropy as “customers,” or “cli- entele,” see, e. g., ante, at 576. Because § 652(1)(A) clearly serves these purposes and has nothing to do with economic protectionism, I believe that it is beyond scrutiny under the negative Commerce Clause. * * * As I have discussed, there are various routes by which the Court could validate the statute at issue here: on the ground that it does not constitute “facial discrimination” against in- terstate commerce and readily survives the Pike v. Bruce Church balancing test; on the ground that it does constitute “facial discrimination” but is supported by such traditional and important state interests that it survives scrutiny under the “virtually per se rule of invalidity”; or on the ground that there is a “domestic charity” exception ( just as there is a “public utility” exception) to the negative Commerce Clause. Whichever route is selected, it seems to me that the quid pro quo exemption at issue here is such a reasonable exercise of the State’s taxing power that it is not prohibited by the Commerce Clause in the absence of congressional action. We held as much in Board of Ed. of Ky. and should not over- rule that decision. The State of Maine may have special need for a charitable-exemption limitation of the sort at issue here: Its lands and lakes are attractive to various charities of more densely populated Eastern States, which would (if the limi- tation did not exist) compel the taxpayers of Maine to sub- sidize their generosity. But the principle involved in our disapproval of Maine’s exemption limitation has broad appli- cation elsewhere. A State will be unable, for example, to exempt private schools that serve its citizens from state and local real estate taxes unless it exempts as well private schools attended predominantly or entirely by students from 520US2 Unit: $U54 [09-10-99 19:36:35] PAGES PGT: OPIN 609Cite as: 520 U. S. 564 (1997) Thomas, J., dissenting out of State. A State that provides a tax exemption for real property used exclusively for the purpose of feeding the poor must provide an exemption for the facilities of an organiza- tion devoted exclusively to feeding the poor in another coun- try. These results may well be in accord with the parable of the Good Samaritan, but they have nothing to do with the Commerce Clause. I respectfully dissent. Justice Thomas, with whom Justice Scalia joins, and with whom The Chief Justice joins as to Part I, dissenting. The tax at issue here is a tax on real estate, the quintes- sential asset that does not move in interstate commerce. Maine exempts from its otherwise generally applicable prop- erty tax, and thereby subsidizes, certain charitable organiza- tions that provide the bulk of their charity to Maine’s own residents. By invalidating Maine’s tax assessment on the real property of charitable organizations primarily serving non-Maine residents, because of the tax’s alleged indirect effect on interstate commerce, the majority has essentially created a “dormant” Necessary and Proper Clause to sup- plement the “dormant” Commerce Clause. This move works a significant, unwarranted, and, in my view, improv- ident expansion in our “dormant,” or “negative,” Commerce Clause jurisprudence.1 For that reason, I join Justice Scalia’s dissenting opinion. 1 Although the terms “dormant” and “negative” have often been used interchangeably to describe our jurisprudence in this area, I believe “neg- ative” is the more appropriate term. See Oklahoma Tax Comm’n v. Jef- ferson Lines, Inc., 514 U. S. 175, 200 (1995) (Scalia, J., joined by Thomas, J., concurring in judgment) (“[T]he ‘negative Commerce Clause’ . . . is ‘negative’ not only because it negates state regulation of commerce, but also because it does not appear in the Constitution”). There is, quite frankly, nothing “dormant” about our jurisprudence in this area. See Eule, Laying the Dormant Commerce Clause to Rest, 91 Yale L. J. 425, 425, n. 1 (1982). 520US2 Unit: $U54 [09-10-99 19:36:35] PAGES PGT: OPIN 610 CAMPS NEWFOUND/OWATONNA, INC. v. TOWN OF HARRISON Thomas, J., dissenting I write separately, however, because I believe that the im- proper expansion undertaken today is possible only because our negative Commerce Clause jurisprudence, developed primarily to invalidate discriminatory state taxation of interstate commerce, was already both overbroad and un- necessary. It was overbroad because, unmoored from any constitutional text, it brought within the supervisory author- ity of the federal courts state action far afield from the dis- criminatory taxes it was primarily designed to check. It was unnecessary because the Constitution would seem to provide an express check on the States’ power to levy certain discriminatory taxes on the commerce of other States—not in the judicially created negative Commerce Clause, but in the Art. I, § 10, Import-Export Clause, our decision in Wood- ruff v. Parham, 8 Wall. 123 (1869), notwithstanding. That the expansion effected by today’s decision finds some support in the morass of our negative Commerce Clause case law only serves to highlight the need to abandon that failed juris- prudence and to consider restoring the original Import- Export Clause check on discriminatory state taxation to what appears to be its proper role. As I explain in Part III, the tax (and tax exemption) at issue in this case seems easily to survive Import-Export Clause scrutiny; I would therefore, in all likelihood, sustain Maine’s tax under that Clause as well, were we to apply it instead of the judicially created negative Commerce Clause. I The negative Commerce Clause has no basis in the text of the Constitution, makes little sense, and has proved virtually unworkable in application. See, e. g., Tyler Pipe Industries, Inc. v. Washington State Dept. of Revenue, 483 U. S. 232, 259–265 (1987) (Scalia, J., dissenting); Bendix Autolite Corp. v. Midwesco Enterprises, Inc., 486 U. S. 888, 895–898 (1988) (Scalia, J., concurring in judgment). In one fashion 520US2 Unit: $U54 [09-10-99 19:36:35] PAGES PGT: OPIN 613Cite as: 520 U. S. 564 (1997) Thomas, J., dissenting of them by the states”).6 It was seriously questioned even in early cases. See License Cases, 5 How. 504, 583, 615, 618, 624 (1847) (four, and arguably five, of the seven participating Justices contending that the Commerce Clause was not ex- clusive). And, in any event, the Court has long since “repu- diated” the notion that the Commerce Clause operates as an exclusive grant of power to Congress, and thereby forecloses state action respecting interstate commerce. Freeman v. Hewit, 329 U. S. 249, 259, 262 (1946) (Rutledge, J., concur- ring); see also, e. g., Southern Pacific Co. v. Arizona ex rel. Sullivan, 325 U. S. 761, 766–767 (1945) (“Ever since Willson v. Black-Bird Creek Marsh Co., 2 Pet. 245, and Cooley v. Board of Wardens, 12 How. 299, it has been recognized that, in the absence of conflicting legislation by Congress, there is a residuum of power in the state to make laws governing matters of local concern which nevertheless in some measure affect interstate commerce or even, to some extent, regulate it”); James v. Watt, 716 F. 2d 71, 73 (CA1 1983) (Breyer, J.) (noting that “the strong Madison/Marshall ‘preemptive’ view of the Interstate Commerce Clause is no longer the law of the land”), cert. denied, 467 U. S. 1209 (1984).7 6 See also F. Frankfurter, The Commerce Clause Under Marshall, Taney and Waite 13 (1937) (“The conception that the mere grant of the commerce power to Congress dislodged state power finds no expression” in the rec- ords of the Philadelphia Convention nor the discussions preceding ratifi- cation); id., at 17–19 (noting that Chief Justice Marshall’s discussion of the “exclusiveness” doctrine in Gibbons v. Ogden, 9 Wheat. 1, 197–209 (1824), “was logically irrelevant to [his] holding,” and adding: “It was an audacious doctrine, which, one may be sure, would hardly have been publicly avowed in support of the adoption of the Constitution. Indeed, The Federalist in effect denied it, by assuring that only express prohibitions in the Constitu- tion limited the taxing power of the states” (citing The Federalist No. 32)). 7 The majority’s assertion that James Madison viewed what we have termed the “negative” aspect of the Commerce Clause as more significant than its positive aspects, see ante, at 571, n. 7, is based on a letter written by Madison more than 40 years after the Convention, see 3 The Records of the Federal Convention of 1787, p. 478 (M. Farrand ed. 1911) (hereinafter Farrand) (reprinting letter from James Madison to J. C. Cabell, Feb. 13, 520US2 Unit: $U54 [09-10-99 19:36:35] PAGES PGT: OPIN 614 CAMPS NEWFOUND/OWATONNA, INC. v. TOWN OF HARRISON Thomas, J., dissenting Indeed, the Court’s early view that the Commerce Clause, on its own, prohibited state impediments to interstate com- merce such that “Congress cannot re-grant, or in any manner reconvey to the states that power,” Cooley v. Board of War- dens of Port of Philadelphia ex rel. Soc. for Relief of Dis- tressed Pilots, 12 How. 299, 318 (1852), quickly proved un- tenable. Compare Pennsylvania v. Wheeling & Belmont Bridge Co., 13 How. 518 (1852) (holding that construction of the Wheeling Bridge impeded commerce in violation of the Commerce Clause), with Pennsylvania v. Wheeling & Bel- mont Bridge Co., 18 How. 421, 426 (1856) (upholding Federal Act that declared the Wheeling Bridge to be “[a] lawful structur[e]”); see also Transportation Co. v. Parkersburg, 107 U. S. 691, 701 (1883) (“It is Congress, and not the Judicial Department, to which the Constitution has given the power to regulate commerce”).8 And, as this Court’s definition of the scope of congressional authority under the positive Com- merce Clause has expanded, the exclusivity rationale has moved from untenable to absurd. The second theory offered to justify creation of a negative Commerce Clause is that Congress, by its silence, pre-empts state legislation. See Robbins v. Shelby County Taxing Dist., 120 U. S. 489, 493 (1887) (asserting that congressional 1829). The majority’s interpretation of the letter is anachronistic. There is nothing in the letter to suggest that Madison had in mind the “negative” Commerce Clause we have created which supposedly operates of its own force to allow courts to invalidate state laws that affect commerce. Rather, Madison’s reference to the Clause as granting a “power” strongly suggests that he was merely asserting that the Convention designed the Clause more to enable “the General Government,” namely, Congress, to negate state laws impeding commerce “rather than as a power to be used for the positive purposes of the General Government.” Ibid. 8 See also ante, at 572 (“Congress unquestionably has the power to re- pudiate or substantially modify th[e] course of [our negative Commerce Clause] adjudication”); Southern Pacific Co. v. Arizona ex rel. Sullivan, 325 U. S. 761, 769 (1945) (Congress has “undoubted” power to “permit the states to regulate the commerce in a manner which would otherwise not be permissible”). 520US2 Unit: $U54 [09-10-99 19:36:35] PAGES PGT: OPIN 615Cite as: 520 U. S. 564 (1997) Thomas, J., dissenting silence evidences congressional intent that there be no state regulation of commerce). In other words, we presumed that congressional “inaction” was “equivalent to a declaration that inter-State commerce shall be free and untrammelled.” Welton v. Missouri, 91 U. S. 275, 282 (1876). To the extent that the “pre-emption-by-silence” rationale ever made sense, it, too, has long since been rejected by this Court in virtually every analogous area of the law. For example, ever since the watershed case of Erie R. Co. v. Tompkins, 304 U. S. 64 (1938), this Court has rejected the notion that it can create a federal common law to fill in great silences left by Congress, and thereby pre-empt state law. We have recognized that “a federal court could not generally apply a federal rule of decision, despite the existence of juris- diction, in the absence of an applicable Act of Congress.” Milwaukee v. Illinois, 451 U. S. 304, 313 (1981).9 The limited areas in which we have created federal com- mon law typically involve either uniquely federal issues or the rights and responsibilities of the United States or its agents. See Texas Industries, Inc. v. Radcliff Materials, Inc., 451 U. S. 630, 641 (1981). But where a federal rule is not essential, or where state law already operates within a particular field, we have applied state law rather than opting to create federal common law. See United States v. Kimbell Foods, Inc., 440 U. S. 715, 730 (1979) (rejecting “generalized 9 See also Atherton v. FDIC, 519 U. S. 213, 218 (1997) (rejecting the “judicial ‘creation’ of a special federal rule of decision” and noting that “ ‘[w]hether latent federal power should be exercised to displace state law is primarily a decision for Congress,’ not the federal courts” (citation omit- ted)); O’Melveny & Myers v. FDIC, 512 U. S. 79, 83 (1994) (rejecting, as “so plainly wrong,” the contention that federal common law governs appli- cation of state causes of action brought by the Federal Deposit Insurance Corporation as receiver for a federally insured savings and loan); Milwau- kee, 451 U. S., at 313, n. 7, 314 (“Federal common law is a ‘necessary’ expe- dient” resorted to only when the Court is “compelled to consider federal questions ‘which cannot be answered from federal statutes alone’ ” (cita- tions omitted)). 520US2 Unit: $U54 [09-10-99 19:36:35] PAGES PGT: OPIN 618 CAMPS NEWFOUND/OWATONNA, INC. v. TOWN OF HARRISON Thomas, J., dissenting the actual letter, of the Constitution. Thus, in one of our early uses of the negative Commerce Clause, we invalidated a state tax on the privilege of selling goods “which are not the growth, produce, or manufacture of the State.” Welton v. Missouri, 91 U. S., at 278. And in Cook v. Pennsylvania, 97 U. S. 566 (1878), we struck down a state tax on out-of- state goods sold at auction. See also, e. g., I. M. Darnell & Son Co. v. Memphis, 208 U. S. 113 (1908); Voight v. Wright, 141 U. S. 62 (1891); Walling v. Michigan, 116 U. S. 446 (1886); Webber v. Virginia, 103 U. S. 344 (1881). To this day, we find discriminatory state taxes on out-of-state goods to be “virtually per se invalid” under our negative Commerce Clause. See, e. g., West Lynn Creamery, Inc. v. Healy, 512 U. S. 186 (1994); Associated Industries of Mo. v. Lohman, 511 U. S. 641 (1994); New Energy Co. of Ind. v. Limbach, 486 U. S. 269 (1988); Maryland v. Louisiana, 451 U. S. 725 (1981). Though each of these cases reached what intuitively seemed to be a desirable result—and in some cases arguably was the constitutionally correct result, as I describe below—the negative Commerce Clause rationale upon which they rested remains unsettling because of that rationale’s lack of a tex- tual basis. Moreover, our negative Commerce Clause jurisprudence has taken us well beyond the invalidation of obviously dis- criminatory taxes on interstate commerce. We have used the Clause to make policy-laden judgments that we are ill equipped and arguably unauthorized to make. See Moor- man Mfg. Co. v. Bair, 437 U. S. 267, 278–280 (1978) (recogniz- ing that establishing a formula for apportioning taxes on multistate corporations would require “extensive judicial lawmaking” for which the courts are ill suited). In so doing, we have developed multifactor tests in order to assess the perceived “effect” any particular state tax or regulation has on interstate commerce. See Complete Auto Transit, Inc. v. Brady, 430 U. S. 274 (1977); see also Quill Corp. v. North 520US2 Unit: $U54 [09-10-99 19:36:35] PAGES PGT: OPIN 619Cite as: 520 U. S. 564 (1997) Thomas, J., dissenting Dakota, 504 U. S. 298 (1992). And in an unabashedly legisla- tive manner, we have balanced that “effect” against the per- ceived interests of the taxing or regulating State, as the very description of our “general rule” indicates: “Where the statute regulates even-handedly to effectu- ate a legitimate local public interest, and its effects on interstate commerce are only incidental, it will be up- held unless the burden imposed on such commerce is clearly excessive in relation to the putative local bene- fits. Huron [Portland] Cement Co. v. Detroit, 362 U. S. 440, 443 [(1960)]. If a legitimate local purpose is found, then the question becomes one of degree. And the ex- tent of the burden that will be tolerated will of course depend on the nature of the local interest involved, and on whether it could be promoted as well with a lesser impact on interstate activities.” Pike v. Bruce Church, Inc., 397 U. S. 137, 142 (1970). Any test that requires us to assess (1) whether a particu- lar statute serves a “legitimate” local public interest; (2) whether the effects of the statute on interstate commerce are merely “incidental” or “clearly excessive in relation to the putative benefits”; (3) the “nature” of the local interest; and (4) whether there are alternative means of furthering the local interest that have a “lesser impact” on interstate commerce, and even then makes the question “one of de- gree,” surely invites us, if not compels us, to function more as legislators than as judges. See Bendix Autolite Corp. v. Midwesco Enterprises, Inc., 486 U. S., at 897–898 (Scalia, J., concurring in judgment) (urging abandonment of the Pike balancing test so as to “leave essentially legislative judg- ments to the Congress”). Moreover, our open-ended balancing tests in this area have allowed us to reach different results based merely “on differ- ing assessments of the force of competing analogies.” Okla- 520US2 Unit: $U54 [09-10-99 19:36:35] PAGES PGT: OPIN 620 CAMPS NEWFOUND/OWATONNA, INC. v. TOWN OF HARRISON Thomas, J., dissenting homa Tax Comm’n v. Jefferson Lines, Inc., 514 U. S. 175, 196, n. 7 (1995). The examples are almost too numerous to count, but there is perhaps none that more clearly makes the point than a comparison of our decisions in Philadelphia v. New Jersey, 437 U. S. 617 (1978), and its progeny, on the one hand, and Bowman v. Chicago & Northwestern R. Co., 125 U. S. 465 (1888), and its progeny, on the other. In Bowman, we recognized that States can prohibit the importation of “cattle or meat or other provisions that are diseased or de- cayed, or otherwise, from their condition and quality, unfit for human use or consumption,” id., at 489, a view to which we have adhered for more than a century, see, e. g., Maine v. Taylor, 477 U. S. 131 (1986); Asbell v. Kansas, 209 U. S. 251 (1908). In Philadelphia, however, we held that New Jersey could not prohibit the importation of “solid or liquid waste which originated or was collected outside the territorial lim- its of the State.” 437 U. S., at 618 (internal quotation marks omitted). The cases were arguably distinguishable, but only on policy grounds and not on any distinction derived from the text of the Constitution itself. Similarly, we have in some cases rejected attempts by a State to limit use of the State’s own natural resources to that State’s residents. See, e. g., Hughes v. Oklahoma, 441 U. S. 322, 338 (1979). But in other cases, we have upheld just such preferential access. See, e. g., Sporhase v. Nebraska ex rel. Douglas, 458 U. S. 941, 955–957 (1982); cf. Baldwin v. Fish and Game Comm’n of Mont., 436 U. S. 371 (1978). Again, the distinctions turned on often subtle policy judg- ments, not the text of the Constitution. In my view, none of this policy-laden decisionmaking is proper. Rather, the Court should confine itself to interpret- ing the text of the Constitution, which itself seems to pro- hibit in plain terms certain of the more egregious state taxes on interstate commerce described above, see supra, at 618, and leaves to Congress the policy choices necessary for any further regulation of interstate commerce. 520US2 Unit: $U54 [09-10-99 19:36:35] PAGES PGT: OPIN 623Cite as: 520 U. S. 564 (1997) Thomas, J., dissenting Maryland, for its part, taxed certain “articles exported out of” the State, including flour shipped to New England. 1784 Md. Laws, ch. 84, § 1; see also Letter from “A Citizen,” Nor- wich [Conn.] Packet, Jan. 17, 1788, p. 1, col. 1 (“The New- England States have imported, for four years past, from the State of Maryland, upwards of twenty five thousand barrels of flour annually—on which they have been obliged to pay a duty for the liberty of exportation”). And, when it provided for the inspection of salted foods “exported and imported from and to the town of Baltimore,” Maryland expressly in- cluded salted foods “brought or imported into the said town, from any part of this state, or any one of the United States, or from any foreign port whatever.” 1786 Md. Laws, ch. 17, § 5. In similar fashion, Connecticut adopted an excise tax that distinguished between “imported Chocolate,” taxed at three pence per pound, and “Chocolate made within this State,” taxed at one penny per pound. 1783 Conn. Acts and Laws 619. And in May 1784, Connecticut adopted an import duty that expressly applied to certain enumerated articles “im- ported or brought into this State, by Land or Water, from any of the United States of America.” 1784 Conn. Acts and Laws 271.11 11 Some commentators have argued that the phrase “imported or brought” suggests that Connecticut lawmakers intended to distinguish be- tween foreign goods “imported” and other States’ goods “brought” into the State. This supposed distinction between “imported” and “brought” is not consistent with the remainder of the statute, however. For exam- ple, the second paragraph of the Act uses the phrase “brought or imported into this State” when referring exclusively to items “that are not the Growth, Produce, or Manufacture of the United States.” 1784 Conn. Acts and Laws 271. And conversely, “imported” is used alone in contexts where it plainly covers goods produced in other States. See, e. g., id., at 309 (setting duty for sugar, “whether the Produce or Manufacture of the United States, or not, imported into this State”); cf. 1786 Md. Laws, ch. 17, § 6 (setting standards for “all beef and pork barrels brought to, or imported into, Baltimore-town, from any part of this state”). The more plausible view, therefore, is that the words “brought” and “imported” are 520US2 Unit: $U54 [09-10-99 19:36:35] PAGES PGT: OPIN 624 CAMPS NEWFOUND/OWATONNA, INC. v. TOWN OF HARRISON Thomas, J., dissenting In fact, when state legislators of the founding generation intended to limit the term “imports” only to goods of foreign origin, they were quite adept at so indicating. See id., at 269 (provision regarding merchants “who shall import annu- ally into [New London or New Haven] from Europe, Asia or Africa, Goods, Wares and Merchandise, the Growth, Produce or Manufacture of said Countries”); id., at 270 (setting duties for “Goods imported into this State from any Foreign Port, Island or Plantation not within any of The United States”); 2 New York Laws, ch. 7, p. 12 (1886) (Act of Nov. 18, 1784, setting duties for certain “articles imported from Europe”). Thus, based on this common 18th-century usage of the words “import” and “export,” and the lack of any textual indication that the Clause was intended to apply exclusively to foreign goods, it seems likely that those who drafted the Constitu- tion sought, through the Import-Export Clause, to prohibit States from levying duties and imposts on goods imported from, or exported to, other States as well as foreign nations, and that those who ratified the Constitution would have so understood the Clause. Our Civil War era decision in Woodruff v. Parham, 8 Wall. 123 (1869), of course, held that the Import-Export Clause applied only to foreign trade. None of the parties to these proceedings have challenged that holding, but given that the common 18th-century understanding of the words used in the Clause extended to interstate as well as foreign trade, it is largely redundant and, to the extent they refer to different activities, the distinction in the phrase is not between foreign goods “imported” into Connecticut, on the one hand, and other States’ goods “brought” into Con- necticut, on the other, but between goods of both kinds—domestic and foreign—commercially “imported” in quantity and those “brought” in lim- ited quantities by individuals in their own baggage. Compare 1784 Conn. Acts and Laws, at 272 (using the phrase “imported or brought” when re- ferring both to a ship’s cargo and to the “Baggage of Passengers”), with id., at 273 (using only the word “imported” when referring solely to the ship’s cargo). 520US2 Unit: $U54 [09-10-99 19:36:35] PAGES PGT: OPIN 625Cite as: 520 U. S. 564 (1997) Thomas, J., dissenting worth assessing the Woodruff Court’s reasoning with an eye toward reconsidering that decision in an appropriate case. The Woodruff Court began with a textual argument, con- tending that the power to levy “imposts” given to Congress in Art. I, § 8, cl. 1, applied only to foreign imports. Such a limited reading of the word “imposts” in that Clause was necessary, the Court claimed, because any other reading would be nonsensical: Goods “imported” by one State from another State, explained the Court, would be an “export” of the State where the goods were produced or grown, and the supposed power given to Congress in Art. I, § 8, to levy an “impost” on such “imports” would be prohibited by the Art. I, § 9, provision that “[n]o Tax or Duty shall be laid on Arti- cles exported from any State.” This apparent tension be- tween § 8 and § 9 led the Court to believe that the word “im- posts” in § 8 must be read as applying only to foreign imports in order to avoid a partial negation of the Art. I, § 8, power. The Court then extrapolated from this reading that the word “impost” in Art. I, § 10, similarly had the same limited appli- cation to foreign imports. As we have already seen, how- ever, see supra, at 621–623, the word “import” derived its meaning from the jurisdiction into which goods were im- ported; consequently, it does not necessarily follow that the imports on which Congress was given the power to lay “im- posts” in Art. I, § 8, were identical to the imports and exports on which the several States were prohibited from levying “Imposts or Duties” by Art. I, § 10.12 The Woodruff Court bolstered its textual argument with two further arguments, neither of which appear still to be 12 Even assuming that the word “impost” in the two Clauses applied to the same class of “imports,” there is nothing nonsensical in reading “im- post” in Art. I, § 8, as applicable to interstate as well as foreign trade. It is frequently the case that a broad grant of power in one Clause is re- stricted by another Clause. Moreover, a State could also import goods from a federal territory, and the congressional power to lay an impost on such (nonforeign) trade would not run afoul of the Art. I, § 9, prohibition. 520US2 Unit: $U54 [09-10-99 19:36:35] PAGES PGT: OPIN 628 CAMPS NEWFOUND/OWATONNA, INC. v. TOWN OF HARRISON Thomas, J., dissenting that foreign goods were the exclusive reference. Contrary to the Woodruff Court’s claim, the historical record does not appear to support such an exclusive use of the words. The records of the Continental Congress contain numerous examples of the words “duty,” “impost,” and “import” being used with reference to interstate trade. In 1785, for exam- ple, in response to the increasing animosities between the States engendered by conflicting interstate trade regula- tions, an amendment to the Articles of Confederation was proposed that would have vested in the Continental Con- gress the power to lay “such imposts and duties upon imports and exports, as may be necessary for the purpose” of “regu- lating the trade of the States, as well with foreign Nations, as with each other.” 28 Journals of the Continental Con- gress, Mar. 28, 1785, p. 201 (1933) (emphasis added). Two provisos within the proposed amendment further suggest that interstate imports and exports were very much within the purview of the amendment: First, “that the Citizens of the States shall in no instance be subjected to pay higher imposts and duties, than those imposed on the subjects of foreign powers”; and second, “that the Legislative power of the several States shall not be restrained from prohibiting the importation or exportation of any species of goods or commodities whatsoever.” Ibid. As early as 1779, the problems posed by interstate trade barriers had become acute enough to warrant a request by the Continental Congress urging the States “to repeal all laws or other restrictions laid on the inland trade between the said states.” Resolution of Aug. 25, 1779, 14 Journals of the Continental Congress 986; id., at 996 (adopting resolu- tion). While this particular resolution does not use the words “duties” or “imports,” it seems evident from a survey of the statutory “duties” being levied by some States on goods “imported” from other States, see supra, at 622–623, that the resolution was directed at just such duties on im- ports from other States. 520US2 Unit: $U54 [09-10-99 19:36:35] PAGES PGT: OPIN 629Cite as: 520 U. S. 564 (1997) Thomas, J., dissenting Many of the States ignored the request, of course, and their “rival, conflicting and angry regulations” continued to be a source of conflict until the new Constitution went into effect. See Madison, Preface to Debates in the Convention of 1787 (Draft), circa 1836, in 3 Farrand 547; see also, e. g., William Ellery to Samuel Dick, Aug. 2, 1784, in 7 Letters of Members of the Continental Congress 579 (E. Burnett ed. 1934) (hereinafter Burnett’s Letters) (predicting that Rhode Island would not agree to the national impost requested by the Congress in 1781 “until the States shall have agreed not to lay any duties upon goods imported into them from any one of their Sister States; perhaps not then” (emphasis added)); William Samuel Johnson to Jonathan Sturges (draft), Jan. 26, 1785, in 8 Burnett’s Letters 13 (noting that the Conti- nental Congress was considering asking the States “to invest Congress with the Power of regulating their Trade as well with foreign Nations as with each other,” a move which “might probably overturn the System [of “duties” on “im- ported” goods, see supra, at 623,] Conn[ecticu]t has adopt’d as relat[iv]e to N. Y. which it is said she will counteract by regulat[ion]s of her Assembly now convening” (emphasis in original)). In fact, the animosity engendered by the various duties levied on imports from other States was one of the motivat- ing factors leading to the Annapolis Convention of 1786. See T. Powell, Vagaries and Varieties in Constitutional Inter- pretation 182 (1956) (“When the Framers spoke in 1787, the states were substantially sovereign, and their exercises of sovereign powers in adversely affecting trade from sister states was one of the factors leading to the Annapolis confer- ence”). As noted by Tench Coxe, one of the Pennsylvania Commissioners appointed to attend the Convention: “Goods of the growth product and manufacture of the Other States in Union were [in several of the States] charged with high Duties upon importation into the enacting State—as great in many instances as those imposed on foreign Articles of 520US2 Unit: $U54 [09-10-99 19:36:35] PAGES PGT: OPIN 630 CAMPS NEWFOUND/OWATONNA, INC. v. TOWN OF HARRISON Thomas, J., dissenting the same Kinds.” Coxe, Letter to the Virginia Commission- ers at Annapolis, Sept. 13, 1786, reprinted in 9 The Papers of James Madison 125 (Rutland ed. 1975). Coxe thought the very purpose of the Annapolis Convention had been “[t]o pro- cure an alteration” of this and other practices, which were, he added, “evidently opposed to the great principles and Spirit of the Union.” Ibid. Similarly, one of the first criticisms leveled against the Ar- ticles of Confederation during the ensuing Federal Conven- tion was the general Government’s inability to prevent “quar- rels between states,” including those arising from the various “duties” the States imposed upon each other, both on foreign goods moving through the seaport States and on each other’s goods. See 1 Farrand 19, 25 (Edmund Randolph, May 29); see also Madison, Preface to Debates in the Convention of 1787 (draft), circa 1836, in 3 Farrand 547–548 (“Some of the States, as Connecticut, taxed imports as from Massts higher than imports even from G. B. of w[hi]ch Massts. complained to Virga. and doubtless to other States”). While the focus of the Convention quickly moved beyond the mere abolition of trade barriers, of course, there are pas- sages in the available Convention debates which indicate that interstate trade barriers remained a concern, and that the words of the Import-Export Clause applied to interstate, as well as to foreign, trade. George Mason, for example, proposed to exempt from the Import-Export Clause prohibi- tion duties necessary for the States’ execution of their in- spection laws. Otherwise, he argued, the “restriction on the States would prevent the incidental duties necessary for the inspection & safe-keeping of their produce, and be ruinous to the [Southern] Staple States.” 2 Farrand 588 (Sept. 12). James Madison seconded the motion, and his comment that any feared abuse of the power to levy duties on exports for inspection purposes was perhaps best guarded against by “the right in the Genl. Government to regulate trade be- tween State & State,” id., at 588–589 (emphasis added), 520US2 Unit: $U54 [09-10-99 19:36:35] PAGES PGT: OPIN 633Cite as: 520 U. S. 564 (1997) Thomas, J., dissenting nal many of the historical materials cited above, which indi- cate that the words used in the Import-Export Clause en- compassed, at the time the Constitution was written, both interstate and foreign trade.17 Indeed, the Woodruff major- ity itself felt compelled to note that its “research [had] extended” only so far as permitted by “the discussions on this subject, as they have come down to us from that time.” Id., at 136; see also id., at 134 (referring to the “imperfectly . . . preserved” discussions of the Continental Congress). Whatever the cause, the Woodruff Court’s analysis of the historical usage of the words overlooked many contrary examples and is thus not especially compelling. The second contention that the Woodruff Court used to bolster its textual argument was a policy concern based on an unnecessarily broad view of the Import-Export Clause’s prohibition. The Woodruff Court believed that the prohibi- tion on “Duties or Imposts on Exports or Imports” exempted imported articles, and the merchants who traded in them, from state taxation of any kind, at least so long as they re- mained in their original packages. Id., at 137. This view of the Clause’s prohibition would result in “the grossest in- justice,” said the Court, were the Clause to be read as apply- ing to “articles brought from one State into another,” for “[n]either the State nor the city which protects [the import merchant’s] life and property [could] make him contribute a dollar to support its government.” Ibid. 17 Farrand did not publish his volumes until 1911 (although the Woodruff Court did have available to it Madison’s notes, as well as the more perfunc- tory convention journal); Burnett’s Letters were published between 1921 and 1936; the Journals of the Continental Congress were published be- tween 1904 and 1937; volume 9 of The Papers of James Madison, in which Tench Coxe’s letter was first reprinted, was not published until 1975; and a useful, readily accessible collection of the various Anti-Federalist writ- ings was not available until 1981. This is not to say that the original documents reprinted in these volumes would not have been available to the Woodruff Court. But our ready access to, as well as our appreciation of, such documents has increased over time. 520US2 Unit: $U54 [09-10-99 19:36:35] PAGES PGT: OPIN 634 CAMPS NEWFOUND/OWATONNA, INC. v. TOWN OF HARRISON Thomas, J., dissenting Woodruff ’s broad reading of the Clause’s prohibition was explicitly adopted three years later in Low v. Austin, 13 Wall. 29 (1872), a case involving foreign imports. But we expressly overruled Low 20 years ago, in Michelin Tire Corp. v. Wages, 423 U. S. 276, 279 (1976), holding that the Import-Export Clause “cannot be read to accord imported goods preferential treatment that permits escape from uni- form taxes imposed without regard to foreign origin for services which the State supplies,” id., at 287; cf. United States v. International Business Machines Corp., 517 U. S. 843, 857–859 (1996) (distinguishing the Art. I, § 9, cl. 5, Ex- port Clause, which bars the United States from imposing any tax on exports, from the Import-Export Clause, which pro- hibits States from levying only duties and imposts). While Michelin and Low dealt with foreign imports, the expansive interpretation of the Import-Export Clause’s prohibition re- jected by Michelin was the same interpretation that gave the Woodruff Court pause and that seems to have been an impetus to its refusal to read the Clause as applying to im- ports from other States. Thus, after Michelin, the second argument the Woodruff Court used to bolster its weak tex- tual analysis—that it would be a gross injustice to prohibit States from levying any taxes on goods which were produced in other States—no longer has any force. There is nothing else of consequence to support the Wood- ruff Court’s holding. The only remaining argument made by the Woodruff majority was that it was “improbable” that the Convention would have permitted States to tax “im- ports” from other States merely with the assent of Congress, because the revenues that would accrue to Congress by granting such assent would prove too great a temptation for Congress to serve as a neutral arbiter regarding such taxes. Woodruff, supra, at 133. The Woodruff Court’s speculation was without historical support, however, and pales in com- parison to the substantial evidence described above regard- 520US2 Unit: $U54 [09-10-99 19:36:35] PAGES PGT: OPIN 635Cite as: 520 U. S. 564 (1997) Thomas, J., dissenting ing the meaning of the words in the Clause, see supra, at 621–624.18 In short, there is little in the Woodruff opinion to sustain its holding, and its weakness is even more evident given the contrary precedent rejected by the Woodruff Court. In Brown v. Maryland, 12 Wheat. 419, 449 (1827), Chief Justice Marshall, writing for the Court, suggested: “[W]e suppose the principles laid down in this case [namely, that a state license tax on importers of foreign articles was invalid both under the Import-Export Clause and the Act of Congress which authorizes importation] to apply equally to importa- tions from a sister State.” And just eight years before Woodruff, Chief Justice Taney, writing for a unanimous Court, struck down a stamp tax on bills of lading for gold being shipped from California to New York, holding that “the State tax in question is a duty upon the export of gold and silver, and consequently repugnant to the [Import- Export] clause in the Constitution.” Almy v. California, 24 How. 169, 175 (1861) (emphasis added). Chief Justice Marshall’s statement in Brown was merely dicta, of course, but the Woodruff majority’s rejection of the precedential force of Almy, based solely on its assertion that “[i]t seems to have escaped the attention of counsel on both sides, and of the Chief Justice who delivered the opinion, 18 Indeed, were I similarly to speculate, I would not find it “improbable” that the Convention would have trusted Congress to serve as a referee between individual States. Since many States would necessarily be harmed by a single State’s impost, the institutional checks would in all likelihood be sufficient to counter any revenue “temptation” Congress might have faced, especially given the extensive revenue authority granted directly to Congress in Art. I, § 8, cl. 1. My “speculation” is at least consistent with the recorded Convention debates. Roger Sherman proposed the requirement that any revenues raised by congressionally ap- proved state imposts go into the federal treasury not as a separate means of raising national revenues, but to ensure that the States not use a protec- tionist impost as a pretext for raising revenues from other States. See 2 Farrand 441–442 (Aug. 28). 520US2 Unit: $U54 [09-10-99 19:36:35] PAGES PGT: OPIN 638 CAMPS NEWFOUND/OWATONNA, INC. v. TOWN OF HARRISON Thomas, J., dissenting Michelin, 423 U. S., at 287 (“[I]mposts and duties . . . are essentially taxes on the commercial privilege of bringing goods into a country”). Because the tax at issue here is levied on real property—property that cannot possibly have been “imported”—the tax would not seem to fit within any of the commonly accepted definitions of “impost.” “Duty,” however, though frequently used like “impost” to denote “money paid for custom of goods,” An Universal Etymological English Dictionary, supra, does not appear to have been limited to taxes assessed at portside. See, e. g., S. Johnson, A Dictionary of the English Language (7th ed. 1785) (“Duty . . . Tax; impost; custom; toll. All the wines make their way through several duties and taxes, before they reach the port” (second emphasis added)); 2 Elliot 331 (John Williams, New York ratifying convention) (noting that Congress’ Art. I, § 8, power “extend[s] to duties on all kinds of goods, to tonnage and poundage of vessels, to duties on written instruments, newspapers, almanacs, &c”). In fact, “imposts” seems to have been viewed as a particular subclass of duties; the fact that the two words are used disjunctively in the Import-Export Clause suggests, therefore, that some- thing broader than portside customs was within the constitu- tional prohibition. Because of the somewhat ambiguous usage of the words “duty” and “impost,” Luther Martin inquired of their mean- ing during the Convention. James Wilson, a member of the king’s revenue; for that that he wins in the hundred, he loseth in the shire. Bacon’s Essays”); Barclay’s Universal English Dictionary 471 (B. Woodward rev. 1782) (“Impost. A toll; custom paid for goods or merchan- dise”); T. Blount, A Law-Dictionary (1670) (“Impost Tribute, Tallage, or Custom; but more particularly it is that Tax which the King receives for such merchandises as are imported into any Haven, from other Nations. . . . And it may be distinguished from Custom, which is rather that profit which the King raises from Wares exported; but they are some- times confounded”); cf. 7 Oxford English Dictionary 733 (2d ed. 1989) (“[I]mpost . . . A tax, duty, imposition, tribute; spec. a customs-duty levied on merchandise. Now chiefly Hist”). 520US2 Unit: $U54 [09-10-99 19:36:35] PAGES PGT: OPIN 639Cite as: 520 U. S. 564 (1997) Thomas, J., dissenting Committee on Detail, replied as follows: “[D]uties are appli- cable to many objects to which the word imposts does not relate. The latter are appropriated to commerce; the former extend to a variety of objects, as stamp duties &c.” 2 Far- rand 305 (emphasis in original); see also 2 Storing 54 (Luther Martin, in Maryland Convention, describing same colloquy); The Fallacies of the Freeman Detected by a Farmer, Free- man’s Journal, April 1788, in 3 Storing 186–187 (“Under the term duties [in Art. I, § 8], every species of indirect taxes is included, but it especially means the power of levying money upon printed books, and written instruments”). What seems likely from these descriptions is that a duty, though broader than an impost, was still a tax on particular goods or written instruments. It is important to note, moreover, that the Martin-Wilson colloquy is in reference to the Art. I, § 8, power given to Congress to levy duties. That power is broader than the prohibition on States found in Art. I, § 10, which reaches not all duties, but only those on “imports or exports.” 21 But even without this additional limitation, one kind of tax that duties almost certainly did not encompass were “direct” taxes, such as property taxes and poll taxes. See, e. g., The Federalist No. 12 (A. Hamilton) (distinguishing direct taxes, 21 See, e. g., DeWitt, Letter To the Free Citizens of the Commonwealth of Massachusetts, American Herald, Boston, Oct.–Dec. 1787, in 4 Storing 23 (noting that Congress “shall have the exclusive power of imposts and the duties on imports and exports, [and, implicitly, a concurrent] power of laying excises and other duties” (emphasis added)); Letters from The Fed- eral Farmer, Oct. 10, 1787, in 2 Storing 239 (distinguishing between “im- post duties, which are laid on imported goods [and] may usually be col- lected in a few seaport towns,” and “internal taxes, [such] as poll and land taxes, excises, duties on all written instruments, etc. [which] may fix themselves on every person and species of property in the community”); Essays of Brutus, Dec. 13, 1787 in 2 Storing 392–393 (same); see also 2 Farrand 589 (noting that Morris “did not consider the dollar per Hhd laid on Tobo. in Virga. as a duty on exportation, as no drawback would be allowed on Tobo. taken out of the Warehouse for internal consumption”). 520US2 Unit: $U54 [09-10-99 19:36:35] PAGES PGT: OPIN 640 CAMPS NEWFOUND/OWATONNA, INC. v. TOWN OF HARRISON Thomas, J., dissenting such as property taxes, from indirect taxes, such as imposts, duties, and excises); Freeman’s Journal, in 3 Storing 186–187 (“Under the term duties [in Art. I, § 8], every species of indi- rect taxes is included”); see also Michelin, supra, at 286, 290–291. The tax at issue here is nothing more than a tax on real property. Such taxes were classified as “direct” taxes at the time of the framing, and were not within the class of “indi- rect” taxes encompassed by the common understanding of the word “duties.” The amount of the Maine tax is tied to the value of the real property on which it is imposed, not to any particular goods, and not even to the number of campers served. It does not appear, therefore, to be a “duty” on “im- ports” in any sense of the words.22 Even when coupled with the tax exemption for certain Maine charities (which is, in truth, no different than a subsidy paid out of the State’s gen- eral revenues), Maine’s property tax would not seem to be a “Duty or Impost on Imports or Exports” within the meaning of the Import-Export Clause. Thus, were we to overrule Woodruff and apply the Import-Export Clause to this case, I would in all likelihood sustain this tax under that Clause as well. 22 Even were I to agree with the majority that a particular property tax may be a property tax in name only, see ante, at 574–575, and even were I to assume that travel across state lines to consume services in another State renders those traveling consumers “imports,” it is difficult to char- acterize the tax at issue here as a duty on imports. It is, rather, as the ma- jority recognizes, a “generally applicable state property tax.” Ante, at 567. Maine’s grant of an exemption from the tax to some charitable orga- nizations that dispense their charity primarily to Maine residents makes the tax something less than universal, but it does not make the tax, even in practical effect, one that is levied exclusively, or even primarily, on im- ports. See, e. g., New Energy Co. of Ind. v. Limbach, 486 U. S. 269 (1988); Maryland v. Louisiana, 451 U. S. 725, 756 (1981); License Cases, 5 How. 504, 576 (1847); cf. Davis v. Michigan Dept. of Treasury, 489 U. S. 803, 821 (1989) (Stevens, J., dissenting) (arguing, in an analogous context, that “the fact that a State may elect to grant a preference, or an exemption, to a small percentage of its residents does not make the tax discriminatory”).