‘Tonnage Clause’ at Issue in Supreme Court Decision Striking Down Ship Tax
The U.S. Supreme Court has struck down a tax on cargo ships imposed by the city of Valdez, Alaska, as a violation of the Constitution’s tonnage clause.
Valdez had justified the levy as a personal property tax on larger vessels—primarily large oil tankers—that transport at least $1 million in cargo. Challenger Polar Tankers Inc. had argued the tax effectively imposed a fee on certain ships for the privilege of entering its port, making the tax a constitutionally forbidden “duty of tonnage.”
The U.S. Supreme Court agreed with the tonnage tax argument in a majority opinion (PDF) by Justice Stephen G. Breyer. The opinion did not reach the issue of whether the tax violated the commerce and due process clauses. “We begin, and end, with Polar Tankers’ tonnage clause claim,” Breyer wrote.
