The Dormant Commerce Clause is a principle providing that state and local laws that place an undue burden on interstate commerce are unconstitutional. Although there is no specific provision in the U.S. Constitution prohibiting states from passing laws that place undue burden on interstate commerce, the U.S. Supreme Court has reasoned that such restrictions on states can be inferred as the Constitution has granted to the U.S. Congress the sole authority to regulate interstate commerce (Article 1, § 8).
C&A Carbone, Inc. v. Clarkstown, 511 U.S. 383 (1994)
The scope of the dormant Commerce Clause is a judicial creation. On its face, the Clause provides only that “[t]he Congress shall have Power . . . To regulate Commerce . . . among the several States . . . .” U. S. Const., Art. I, § 8, cl. 3. This Court long ago concluded, however, that the Clause not only empowers Congress to regulate interstate commerce, but also imposes limitations on the States in the absence of congressional action:
“This principle that our economic unit is the Nation, which alone has the gamut of powers necessary to control of the economy, including the vital power of erecting customs barriers against foreign competition, has as its corollary that the states are not separable economic units. . . . [W]hat is ultimate is the principle that one state in its dealings with another may not place itself in a position of economic isolation.” H. P. Hood & Sons, 402*402 Inc. v. Du Mond, 336 U. S. 525, 537-538 (1949) (internal quotation marks and citations omitted).
Our decisions therefore hold that the dormant Commerce Clause forbids States and their subdivisions to regulate interstate commerce.
We have generally distinguished between two types of impermissible regulations. A facially nondiscriminatory regulation supported by a legitimate state interest which incidentally burdens interstate commerce is constitutional unless the burden on interstate trade is clearly excessive in relation to the local benefits. See Brown-Forman Distillers Corp. v. New York State Liquor Authority, 476 U. S. 573, 579 (1986); Pike v. Bruce Church, Inc., 397 U. S. 137, 142 (1970). Where, however, a regulation “affirmatively” or “clearly” discriminates against interstate commerce on its face or in practical effect, it violates the Constitution unless the discrimination is demonstrably justified by a valid factor unrelated to protectionism. See Wyoming v.Oklahoma, 502 U. S. 437, 454 (1992); Maine v. Taylor, 477 U. S. 131, 138 (1986). Of course, there is no clear line separating these categories. “In either situation the critical consideration is the overall effect of the statute on both local and interstate activity.” Brown-Forman Distillers , supra, at 579.
Quill Corp. v. North Dakota, 504 U.S. 298 (1992)
Article I, § 8, cl. 3, of the Constitution expressly authorizes Congress to “regulate Commerce with foreign Nations, and among the several States.” It says nothing about the protection of interstate commerce in the absence of any action by Congress. Nevertheless, as Justice Johnson suggested in his concurring opinion in Gibbons v. Ogden, 9 Wheat. 1, 231-232, 239 (1824), the Commerce Clause is more than an affirmative grant of power; it has a negative sweep as well. The Clause, in Justice Stone’s phrasing, “by its own force” prohibits certain state actions that interfere with interstate commerce. South Carolina State Highway Dept. v. Barnwell Brothers, Inc., 303 U. S. 177, 185 (1938).
Our interpretation of the “negative” or “dormant” Commerce Clause has evolved substantially over the years, particularly as that Clause concerns limitations on state taxation powers. See generally P. Hartman, Federal Limitations on State and Local Taxation §§ 2:9-2:17 (1981). Our early cases, beginning with Brown v.Maryland, 12 Wheat. 419 (1827), swept broadly, and in Leloup v. Port of Mobile,127 U. S. 640, 648 (1888), we declared that “no State has the right to lay a tax on interstate commerce in any form.” We later narrowed that rule and distinguished between direct burdens on interstate commerce, which were prohibited, and indirect burdens, which generally were not. See, e. g., Sanford v. Poe, 69 F. 546 (CA6 1895), aff’d sub nom. Adams Express Co. v. Ohio State Auditor, 165 U. S. 194, 220 (1897). Western Live Stock v. Bureau of Revenue, 303 U. S. 250, 256-258 (1938), and subsequent decisions rejected this formal, categorical analysis and adopted a “multiple-taxation doctrine” that focused not on whether a tax was “direct” or “indirect” but rather on whether a tax subjected interstate commerce to a risk of multiple taxation. However, in Freeman v. Hewit, 329 U. S. 249, 256 (1946),we embraced again the formal distinction between direct and indirect taxation, invalidating Indiana’s imposition of a gross receipts tax on a 310*310 particular transaction because that application would “impos[e] a direct tax on interstate sales.” Most recently, in Complete Auto Transit, Inc. v. Brady, 430 U. S., at 285, we renounced the Freeman approach as “attaching constitutional significance to a semantic difference.” We expressly overruled one of Freeman `s progeny, Spector Motor Service, Inc. v. O’Connor, 340 U. S. 602 (1951), which held that a tax on “the privilege of doing interstate business” was unconstitutional, while recognizing that a differently denominated tax with the same economic effect would not be unconstitutional. Spector, as we observed in Railway Express Agency, Inc. v.Virginia, 358 U. S. 434, 441 (1959), created a situation in which “magic words or labels” could “disable an otherwise constitutional levy.” Complete Autoemphasized the importance of looking past “the formal language of the tax statute [to] its practical effect,” 430 U. S., at 279, and set forth a four-part test that continues to govern the validity of state taxes under the Commerce Clause.