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Federal Tax to Support Harbor Maintenance Unconstitutional
Description Federal Harbor Maintenance Tax, imposed as a percentage of the value of goods exported, is in violation of the Export Clause of the Constitution, which prohibits taxes on exports. Congress may charge harbor use fees that are fairly related to the value of services received, which an ad valorem tax does not.
Topic International Law
Key Words Export Clause, Export Tax, Constitutionality
C A S E   S U M M A R Y
Facts The Harbor Maintenance Tax, imposed by Congress, requires all exporters, importers and domestic shippers to pay 0.125 percent of the value of commercial cargo shipped through U.S. ports. Collected by Customs, taxes are deposited in the Harbor Maintenance Trust Fund to support harbor development and maintenance. U.S. Shoe contested the constitutionality of the tax.
Court Decision Supreme Court unanimously upheld the decision of the Court of International Trade and of the Federal Circuit that the tax is unconstitutional. The Export Clause categorically bars Congress from imposing any tax on exports, but does not rule out a "user fee" designed to pay for use of government-supplied facilities. Such a percentage charge related to shipment value is a tax, not a bona fide user fee, which would fairly match the exporters' use of port facilities.
Citation U.S. v. United States Shoe Corp., 118 S.Ct. 1290 (1998)

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