US SUPREME COURT DECISIONS

Appellant Japanese shipping companies' vessels carry cargo containers which, like the ships, are owned by appellants, are based, registered, and subjected to property tax in Japan, and are used exclusively in foreign commerce. A number of appellants' containers were temporarily present in appellee county and cities in California, and appellees levied property taxes on the containers. The California Supreme Court upheld the tax as applied.

Held:

1. This Court has appellate jurisdiction under 28 U.S.C. § 1257(2), since the California Supreme Court sustained the tax, as applied, as against the contention that such application would violate the Commerce Clause and various treaties. Pp. 441 U. S. 440-441.

2. It is unnecessary to decide the broad proposition whether mere use of international routes is enough, under the "home port doctrine," to render an instrumentality immune from tax in a nondomiciliary State. The question here is a more narrow one, namely, whether instrumentalities of commerce that are owned, based, and registered abroad, and that are used exclusively in international commerce, may be subjected to apportioned ad valorem property taxation by a State. Pp. 441 U. S. 441-444.

3. While, under Complete Auto Transit, Inc. v. Brady, 430 U. S. 274, no impermissible burden on interstate commerce will be found if a state tax "is applied to an activity with a substantial nexus with the taxing State, is fairly apportioned, does not discriminate against interstate commerce, and is fairly related to the services provided by the State," id. at 430 U. S. 279, a more elaborate inquiry is necessary when a State seeks to tax the instrumentalities of foreign, rather than of interstate, commerce. In addition to answering the nexus, apportionment, and nondiscrimination questions posed in Complete Auto, a court must also inquire, first, whether the tax, notwithstanding apportionment, creates a substantial risk of international multiple taxation, and, second, whether the tax prevents the Federal Government from "speak[ing] with one voice when regulating commercial relations with foreign governments." Michelin Tire Corp. v. Wages, 423 U. S. 276, 423 U. S. 285. If a state tax contravenes either of these precepts, it is unconstitutional under the Commerce Clause. Pp. 441 U. S. 444-451. chanrobles.com-red

Page 441 U. S. 435

4. The California ad valorem property tax, as applied to appellants' shipping containers, is unconstitutional under the Commerce Clause, since it results in multiple taxation of the instrumentalities of foreign commerce, Moorman Mfg. Co. v. Bair, 437 U. S. 267, distinguished, and prevents this Nation from "speaking with one voice" in regulating foreign trade, and thus is inconsistent with Congress' power to "regulate Commerce with foreign Nations." Pp. 441 U. S. 451-457.

20 Cal.3d 180, 571 P.2d 254, reversed.

BLACKMUN, J., delivered the opinion of the Court, in which BURGER, C.J.,and BRENNAN, STEWART, WHITE, MARSHALL, POWELL, and STEVENS, JJ., joined. REHNQUIST, J., filed a dissenting statement, post, p. 441 U. S. 457.