Constitutional Law - The Supreme Court Upholds Montana's Coal Severance Tax
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Authors
Jacobs, Michael J.
Issue Date
1982
Volume
15
Issue
Type
Journal Article
Language
Keywords
Alternative Title
Abstract
INTRODUCTION|In Commonwealth Edison Co. v. Montana, the United States Supreme Court upheld the Montana severance tax against both commerce clause and supremacy clause challenges. Commonwealth Edison is the latest in a long line of cases dealing with attempts by a state to conserve or to take special advantage of its own natural energy supplies. This note will trace the historical development of the Court's treatment of state taxation schemes which affect interstate commerce. Also, the Commonwealth Edison case will be analyzed in light of the present trend of Supreme Court recognition of a broader state sovereignty.|In Commonwealth Edison, four Montana producers and eleven of their out-of-state utility customers challenged the constitutionality of Montana's coal severance tax. This tax, based on a percentage of the contract price, varies according to the value of the energy content and method of extraction of the coal. The tax rates range from twenty to thirty percent for surface-mined coal, to three to four percent for deep-mined coal. In addition, the greater the heating value of the coal, the higher the percentage rate of tax imposed. The maximum tax is thirty percent of the contract sales price. In 1976, the Montana State Constitution was amended to require that at least fifty percent of the revenue generated by the tax be placed in a permanent trust fund...
Description
Citation
15 Creighton L. Rev. 681 (1981-1982)
Publisher
Creighton University School of Law