Polar Tankers, Inc. v. City of Valdez, Alaska

(Slip Opinion) OCTOBER TERM, 2008 1

Syllabus

NOTE: Where it is feasible, a syllabus (headnote) will be released, as is

being done in connection with this case, at the time the opinion is issued.

The syllabus constitutes no part of the opinion of the Court but has been

prepared by the Reporter of Decisions for the convenience of the reader.

See United States v. Detroit Timber & Lumber Co., 200 U. S. 321, 337.

SUPREME COURT OF THE UNITED STATES

Syllabus

POLAR TANKERS, INC. v. CITY OF VALDEZ, ALASKA

CERTIORARI TO THE SUPREME COURT OF ALASKA

No. 08–310. Argued April 1, 2009—Decided June 15, 2009

A Valdez, Alaska, ordinance that imposes a personal property tax on

certain boats and vessels contains exceptions which, in effect, largely

limit its applicability to large oil tankers. Petitioner Polar Tankers,

Inc., whose vessels transport crude oil from the Port of Valdez to re

fineries in other States, challenged the ordinance in state court,

claiming (1) that the tax was unconstitutional under Art. I, §10, cl. 3,

which forbids a “State . . . without the Consent of Congress, [to] lay

any Duty of Tonnage,” and (2) that the tax’s value-allocation method

violated the Commerce and Due Process Clauses. The court rejected

the Tonnage Clause claim, but accepted the Commerce Clause and

Due Process Clause claim. On appeal, the State Supreme Court up

held the tax, finding that because it was a value-based property tax,

the tax was not a duty of tonnage. The State Supreme Court also

held the allocation method was fair and thus valid under the Com

merce and Due Process Clauses.

Held: The judgment is reversed, and the case is remanded.

182 P. 3d 614, reversed and remanded.

JUSTICE BREYER delivered the opinion of the Court with respect to

Parts I, II–A, and II–B–1, concluding that Valdez’s tax violates the

Tonnage Clause. Consequently, Polar Tankers’ alternative Com

merce Clause and Due Process Clause arguments need not be consid

ered. Pp. 3–8.

(a) This Court has consistently interpreted the language of the

Tonnage Clause in light of its purpose, which mirrors the intent of

other constitutional provisions that seek to restrain the States from

exercising the taxing power in a way that is injurious to the interests

of other States. The Clause seeks to prevent States from nullifying

Art. I, §10, cl. 2’s prohibition against import and export duties by tax

ing “the vessels transporting the merchandise.” Clyde Mallory Lines

2 POLAR TANKERS, INC. v. CITY OF VALDEZ

Syllabus

v. Alabama ex rel. State Docks Comm’n, 296 U. S. 261, 265. It also

reflects an effort to diminish a State’s ability to obtain tax advan

tages based on its favorable geographic position. Because the Clause

forbids a State to “do that indirectly which she is forbidden . . . to do

directly,” Passenger Cases, 7 How. 283, 458, the “prohibition against

tonnage duties has been deemed to embrace all taxes and duties re

gardless of their name or form, and even though not measured by the

tonnage of the vessel, which operate to impose a charge for the privi

lege of entering, trading in, or lying in a port,” Clyde Mallory Lines,

supra, at 265–266. Pp. 3–6.

(b) This case lies at the heart of what the Tonnage Clause forbids.

The ordinance seems designed to impose “a charge for the privilege of

entering, trading in, or lying in a port.” The tax applies almost ex

clusively to oil tankers, but to no other form of personal property. An

oil tanker can be subject to the tax based on a single entry into the

port. Moreover, the tax is closely correlated with cargo capacity.

Contrary to Valdez’s argument, the fact that the tax is designed to

raise revenue for general municipal services argues for, not against,

application of the Clause. Pp. 6–8.

JUSTICE BREYER, joined by JUSTICE SCALIA, JUSTICE KENNEDY, and

JUSTICE GINSBURG, rejected, in Part II–B–2, Valdez’s claim that, under

State Tonnage Tax Cases, 12 Wall. 204, its tax is “not within the pro

hibition of the Constitution,” because it is “levied . . . upon ships . . .

as property, based on a valuation of the same as property,” id., at 213

(emphasis deleted). This Court later made clear that the “prohibi

tion” against tonnage duties “comes into play” where vessels “are not

taxed in the same manner as the other property of the citizens,”

Transportation Co. v. Wheeling, 99 U. S. 273, 284. This qualification,

important in light of the Clause’s purpose, means that, in order to

fund services by taxing ships, a State must also impose similar taxes

upon other businesses. Valdez fails to satisfy this requirement. The

Court can find little, if any, other personal property that Valdez

taxes. Because its value-related property tax on mobile homes, trail

ers, and recreational vehicles applies only if they are “affixed” to a

particular site, it taxes those vehicles as a form of real, not personal,

property. Valdez also claims that its ship tax is simply another form

of a value-based tax on oil-related property provided by state law.

But Valdez’s tax, a purely a municipal tax, differs from the tax on

other oil-related property, which is primarily a state-level tax, in sev

eral ways. As a result of these differences, an ordinary oil-related

business finding the tax on its movable property too burdensome

must complain to the State, which is in charge of setting the manner

of assessment and valuation. At the same time, an oil tanker finding

its vessel tax too burdensome must complain to Valdez, for the State

Cite as: 557 U. S. ____ (2009) 3

Syllabus

has nothing to do with that tax’s rate, valuation, or assessment.

There is also no effective electorate-related check on Valdez’s vessel

taxing power comparable to the check available when a property tax

is more broadly imposed. Valdez’s property tax hits only ships; it is

not constrained by any need to treat ships and other business prop

erty alike. Thus, Valdez’s tax lacks the safeguards implied by this

Court’s statements that a property tax on ships escapes the Tonnage

Clause’s scope only when that tax is imposed upon ships “in the same

manner” as it is imposed on other forms of property. Pp. 8–13.

THE CHIEF JUSTICE, joined by JUSTICE THOMAS, agreed that Valdez’s

tax is unconstitutional, but concluded that the city’s argument that its

tax may be sustained as a property tax similar to ones the city imposes

on other property should be rejected because an unconstitutional tax on

maritime commerce does not become permissible when bundled with

taxes on other activities or property. Pp. 1–3.

JUSTICE ALITO agreed that Valdez’s tax is unconstitutional, but con

cluded that the tax is an unconstitutional duty of tonnage even if the

Tonnage Clause permits a true, evenhanded property tax to be ap

plied to vessels. P. 1.

BREYER, J., announced the judgment of the Court and delivered the

opinion of the Court with respect to Parts I, II–A, and II–B–1, in which

SCALIA, KENNEDY, GINSBURG, and ALITO, JJ., joined, and an opinion

with respect to Part II–B–2, in which SCALIA, KENNEDY, and GINSBURG,

JJ., joined. ROBERTS, C. J., filed an opinion concurring in part and con

curring in the judgment, in which THOMAS, J., joined. ALITO, J., filed an

opinion concurring in part and concurring in the judgment. STEVENS,

J., filed a dissenting opinion, in which SOUTER, J., joined.

Cite as: 557 U. S. ____ (2009) 1

Opinion of the Court

NOTICE: This opinion is subject to formal revision before publication in the

preliminary print of the United States Reports. Readers are requested to

notify the Reporter of Decisions, Supreme Court of the United States, Wash­

ington, D. C. 20543, of any typographical or other formal errors, in order

that corrections may be made before the preliminary print goes to press.

SUPREME COURT OF THE UNITED STATES

_________________

No. 08–310

_________________

POLAR TANKERS, INC., PETITIONER v. CITY OF

VALDEZ, ALASKA

ON WRIT OF CERTIORARI TO THE SUPREME COURT OF ALASKA

[June 15, 2009]

JUSTICE BREYER announced the judgment of the Court

and delivered the opinion of the Court with respect to

Parts I, II–A, and II–B–1, and an opinion with respect to

Part II–B–2, in which JUSTICE SCALIA, JUSTICE KENNEDY,

and JUSTICE GINSBURG join.

The Constitution forbids a “State . . . without the Con­

sent of Congress, [to] lay any Duty of Tonnage.” Art. I,

§10, cl. 3. The city of Valdez, Alaska, has enacted an

ordinance that imposes a personal property tax upon the

value of large ships that travel to and from that city. We

hold that the ordinance violates the Clause.

I

In 1999, the city of Valdez, Alaska (City), adopted an

ordinance imposing a personal property tax upon “[b]oats

and vessels of at least 95 feet in length” that regularly

travel to the City, are kept or used within the City, or

which annually take on at least $1 million worth of cargo

or engage in other business transactions of comparable

value in the City. Valdez Ordinance No. 99–17 (1999)

(codified as Valdez Municipal Code §3.12.020 (2008)). The

ordinance contains exceptions that, in effect, limit the

tax’s applicability primarily to large oil tankers. Ibid.

2 POLAR TANKERS, INC. v. CITY OF VALDEZ

Opinion of the Court

And the City applies the tax in accordance with a value­

allocation system that adjusts the amount owed down­

wards insofar as the tankers spend time in other ports.

Valdez, Alaska Resolution No. 00–15, App. to Pet. for Cert.

53a–56a.

Polar Tankers, Inc., a subsidiary of ConocoPhillips,

owns vessels that transport crude oil from a terminal in

the Port of Valdez (located at the southern end of the

Trans Alaska Pipeline System) to refineries in California,

Hawaii, and Washington. In August 2000, Polar Tankers

filed a lawsuit in Alaska Superior Court challenging the

tax as unconstitutional. Polar Tankers argued that the

tax effectively imposed a fee on certain vessels for the

privilege of entering the port; hence it amounted to a

constitutionally forbidden “Duty of Tonnage.” It also

argued that the tax calculation method (as applied to

vessels with a tax situs elsewhere) violated the Commerce

and Due Process Clauses by failing to take account of the

time a ship spent at sea or being serviced or repaired.

Polar Tankers said that the method thereby overstated

the percentage of the ship’s total earning capacity rea­

sonably allocated to time spent in the Port of Valdez.

The Alaska Superior Court rejected the Tonnage

Clause claim, but it accepted the Commerce Clause and

Due Process Clause claim. And, for that reason, it held

the tax unconstitutional. On appeal, the Alaska Supreme

Court, rejecting both claims, upheld the tax. In respect to

the Tonnage Clause claim, the Supreme Court noted that

Valdez’s tax was a value-based property tax designed to

pay for “services available to all taxpayers in the city,”

including Polar Tankers; and it concluded that “a charge

based on the value of property is not a duty of tonnage.”

182 P. 3d 614, 623 (2008) (citing Transportation Co. v.

Wheeling, 99 U. S. 273 (1879)). In respect to the Com­

merce Clause and Due Process Clause claim, the Supreme

Court held that Valdez’s allocation method was fair, hence

Cite as: 557 U. S. ____ (2009) 3

Opinion of the Court

constitutional. 182 P. 3d, at 617–622.

Polar Tankers asked us to review the Alaska Supreme

Court’s determination. And we granted its petition in

order to do so.

II

A

We begin, and end, with Polar Tankers’ Tonnage

Clause claim. We hold that Valdez’s tax is unconstitu­

tional because it violates that Clause. And we conse­

quently need not consider Polar Tankers’ alternative

Commerce Clause and Due Process Clause argument.

When the Framers originally wrote the Tonnage

Clause, the words it uses, “Duty of Tonnage,” referred in

commercial parlance to “a duty” imposed upon a ship,

which duty varies according to “the internal cubic capacity

of a vessel,” i.e., its tons of carrying capacity. Clyde Mal

lory Lines v. Alabama ex rel. State Docks Comm’n, 296

U. S. 261, 265 (1935) (citing Inman S. S. Co. v. Tinker, 94

U. S. 238, 243 (1877)); see also T. Cooley, Constitutional

Limitations 596 (6th ed. 1890). Over a century ago, how­

ever, this Court found that the Framers intended those

words to refer to more than “a duty” that sets a “certain

rate on each ton” of capacity. Steamship Co. v. Portwar

dens, 6 Wall. 31, 34 (1867).

The Court over the course of many years has consis­

tently interpreted the language of the Clause in light of its

purpose, a purpose that mirrors the intent of other consti­

tutional provisions which, like the Tonnage Clause itself,

seek to “restrai[n] the states themselves from the exercise”

of the taxing power “injuriously to the interests of each

other.” J. Story, Commentaries on the Constitution of the

United States §497, p. 354 (1833) (abridged version).

Article I, §10, cl. 2, for example, forbids States to “lay any

Imposts or Duties on Imports or Exports.” It thereby

seeks to prevent states with “convenient ports” from plac­

4 POLAR TANKERS, INC. v. CITY OF VALDEZ

Opinion of the Court

ing other States at an economic disadvantage by laying

levies that would “ta[x] the consumption of their

neighbours.” 3 Records of the Federal Convention of 1787,

pp. 542, 519 (M. Farrand rev. 1966) (reprinting James

Madison, Preface to Debates in the Convention of 1787

and letter from James Madison to Professor Davis, 1832).

The coastal States were not to “take advantage of their

favorable geographical position in order to exact a price for

the use of their ports from the consumers dwelling in less

advantageously situated parts of the country.” Youngs

town Sheet & Tube Co. v. Bowers, 358 U. S. 534, 556–557

(1959) (Frankfurter, J., dissenting).

In writing the Tonnage Clause, the Framers recognized

that, if “the states had been left free to tax the privilege of

access by vessels to their harbors the prohibition against

duties on imports and exports could have been nullified by

taxing the vessels transporting the merchandise.” Clyde

Mallory Lines, supra, at 265. And the Court has under­

stood the Tonnage Clause as seeking to prevent that

nullification. See Steamship Co., supra, at 34–35; see also

Packet Co. v. Keokuk, 95 U. S. 80, 87 (1877); Gibbons v.

Ogden, 9 Wheat. 1, 202 (1824). It has also understood the

Clause as reflecting an effort to diminish a State’s ability

to obtain certain geographical vessel-related tax advan­

tages whether the vessel in question transports goods

between States and foreign nations or, as here, only be­

tween the States. Compare Inman, supra (invalidating a

fee applied to ships engaged in foreign commerce), with

Steamship Co., supra (invalidating a tax applied to ships

engaged in interstate commerce).

Interpreting the Clause in light of its “intent,” id., at

34, the Court has read its language as forbidding a State

to “do that indirectly which she is forbidden . . . to do

directly.” Passenger Cases, 7 How. 283, 458 (1849). Thus,

the Court has said that the Clause, which literally forbids

a State to “levy a duty or tax . . . graduated on the ton­

Cite as: 557 U. S. ____ (2009) 5

Opinion of the Court

nage,” must also forbid a State to “effect the same purpose

by merely changing the ratio, and graduating it on the

number of masts, or of mariners, the size and power of the

steam-engine, or the number of passengers which she

carries.” Id., at 458–459. A State cannot take what would

otherwise amount to a tax on the ship’s capacity and evade

the Clause by calling that tax “a charge on the owner or

supercargo,” thereby “justify[ing] this evasion of a great

principle by producing a dictionary or a dictum to prove

that a ship-captain is not a vessel, nor a supercargo an

import.” Id., at 459.

The Court has consequently stated that the Tonnage

Clause prohibits, “not only a pro rata tax . . ., but any duty

on the ship, whether a fixed sum upon its whole tonnage,

or a sum to be ascertained by comparing the amount of

tonnage with the rate of duty.” Steamship Co., supra, at

35. And, summarizing earlier cases while speaking for a

unanimous Court, Justice Stone concluded that the “pro­

hibition against tonnage duties has been deemed to em­

brace all taxes and duties regardless of their name or

form, and even though not measured by the tonnage of the

vessel, which operate to impose a charge for the privilege

of entering, trading in, or lying in a port.” Clyde Mallory

Lines, supra, at 265–266. Cf. Cannon v. New Orleans, 20

Wall. 577 (1874) (invalidating a tax imposed on ships

entering a port, which tax was graduated based on the

ships’ capacity and length of stay); Inman, supra (invali­

dating a fee imposed on ships of a certain capacity that

entered a port); Steamship Co., supra (invalidating a flat

tax imposed on every ship that entered a port, regardless

of the ship’s capacity).

Although the Clause forbids all charges, whatever their

form, that impose “a charge for the privilege of entering,

trading in, or lying in a port,” nothing in the history of the

adoption of the Clause, the purpose of the Clause, or this

Court’s interpretation of the Clause suggests that it oper­

6 POLAR TANKERS, INC. v. CITY OF VALDEZ

Opinion of the Court

ates as a ban on any and all taxes which fall on vessels

that use a State’s port, harbor, or other waterways. See

post, at 1–2 (ROBERTS, C. J., concurring in part and con­

curring in judgment). Such a radical proposition would

transform the Tonnage Clause from one that protects

vessels, and their owners, from discrimination by seaboard

States, to one that gives vessels preferential treatment

vis-à-vis all other property, and its owners, in a seaboard

State. The Tonnage Clause cannot be read to give vessels

such “preferential treatment.” Cf. Michelin Tire Corp. v.

Wages, 423 U. S. 276, 287 (1976) (noting, in a related

context, that the Import-Export Clause “cannot be read to

accord imported goods preferential treatment that permits

escape from uniform taxes imposed without regard to

foreign origin for services which the State supplies”). See

also infra this page and 7–11.

B

1

Does the tax before us impose “a charge for the privilege

of entering, trading in, or lying in a port”? Certainly, the

ordinance that imposes the tax would seem designed to do

so. It says that the tax applies to ships that travel to (and

leave) the City’s port regularly for business purposes, that

are kept in the City’s port, that take on more than $1

million in cargo in that port, or that are involved in busi­

ness transactions in that amount there. In practice, the

tax applied in its first year to 28 vessels, of which 24 were

oil tankers, 3 were tugboats, and 1 was a passenger cruise

ship. App. 53. The ordinance applies the tax to no other

form of personal property. See Valdez Municipal Code

§3.12.030(A)(2) (2008).

Moreover, the tax’s application and its amount depend

upon the ship’s capacity. That is to say, the tax applies

only to large ships (those at least 95 feet in length), while

exempting small ones. See §3.12.020(A)(1).

Cite as: 557 U. S. ____ (2009) 7

Opinion of the Court

Nor can Valdez escape application of the Clause by

claiming that the ordinance imposes, not a duty or a tax,

but a fee or a charge for “services rendered” to a “vessel,”

such as “pilotage,” “wharfage,” “medical inspection,” the

“use of locks,” or the like. Clyde Mallory Lines, 296 U. S.,

at 266; see also Inman, 94 U. S., at 243. To the contrary,

the ordinance creates a tax designed to raise revenue used

for general municipal services. See 182 P. 3d, at 623;

Valdez, Alaska Resolution No. 00–15, App. to Pet. for Cert.

53a–56a. Tonnage Clause precedent makes clear that,

where a tax otherwise qualifies as a duty of tonnage, a

general, revenue-raising purpose argues in favor of, not

against, application of the Clause. See Steamship Co., 6

Wall., at 34.

This case lies at the heart of what the Tonnage Clause

forbids. The ordinance applies almost exclusively to oil

tankers. And a tax on the value of such vessels is closely

correlated with cargo capacity. Because the imposition of

the tax depends on a factor related to tonnage and that

tonnage-based tax is not for services provided to the ves­

sel, it is unconstitutional.

The dissent contends that the tax does not operate as “a

charge for the privilege of entering, trading in, or lying in

a port,” Clyde Mallory Lines, supra, at 265–266—that is,

as an impermissible tonnage duty—because Valdez levies

its tax only upon vessels that meet a “tax situs” require­

ment. See post, at 6–7 (opinion of STEVENS, J.). But in

this case, the distinction the dissent draws between ton­

nage duties and property taxes is a distinction without a

difference. That is because to establish a tax situs under

the tax challenged here, an oil tanker needs only to enter

the port and load oil worth more than $1 million. And, as

Polar Tankers notes, oil tankers routinely carry millions of

barrels of oil at a time worth well in excess of $1 million.

Reply Brief for Petitioner 6. Thus, by virtue of a single

entry into the port, “trading” once in that port, or “lying”

8 POLAR TANKERS, INC. v. CITY OF VALDEZ

Opinion of the Court

Opinion of BREYER, J.

once in that port, a tanker automatically establishes a tax

situs in Valdez. No one claims that this basis for estab­

lishing a tax situs is insufficient under the Constitution.

After all, a nondomiciliary jurisdiction may constitution­

ally tax property when that property has a “substantial

nexus” with that jurisdiction, and such a nexus is estab­

lished when the taxpayer “avails itself of the substantial

privilege of carrying on business” in that jurisdiction. See

Japan Line, Ltd. v. County of Los Angeles, 441 U. S. 434,

441–445 (1979) (internal quotation marks omitted); Mobil

Oil Corp. v. Commissioner of Taxes of Vt., 445 U. S. 425,

437 (1980) (same); Quill Corp. v. North Dakota, 504 U. S.

298, 312 (1992). Here, the City identified the 28 vessels

that were subject to the tax in the year 2000. But the City

fails to point to a single oil tanker, or any vessel greater

than 95 feet in length, that both entered the port and

failed to establish a tax situs. See App. 53. What else is

needed to show that a tax characterized as one on property

may nevertheless function as a “charge for the privilege of

entering . . . a port”?

2

Valdez does not deny that its tax operates much like a

duty applied exclusively to ships. But, like the Alaska

Supreme Court, it points to language in an earlier Court

opinion explicitly stating that “[t]axes levied . . . upon

ships . . . as property, based on a valuation of the same as

property, are not within the prohibition of the Constitu­

tion.” State Tonnage Tax Cases, 12 Wall. 204, 213 (1871)

(emphasis deleted); cf. 182 P. 3d, at 622, and n. 43. Valdez

says that its tax is just such a value-related tax on per­

sonal property and consequently falls outside the scope of

the Clause. Brief for Respondent 16–23.

Our problem with this argument, however, is that the

Court later made clear that the Clause does not apply to

“taxation” of vessels “as property in the same manner as

Cite as: 557 U. S. ____ (2009) 9

Opinion of the Court

Opinion of BREYER, J.

other personal property owned by citizens of the State.”

“[W]here” vessels “are not taxed in the same manner as

the other property of the citizens,” however, the “prohibi­

tion . . . comes into play.” Wheeling, 99 U. S., at 284 (em­

phasis added).

Viewed in terms of the purpose of the Clause, this

qualification is important. It means that, in order to fund

services by taxing ships, a State must also impose similar

taxes upon other businesses. And that fact may well

operate as a check upon a State’s ability to impose a tax on

ships at rates that reflect an effort to take economic ad­

vantage of the port’s geographically based position. After

all, the presence of other businesses subject to the tax,

particularly businesses owned and operated by state

residents, threatens political concern and a potential

ballot-box issue, were rates, say, to get out of hand. See

Cooley v. Board of Wardens of Port of Philadelphia ex rel.

Soc. for Relief of Distressed Pilots, 12 How. 299, 315

(1852); cf. South Carolina Highway Dept. v. Barnwell

Brothers, Inc., 303 U. S. 177, 185, n. 2 (1938) (when state

action affecting interstate commerce “is of such a charac­

ter that its burden falls principally upon those without the

state, legislative action is not likely to be subjected to

those political restraints which are normally exerted on

legislation where it affects adversely some interests within

the state”).

Moreover, and at the very least, a “same manner”

requirement helps to assure that a value-related property

tax differs significantly from a graduated tax on a ship’s

capacity and that the former is not simply a redesignation

of the latter. See Packet Co., 95 U. S., at 88 (“ ‘It is the

thing and not the name that is to be considered’ ” (quoting

Cooley, supra, at 314)).

In our view, Valdez fails to satisfy this requirement. It

does not tax vessels “in the same manner as other per­

sonal property” of those who do business in Valdez.

10 POLAR TANKERS, INC. v. CITY OF VALDEZ

Opinion of the Court

Opinion of BREYER, J.

Wheeling, supra, at 284. We can find little, if any, other

personal property that it taxes. According to the State of

Alaska, Valdez specifically exempts from property taxa­

tion motor vehicles, aircraft, and other vehicles, as well as

business machinery. See Dept. of Community and Eco­

nomic Development, Division of Community and Business

Development, Office of the State Assessor, Alaska Taxable

2001, p. 20 (Jan. 2002), (Table 4), online at

http://www.commerce.state.ak.us/dca/Taxable/AKTaxable2

001.pdf (as visited June 10, 2009, and available in Clerk of

Court’s case file).

We concede, as Valdez points out, that a different

Valdez ordinance imposes what it characterizes as a

value-based property tax on mobile homes, trailers, and

recreational vehicles. Valdez Municipal Code §3.12.022

(2008); Brief for Respondent 24–25. But that same ordi­

nance exempts those vehicles from its property tax unless

they are “affixed” to a particular site. Hence, whatever

words the City uses to describe the tax imposed on mobile

homes, trailers, and recreational vehicles, Valdez in fact

taxes those vehicles only when they constitute a form, not

of personal property, but of real property (like a home).

See §3.12.022 (providing that “trailers and mobile homes”

are “subject to taxation” when they are classified as “real

property”).

Valdez also points to a separate City ordinance that

imposes a tax “on all taxable property taxable under

Alaska Statutes Chapter 43.56.” §3.28.010 (2008). The

Alaska Statutes Chapter identifies as taxable “aircraft

and motor vehicles” the operation of which “relates to” the

“exploration for, production of, or pipeline transportation

of gas or unrefined oil.” Alaska Stat. §43.56.210 (2008).

Valdez claims that its tax on ships is simply another form

of this value-related tax on oil-related property.

Valdez did not make this claim in the lower courts,

however. Nor does the State of Alaska (which has filed a

Cite as: 557 U. S. ____ (2009) 11

Opinion of the Court

Opinion of BREYER, J.

brief in support of Valdez) support this particular claim.

Brief for State of Alaska et al. as Amici Curiae 32–33.

Thus, we lack the State’s explanation of just how the tax

on oil-related vehicles works. And, lacking precise infor­

mation, we might ordinarily decline to consider this claim.

See, e.g., Clingman v. Beaver, 544 U. S. 581, 597–598

(2005).

Nonetheless, the parties have argued the matter in

their briefs here; and our deciding the matter now will

reduce the likelihood of further litigation. We may make

exceptions to our general approach to claims not raised

below; and for these reasons we shall do so. See Granfi

nanciera, S. A. v. Nordberg, 492 U. S. 33, 39 (1989).

Addressing the claim on the basis of the briefs and

what we have gleaned from publicly available sources, we

note that Valdez’s ship tax differs from the tax on other

oil-related property in several ways. The former is a

purely municipal tax. The City imposes it; the City alone

determines what property is subject to the tax; the City

establishes the rate of taxation; the City values the prop­

erty; the City resolves evaluation disputes; the City issues

assessment notices; the City collects the tax; and the City

(as far as we can tell) keeps the revenue without any

restrictions. See Valdez Municipal Code §3.12.020(A)(1)

(2008); §3.12.060; §3.12.020(B); §§3.12.090–3.12.100;

§3.12.210(A) (2001); Valdez, Alaska Resolution No. 00–15,

App. to Pet. for Cert. 53a–56a.

The latter is primarily a state-level tax. The State

imposes it. In fact, Valdez’s city manager characterized

the oil-property tax as involving “property taxed by the

State . . . and [raising revenue] subsequently shared with

the City.” App. 46 (affidavit of Dave Dengel). In addition,

the State determines the type of property subject to the

tax; the State forbids the municipality to exempt any

property it designates as taxable; the State regulates the

rate of taxation that may be applied to property it desig­

12 POLAR TANKERS, INC. v. CITY OF VALDEZ

Opinion of the Court

Opinion of BREYER, J.

nates as taxable; the State issues assessment notices; the

State resolves evaluation disputes; and the State, while

permitting the municipality to set the precise tax rate and

to collect the tax, imposes certain kinds of limits upon the

amount of the resulting revenue that the municipality

may raise that, in effect, provide a check against excessive

rates. See Alaska Stat. §43.56.010(b) (2008);

§43.56.210(5)(A); 15 Alaska Admin. Code §56.010 (2009);

§§56.015–56.040; Alaska Stat. §§29.45.080(b), (c) (2008);

§43.56.010(c).

These differences matter. For one thing, they mean that

any ordinary oil-related business, other than ships, that

finds the tax imposed upon its movable property too bur­

densome must complain to the State, not to the City, for it

is the State that is in charge of setting the manner of

assessment and valuation. At the same time, an oil

tanker that finds the vessel tax too burdensome must

complain to the City, not to the State, for the State has

nothing to do with the rate, valuation, or assessment of

that particular tax.

For another thing, they mean that there is no effective

electorate-related check (comparable to the check avail­

able where a property tax is more broadly imposed) upon

the City’s vessel-taxing power. The City’s property tax

hits ships and only ships; it is not constrained by any need

to treat ships and other business property alike. Taken

together, these two considerations mean that Valdez’s

property tax lacks the safeguards implied by this Court’s

statements that a property tax on ships escapes the scope

of the Tonnage Clause only when that tax is imposed upon

ships “in the same manner” as it is imposed on other forms

of property.

THE CHIEF JUSTICE contends that a State may never

impose a property tax on a vessel belonging to a citizen of

another State, even if that vessel is taxed in the “same

manner” as other personal property in the taxing state.

Cite as: 557 U. S. ____ (2009) 13

Opinion of the Court

Opinion of BREYER, J.

See post, at 1–2 (opinion concurring in part and concurring

in judgment). But, as THE CHIEF JUSTICE concedes, this

Court held in the State Tonnage Tax Cases and Wheeling

that vessels belonging to a State’s own citizens may be

subject to a property tax when the vessels are taxed in the

same manner as other personal property owned by citizens

of that State. At the time those cases were decided, the

home port doctrine was still in effect, which meant that

vessels were taxable solely by the owner’s domicile State.

Since the State Tonnage Tax Cases and Wheeling, the

home port doctrine has been abandoned and States are

now permitted to tax vessels belonging to citizens of other

States that develop a tax situs in the nondomiciliary

State, provided the tax is fairly apportioned. See, e.g., Ott

v. Mississippi Valley Barge Line Co., 336 U. S. 169, 172–

174 (1949); Japan Line, Ltd. v. County of Los Angeles, 441

U. S. 434, 442–443 (1979). Given this evolution in the law

governing interstate taxation since our decisions in the

State Tonnage Tax Cases and Wheeling, there is little

reason to think that the ability of a State to tax vessels in

the “same manner” as other personal property applies only

to vessels owned by citizens of the taxing State. In any

event, we need not decide this issue because it is clear that

the vessels subject to the City’s ordinance are not taxed in

the same manner as other personal property.

As far as we can tell, then, Valdez applies a value­

based personal property tax to ships and to no other prop­

erty at all. It does so in order to obtain revenue for gen­

eral city purposes. The tax, no less than a similar duty,

may (depending upon rates) “ta[x] the consumption” of

those in other states. See 3 Records of the Federal Con­

vention of 1787, at 519 (reprinting letter from James

Madison to Professor Davis, 1832). It is consequently the

kind of tax that the Tonnage Clause forbids Valdez to

14 POLAR TANKERS, INC. v. CITY OF VALDEZ

Opinion of the Court

Opinion of BREYER, J.

impose without the consent of Congress, consent that

Valdez lacks.

* * *

We conclude that the tax is unconstitutional. We re­

verse the contrary judgment of the Supreme Court of

Alaska. And we remand the case for further proceedings.

It is so ordered.

Cite as: 557 U. S. ____ (2009) 1

Opinion of ROBERTS, C. J.

SUPREME COURT OF THE UNITED STATES

_________________

No. 08–310

_________________

POLAR TANKERS, INC., PETITIONER v. CITY OF

VALDEZ, ALASKA

ON WRIT OF CERTIORARI TO THE SUPREME COURT OF ALASKA

[June 15, 2009]

CHIEF JUSTICE ROBERTS, with whom JUSTICE THOMAS

joins, concurring in part and concurring in the judgment.

I agree with the Court’s conclusion that the Valdez tax

is unconstitutional “[b]ecause the imposition of the tax

depends on a factor related to tonnage and that tonnage

based tax is not for services provided to the vessel.” Ante,

at 7. The plurality goes on, however, to reject the city’s

argument that the tax may be sustained as a property tax

similar to ones the city imposes on other property. The

plurality rejects that argument on the ground that the city

in fact does not impose similar taxes on other property.

Ante, at 8–13. I would instead reject the argument on the

ground that it does not matter.

The Tonnage Clause applies to “any Duty of Tonnage,”

regardless of how that duty compares to other commercial

taxes. U. S. Const., Art. I, §10, cl. 3. The free flow of

maritime commerce was so important to the Framers that

they grouped the prohibition on tonnage duties with bans

on keeping troops or ships of war, entering into compacts

with other States or foreign powers, and engaging in war.

Ibid. In light of the Framers’ goal to promote trade, and

the language of the Clause, I do not see how an unconsti

tutional tax on maritime commerce becomes permissible

when bundled with taxes on other activities or property.

If States wish to use their geographical position to tax

national maritime commerce, they must get Congress’s

2 POLAR TANKERS, INC. v. CITY OF VALDEZ

Opinion of ROBERTS, C. J.

consent—just as they must to engage in the other activi

ties prohibited by Clause 3.

The majority responds that nothing in the history of the

Clause, its purpose, or this Court’s interpretation of it

suggests that it bans all taxes on vessels using a port.

Ante, at 5. The majority’s list of interpretive tools tellingly

leaves out one—the words the Framers used. The Clause

by its terms provides that “No State shall, without the

Consent of Congress, lay any Duty of Tonnage.” U. S.

Const., Art. I., §10, cl. 3 (emphasis added). The majority

correctly concludes that the Valdez tax is a tonnage duty,

ante, at 7, and that should be the end of the matter.

The majority also objects that this approach would give

vessels “preferential treatment,” when the Clause only

protects vessels from discrimination. Ante, at 6. But the

Clause says nothing about discrimination, and it should

hardly come as a surprise that a constitutional ban on

tonnage duties would give preferential treatment to ves

sels. Such protection reflects the high value the Framers

placed on the free flow of maritime commerce. See State

Tonnage Tax Cases, 12 Wall. 204, 214 (1871) (“Prior to the

adoption of the Constitution the States . . . levied duties on

imports and exports and duties of tonnage, and it was the

embarrassments growing out of such regulations and

conflicting obligations which mainly led to the abandon

ment of the Confederation and to the more perfect union

under the present Constitution”).

The plurality appears to be driven to its tax-comparison

analysis only in responding to the city’s contention that

the tax is exempt from the Tonnage Clause under the

State Tonnage Tax Cases, supra, and Transportation Co. v.

Wheeling, 99 U. S. 273 (1879). Neither of those cases has

any bearing here. Both cases make clear that they apply

only to taxation of property owned by citizens of the State.

See State Tonnage Tax Cases, supra, at 213 (referring to

“[t]axes levied by a State upon ships and vessels owned by the

Cite as: 557 U. S. ____ (2009) 3

Opinion of ROBERTS, C. J.

citizens of the State” (emphasis added)); Wheeling, supra, at

284 (“Property . . . when belonging to a citizen of the State

living within her territory . . . is the subject of State taxa

tion” (emphasis added)). We have never held that the

Tonnage Clause allows such property taxes to be imposed

on visiting ships. Doing so would allow easy evasion of the

important principles of the Clause.

Both the plurality and JUSTICE STEVENS suggest that

the evolution of the “home port doctrine” sheds light on

how to read the Tonnage Clause. See ante, at 12–13; post,

at 3, n. 1 (dissenting opinion). I disagree. Under the home

port doctrine, Polar Tankers “could not be taxed in [Val

dez] at all,” even if the tax were not a tonnage duty. Ja

pan Line, Ltd. v. County of Los Angeles, 441 U. S. 434, 442

(1979); Hays v. Pacific Mail S. S. Co., 17 How. 596, 599

(1855). In contrast, the Tonnage Clause forbids only

tonnage duties, and would permit Valdez to impose other

taxes on visiting ships—for example, “a reasonable charge

for” the service of “policing of a harbor.” Clyde Mallory

Lines v. Alabama ex rel. State Docks Comm’n, 296 U. S.

261, 267, 266 (1935). The demise of the home port doc

trine is in no way inconsistent with reading the Tonnage

Clause, as written, to ban all tonnage duties. See Japan

Line, supra, at 439, n. 3 (rejecting home port doctrine

while expressly not reaching Tonnage Clause argument).

In any case, because the Court has determined that

Valdez’s tax is unlike other municipal taxes, it does not

decide whether a tonnage duty would be unconstitutional

when other similar property is taxed. See ante, at 13;

post, at 1 (ALITO, J., concurring in part and concurring in

the judgment). Whatever other taxes the city might im

pose, this tax “operate[s] to impose a charge for the privi

lege of entering . . . or lying in” the port of Valdez, and is a

duty of tonnage for that reason. Clyde Mallory, supra, at

265–266. I therefore concur in the judgment.

Cite as: 557 U. S. ____ (2009) 1

Opinion of ALITO, J.

SUPREME COURT OF THE UNITED STATES

_________________

No. 08–310

_________________

POLAR TANKERS, INC., PETITIONER v. CITY OF

VALDEZ, ALASKA

ON WRIT OF CERTIORARI TO THE SUPREME COURT OF ALASKA

[June 15, 2009]

JUSTICE ALITO, concurring in part and concurring in the

judgment.

I join the opinion of the Court, except for Part II–B–2,

which might be read to suggest that the tax at issue here

would be permitted under the Tonnage Clause if the tax

were a property tax levied in the same manner on other

personal property within the jurisdiction. It is sufficient

for present purposes that the Valdez tax is not such a

personal property tax and therefore, even if the Tonnage

Clause permits a true, evenhanded property tax to be

applied to vessels, the Valdez tax is an unconstitutional

duty of tonnage.

Cite as: 557 U. S. ____ (2009) 1

STEVENS, J., dissenting

SUPREME COURT OF THE UNITED STATES

_________________

No. 08–310

_________________

POLAR TANKERS, INC., PETITIONER v. CITY OF

VALDEZ, ALASKA

ON WRIT OF CERTIORARI TO THE SUPREME COURT OF ALASKA

[June 15, 2009]

JUSTICE STEVENS, with whom JUSTICE SOUTER joins,

dissenting.

The Tonnage Clause prohibits the States and their

political subdivisions from charging ships for the privilege

of using their ports. Because this case does not involve

such a charge, I respectfully dissent.

I

The Tonnage Clause commands that “No State shall,

without the Consent of Congress, lay any Duty of Ton

nage.” U. S. Const., Art. I, §10, cl. 3. As the Court asserts,

the purpose of the Clause is to prevent States with conven

ient ports from abusing the privileges their natural posi

tion affords. See ante, at 3–4. Thus, the pertinent inquiry

in determining whether an exaction violates the Clause’s

prohibitions is whether the charge is “ ‘in its essence a

contribution claimed for the privilege of arriving and

departing from a port.’ ” Transportation Co. v. Wheeling,

99 U. S. 273, 283–284 (1879) (quoting Cannon v. New

Orleans, 20 Wall. 577, 581 (1874)); see Clyde Mallory

Lines v. Alabama ex rel. State Docks Comm’n, 296 U. S.

261, 265–266 (1935). In applying that principle, we have

been cognizant of its limits.

By its terms, the Tonnage Clause prohibits States from

imposing a duty on ships based on their internal cubic

capacity, see id., at 265, and it similarly prohibits charges

2 POLAR TANKERS, INC. v. CITY OF VALDEZ

STEVENS, J., dissenting

that “effect the same purpose” as a duty of tonnage—for

instance, by imposing a duty based “on the number of

masts, or of mariners, the size and power of the steam

engine, or the number of passengers which she carries,”

Passenger Cases, 7 How. 283, 458–459 (1849) (opinion of

Grier, J.). By contrast, charges levied for other purposes

are outside the Clause’s reach. This Court has often ap

proved charges for services rendered to ships to ensure

their safe and convenient use of a port. See Clyde Mallory,

296 U. S., at 266–267. And the federal interest in protect

ing access to the ports generally does not prevent States

from charging shipowners those taxes and fees that the

States are also authorized to levy on other property. See

Wiggins Ferry Co. v. East St. Louis, 107 U. S. 365, 375,

376 (1883) (upholding a “license tax” “laid upon the busi

ness of keeping a ferry”); Wheeling, 99 U. S., at 279 (up

holding a property tax on ships).

More than a century ago, we noted that it was “too well

settled to admit of question that taxes levied by a State,

upon ships or vessels owned by the citizens of the State, as

property, based on a valuation of the same as property, to

the extent of such ownership, are not within the prohibi

tion of the Constitution.” Ibid. Just as “[d]raymen may be

compelled to pay a license tax on every dray owned by

them, hackmen on every hack, [and] tavernkeepers on

their taverns in proportion to the number of the rooms

which they keep for the accommodation of guests,” so too

can a State charge the operator of a ferry a “tax upon the

boats which he employs.” Wiggins Ferry, 107 U. S., at 375.

“[V]essels of all kinds are liable to taxation as property in

the same manner as other personal property owned by

citizens of the State.” Wheeling, 99 U. S., at 284; State

Tonnage Tax Cases, 12 Wall. 204, 212–213 (1871).

From Wheeling and the State Tonnage Tax Cases, two

principles emerge regarding the circumstances under

which States may levy property taxes on ships. First, the

Cite as: 557 U. S. ____ (2009) 3

STEVENS, J., dissenting

State seeking to levy the tax must show that the ship has

sufficient contacts with the jurisdiction to establish a tax

situs there. In our earlier cases, the existence of the situs

was determined by the citizenship of the ship’s owner, see

Wheeling, 99 U. S., at 279; State Tonnage Tax Cases, 12

Wall., at 213, but a tax situs can also be created by a

property’s substantial contacts with a jurisdiction.1 The

requirement of a tax situs serves to distinguish property

taxes from fees charged for the privilege of entering a port,

which the Court has consistently found to violate the

prohibition against duties of tonnage. See, e.g., Cannon,

20 Wall., at 581 (holding unconstitutional “a tax upon

every vessel which stops” in the city’s jurisdictional wa

ters); Steamship Co. v. Portwardens, 6 Wall. 31, 33 (1867)

(invalidating a tax imposed “upon every ship entering the

port” and “collected upon every entry”).

Our cases also require that property taxes on ships, as

with other property, be calculated based on the ship’s

——————

1 Previously, courts followed the common-law “home port” doctrine,

pursuant to which a ship could be taxed only by the State in which its

owner was domiciled. See Pullman’s Palace Car Co. v. Pennsylvania,

141 U. S. 18, 23–24 (1891). That doctrine has since “yielded to a rule of

fair apportionment among the States,” permitting any jurisdiction with

which a ship has had sufficient contacts to establish a tax situs to levy

a property tax on the ship in proportion to the ship’s contacts with the

jurisdiction. See Japan Line, Ltd. v. County of Los Angeles, 441 U. S.

434, 442–443 (1979); see also Standard Oil Co. v. Peck, 342 U. S. 382,

383 (1952). We have roundly rejected the doctrine in cases involving

ships moving in interstate operations along the inland waters. See

ibid. And in the context of ocean-going ships, we have referred to the

doctrine as “ ‘anachronistic’ ” and all but “ ‘abandoned,’ ” noting that “to

rehabilitate the ‘home port doctrine’ as a tool of Commerce Clause

analysis would be somewhat odd.” Japan Line, 441 U. S., at 443. In

light of these developments, it is odd indeed that THE CHIEF JUSTICE

endeavors to distinguish Transportation Co. v. Wheeling, 99 U. S. 273

(1879), and the State Tonnage Tax Cases, 12 Wall. 204 (1871), as

“apply[ing] only to taxation of property owned by citizens of the State.”

See ante, at 2 (opinion concurring in part and concurring in judgment).

4 POLAR TANKERS, INC. v. CITY OF VALDEZ

STEVENS, J., dissenting

value. When a State levies a property tax on ships, the

prohibition of the Tonnage Clause comes into play only if

the ships are “not taxed in the same manner as the other

property of the citizens, or where the tax is imposed upon

the vessel as an instrument of commerce, without refer

ence to the value as property.” Wheeling, 99 U. S., at 284.

Although the meaning of Wheeling’s “same manner” lan

guage is not immediately apparent, the remainder of the

opinion emphasizes the importance of the method by

which the tax on the petitioner’s ships was calculated—

i.e., “based on a valuation of the same as property”—

rather than the city’s taxation of other property in the

jurisdiction. Id., at 279; see id., at 284.

Our decision in the State Tonnage Tax Cases is to the

same effect, as we held that taxes levied on ships “as

property, based on a valuation of the same as property, are

not within the prohibition of the Constitution,” but if

States tax ships “by a tonnage duty, or indirectly by im

posing the tax upon the master or crew, they assume a

jurisdiction which they do not possess.” 12 Wall., at 213,

214 (emphasis in original). Indeed, each of the taxes

challenged in that case was invalidated because it was

“levied on the steamboats wholly irrespective of the value

of the vessels as property, and solely and exclusively on

the basis of their cubical contents.” Id., at 217; see id., at

224 (holding the tax unconstitutional because “the amount

of the tax depends upon the carrying capacity of the

steamboat and not upon her value as property”).2 Thus, in

——————

2 The

Court seems to conflate these methods of calculating taxes on

ships, as it asserts that “a tax on the value of such vessels is closely

correlated with cargo capacity” and concludes that the tax in this case

“depends on a factor related to tonnage.” Ante, at 7; see also ante, at 1

(opinion of ROBERTS, C. J.). This is contrary to our longstanding recog

nition that a ship’s capacity is not a proxy for its value: “[T]he experi

ence of every one shows that a small steamer, new and well built, may

be of much greater value than a large one, badly built or in need of

Cite as: 557 U. S. ____ (2009) 5

STEVENS, J., dissenting

both Wheeling and the State Tonnage Tax Cases, the

method by which the challenged tax was calculated was

essential to the Court’s determination of its validity.

The tax in this case has both of the critical characteris

tics of a legitimate property tax. It is undisputed that

petitioner’s ships “are taxed based on their value, and only

those [ships] that have acquired a taxable situs in Valdez

are taxed.” 182 P. 3d 614, 622 (Alaska 2008). Accord

ingly, I would uphold the Alaska Supreme Court’s decision

sustaining the tax against petitioner’s Tonnage Clause

challenge.

The plurality reaches the opposite conclusion because it

reads Wheeling’s “same manner” language to impose a

different limitation on the States’ power to tax ships.

According to the plurality, “in order to fund services by

taxing ships, a State must also impose similar taxes upon

other businesses.” Ante, at 9. As discussed above, Wheel

ing and the State Tonnage Cases are better read to require

that property taxes on ships be assessed based on the

value of the ship rather than its tonnage. But even if the

“same manner” requirement did not clearly refer to the

method of calculating the tax, the phrase could not bear

the weight the plurality places on it. And there is no other

support in our cases or in the text of the Tonnage Clause

for a rule that conditions a State’s exercise of its admitted

authority to levy property taxes on ships upon its decision

also to tax other property within its jurisdiction.

Under the plurality’s reading, the same tax could be a

“Duty of Tonnage” in one instance and not in another

depending on taxing decisions wholly outside the Clause’s

reach. Far from being compelled by our earlier cases, this

rule is in tension with our decisions noting the substantial

flexibility States must be afforded in making taxing deci

sions and cautioning courts not to “subject the essential

——————

extensive repairs.” State Tonnage Tax Cases, 12 Wall., at 224.

6 POLAR TANKERS, INC. v. CITY OF VALDEZ

STEVENS, J., dissenting

taxing power of the State to an intolerable supervision.”

Ohio Oil Co. v. Conway, 281 U. S. 146, 159 (1930). That

tension is compounded by the inevitable difficulty States

will have in navigating the new rule, as the plurality does

not suggest at what point a State can be satisfied that it

has taxed enough other property that it may also tax ships

without violating the Clause’s prohibitions.

In support of its understanding of the “same manner”

requirement, the plurality asserts that the rule “helps to

assure that a value-related property tax differs signifi

cantly from a graduated tax on a ship’s capacity and that

the former is not simply a redesignation of the latter.”

Ante, at 9. But our cases provide such assurance without

resort to the plurality’s strained reading. Because States

and their political subdivisions only have authority to tax

property that has established a tax situs in the jurisdic

tion, they cannot levy such taxes on ships merely for the

privilege of entering or leaving the port; much more sub

stantial contact with the jurisdiction is required. See

Valdez Municipal Code §3.12.020(C) (2008); Central R. Co.

of Pa. v. Pennsylvania, 370 U. S. 607, 614–615 (1962).

And it is that contact, rather than entry into the port, that

provides the basis for taxing the ships. The tax situs

requirement thus ensures that a State cannot avoid the

proscriptions of the Tonnage Clause by redesignating a

duty charged for the privilege of entering the port as an

ad valorem tax.

The facts of this case illustrate the point. Most of peti

tioner’s ships spend 40-to-50 days per year in the Port of

Valdez. See App. 32–45. “[A]s a group the tankers form a

continuous presence in the city.” 182 P. 3d, at 623. The

ships’ prolonged physical presence and extensive commer

cial activities in the city have a substantial impact on the

city’s resources. On average, the ships’ presence adds 550

people to the population of Valdez, increasing the city’s

total population by 10%. Those people, as well as the

Cite as: 557 U. S. ____ (2009) 7

STEVENS, J., dissenting

ships themselves, require numerous public services, in

cluding harbor facilities, roads, bridges, water supply, and

fire and police protection. Ibid. As the Alaska Supreme

Court concluded, the challenged tax is therefore a legiti

mate property tax levied to support the ships’ use of the

city’s services. See ibid.

II

Even if the Tonnage Clause were properly understood to

permit a jurisdiction to levy a tax on ships only when

other property in the jurisdiction is also taxed, I would

uphold the challenged tax. Although the tax applies only

to ships, see Valdez Municipal Code §3.12.020, other

property in the city is also subject to taxation.

First, §3.12.022 imposes a value-based property tax on

trailers, mobile homes, and recreational vehicles that are

affixed to a site and connected to utilities. The plurality

makes much of the requirement that the property be

“ ‘affixed’ ” to a particular site, concluding that “Valdez in

fact taxes those vehicles only when they constitute a form,

not of personal property, but of real property.” Ante, at 10.

But the taxability of property pursuant to §3.12.022 is

determined in much the same way as the taxability of

ships. “A trailer or mobile home is conclusively presumed

to be affixed to the land” and may therefore be taxed if “it

has remained at a fixed site for more than ninety days.”

§3.12.022(C). Similarly, a ship owner can establish a tax

situs in Valdez and thus be subject to taxation if it is “kept

or used within the city for any ninety days or more.”

§3.12.020(C)(2)(c).3 In both cases, the provision serves to

impose a tax on property that has developed substantial

contacts with the city. The plurality is thus wrong to

——————

3A ship can also establish a tax situs in Valdez if it is usually kept or

used within the city, travels to or within the city along regular routes,

or is necessary to the conduct of substantial business in the city.

§3.12.020(C)(2).

8 POLAR TANKERS, INC. v. CITY OF VALDEZ

STEVENS, J., dissenting

conclude that ships have been singled out for taxation.

Valdez also “levie[s] a tax” on all property taxable under

Alaska Statutes Chapter 43.56 at the same rate that

applies to other property taxed by the city. Valdez Mu

nicipal Code §3.28.010.4 The tax is imposed on property

used “primarily in the exploration for, production of, or

pipeline transportation of gas or unrefined oil,” including

machinery, equipment, pumping stations, powerplants,

aircraft and motor vehicles, and docks and other port

facilities. See Alaska Stat. §§43.56.010, 43.56.210(5)(A)

(2008). For several reasons, this tax is more significant

than the plurality acknowledges. First, contrary to the

plurality’s view, the tax appears to be a municipal tax.

Valdez Municipal Code §3.28.010 states that the tax “is

hereby levied” on “property taxable under Alaska Statutes

Chapter 43.56,” which in turn states that “[a] municipality

may levy” such taxes, §43.56.010(b). The terms of these

provisions indicate that the city has exercised its express

authority to levy such taxes. Given the myriad types of

property taxable under those provisions and the require

ment of Valdez Municipal Code §3.28.010 that the prop

erty be taxed “at the rate of taxation that applies to other

property taxed by the city,” it seems clear that petitioner’s

ships are taxed in the “same manner” as other property

even as the plurality uses that term.

My view of the case would be the same even if the tax on

property used in oil production were imposed by the State

itself, as the plurality assumes. Whether the oil

production tax and the challenged tax are levied by the

same unit of government has no relevance to the question

whether the latter violates the Constitution. The restric

tion imposed by the Tonnage Clause is a command to the

——————

4 As the plurality notes, ante, at 10–11, Valdez did not raise this issue

in state court, and the parties have provided only limited briefing on

the issue.

Cite as: 557 U. S. ____ (2009) 9

STEVENS, J., dissenting

States limiting their inherent taxing authority as sover

eigns. The States’ political subdivisions have no such

inherent power and can levy taxes only to the extent

authorized by the State. See 16 E. McQuillin, Law of

Municipal Corporations §44.05, pp. 19–24 (rev. 3d ed.

2003); see also Wiggins Ferry, 107 U. S., at 375 (noting

“[t]he power of [a State] to authorize any city within her

limits to impose a license tax” on ferries). Indeed, this

aspect of the relationship between States and their politi

cal subdivisions is reflected in Alaska Stat. §43.56.010(b),

which authorizes municipalities to levy certain taxes and

prevents them from exempting particular property from

taxation. Because the city’s power to levy taxes derives

from the State, whether the city or the State levies the tax

on oil-production property is constitutionally irrelevant.

Finally, it bears mention that the result in this particu

lar case does nothing to further the interests the Tonnage

Clause was intended to protect. As the Court acknowl

edges, ante, at 4, the central purpose of the Clause is “to

prevent the seaboard States, possessed of important ports

of entry, from levying taxes on goods flowing through their

ports to inland States,” Youngstown Sheet & Tube Co. v.

Bowers, 358 U. S. 534, 556 (1959) (Frankfurter, J., dis

senting in part). Port Valdez is at the southern terminus

of the Trans Alaska Pipeline System, which carries oil

extracted from Alaska’s North Slope to Port Valdez where

it is loaded onto oil tankers belonging to petitioner and

others for transport to refineries in other States. Taxes

imposed on ships exporting that oil have the same effect

on commerce in oil as do taxes on oil-production property

or the oil itself, and Alaska’s authority to impose taxes on

oil and oil-production property is undisputed. From an

economic or political point of view, there is no difference

between Alaska’s geographical control over the area in

which the oil is produced and the port from which it is

exported. Accordingly, no federal interest is served by

10 POLAR TANKERS, INC. v. CITY OF VALDEZ

STEVENS, J., dissenting

prohibiting Alaska or its political subdivisions from taxing

the oil-bearing ships that are continually present in the

State’s ports.

III

The Tonnage Clause permits a State to levy a property

tax on ships whether or not it taxes other property. Were

that not the case, the challenged tax would still be permis

sible because Valdez also taxes mobile homes, trailers, and

a wide variety of property used in producing oil. Because

the tax in my view does not run afoul of the prohibitions of

the Tonnage Clause, I respectfully dissent.