# Appendix — Lineas Aereas Costarricenses, S.A. v. Florida Department of Revenue > Briefs, arguments, decisions, and more. URL: https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40385017_0292%3A2 ## Record - **Collection:** Supreme Court brief - **Document type:** Appendix - **Published:** January 1, 1986 - **Citation:** 477 U.S. 901 ## Text oa No. 84- —— IN THE Supreme Court of the United States OCTOBER TERM, 1984 LINEAS AEREAS COSTARRICENSES, S.A., et al., Appellants, Vv. STATE OF FLORIDA, DEPARTMENT OF REVENUE, Appellee. On Appeal from the Supreme Court of the State of Florida APPENDICES TO JURISDICTIONAL STATEMENT ROBERT D. PAPKIN Counsel of Record, Member of the Bar of the Supreme Court of the United States EDWARD W. SAUER SQUIRE, SANDERS & DEMPSEY ' 1201 Pennsylvania Avenue, N.W. Washington, D.C. 20004 ~ Telephone: (202) 626-6601 Counsel for Appellants Lineas Aereas Costarricenses, S.A., et al. SE PCT LTRS ET OTS fe WILSON - EPES PRINTING Co., INC. - 7469-0096 - WASHINGTON, D.C. 20001 TABLE OF CONTENTS APPENDICES . Opinion of the Florida Supreme Court in this pro- . Opinions of the Florida Supreme Court in compan- ee re enced scr nant eakssaehcmmmadoeseaoasinusaiiets . Order of the First District Court of Appeal certify- ing this proceeding directly to the Florida Supreme 0 SRE LRN ATE NI Al LER RNs eM aeesed Maree eke . Final Judgment of the Circuit (Trial) Court and Order Amending that Judgment __..........-.....-........... . Final Judgment of the Circuit (Trial) Court in a I Ss aemraeneteass . Motion for Rehearing in the Florida Supreme Court.. . Order of the Florida Supreme Court Denying Re- RRR DRE re TAN Webs Ra Ren het Ye see tie, nee SE RRP trate oe ne er ne . List of the Appellants in this Proceeding Indicating Their Parent Companies, Subsidiaries (Except Wholly-Owned Subsidiaries), and Affiliates _.......... Fla. Stat. Ann. § 212.08(4) (West Supp. 1984)...... . Certain Provisions of Relevant Air Transport Agreements Regarding Taxes on Aviation Fuel...... . Correspondence Between the Florida Department of Revenue and the United States Department of State Regarding Changes in Florida’s Fuel Tax Law, Motions Seeking Consideration by the Florida Su- preme Court of a Statement of Policy by the Avia- tion Authorities of the United States, Response Thereto of the State of Florida, Order of the Florida Supreme Court Regarding this Issue, Brief of the Foreign Airline Appellants on this Issue -................. Page la APPENDIX A SUPREME COURT OF FLORIDA DEPARTMENT OF REVENUE, Appellant/Cross Appellee Ws LINEAS AEREAS COSTARRICENSES, et al., Appellees/Cross Appellants No. 63,989 (Fla. June 14, 1984), rehearing denied, Sept. 12, 1984 ADKINS, J. We have before us an appeal here by an order from the First District Court of Appeal certifying the issue in the case to be of great public importance. We have juris- diction pursuant to article V, section 3(b) (5), Florida Constitution. This case arose when Lineas Aereas Costarricenses (hereinafter LACSA) filed a complaint in circuit court in Leon County seeking to enjoin Florida’s Department of Revenue from collecting sales taxes, under a provision of chapter 83-3, Laws of Florida, on aviation fuel pur- chased by LACSA for use in foreign commerce. Trans- portes Aereos Nacionales, S.A., Aerolineas Argentinas, Aeronaves de Mexico, S.A., Aerovias Nacionales de Columbia, [sic] S.A., Trinidad and Tobago (BWIA Inter- national) Airways Corp., Empresa Ecuatoriana de Avia- cion, S.A., Linea Aerea Nacional Chile, Compania Mexi- 2a cana de Aviacion, S.A. de C.V., Viacao Aerea Rio- Grandense, and Venzolana Internacional de Aviacion, S.A. were granted leave to intervene as party plaintiffs. The circuit court entered an order of final judgment upholding the tax as constitutional but granting the in- junction on the basis that the foreign airlines were ex- empt under certain international agreements. The De- partment of Revenue is appealing the exemption and LACSA is cross-appealing the determination that the tax is constitutional. Inasmuch as the issues raised here have been addressed by us in Delta Air Lines, Inc. v. Department of Revenue, No. 63,915 (Fla. June 14, 1984): Department of Revenue v. Wardair Canada Ltd., No. 64,036 (Fla. June 14, 1984) ; and Department of Revenue v. Air Jamaica Ltd., No. 64,035 (Fla. June 14, 1984), they will not be re- addressed. Accordingly, we affirm the circuit court’s order to the extent that it upheld the tax as constitutional with the exception of the portion regarding the corporate tax credit to Florida-based airlines. In Delta we determined that portion to be unconstitutional and ordered it stricken from chapter 83-8. We reverse the circuit court’s order to the extent that it recognized an exemption from the excise tax for the foreign airlines. It is so ordered. ALDERMAN, C.J., BOYD and SHAW, JJ., Concur. OVERTON, J., Dissents: “I dissent. See Department of Revenue v. Wardair Canada Ltd., No. 64,036 (Fla. June 14, 1984).” McDONALD, J., Dissents. 3a APPENDIX B SUPREME COURT OF FLORIDA NORTHEASTERN INTERNATIONAL AIRWAYS, INC., et al., Appellants Vv. DEPARTMENT OF REVENUE, Appellee No. 64,085 (Fla. June 14, 1984), rehearing denied, Sept. 12, 1984 ADKINS, J. We have before us an appeal which results from an order by the Fourth District Court of Appeals certifying the issues involved to be of great public importance. We have jurisdiction. Art. V, § 3(b) (5), Fla. Const. The case arose with the filing of a complaint in circuit court in Broward County. Northeastern International Airways, Inc., and Arrow Air, Inc., challenged the con- stitutionality of chapter 83-3, Laws of Florida. The cir- cuit court entered an order of final judgment upholding the constitutionality of chapter 83-3. The plaintiffs chal- lenged the constitutionality of chapter 83-3 but did not argue for exemption on the basis of international agree- ments entered into by the United States. The circuit court granted a motion for summary judgment against the plaintiffs thereby upholding the constitutionality of the law. We have dealt with the issues raised here in our deci- sions in Eastern Air Lines, Inc. v. Department of Reve- 4a nue, No. 63,949 (Fla. June 14, 1984) ; Delta Air Lines, Inc. v. Department of Revenue, No. 63,915 (Fla. June 14, 1984) ; Department of Revenue v. Wardair Canada Ltd., No. 64,036 (Fla. June 14, 1984) ; and Department of Revenue v. Air Jamaica Ltd., No. 64,035 (Fla. June 14, 1984). Accordingly we affirm in part and reverse in part the order of the circuit court. We determined in Delta that the portion of chapter 83-3 which provided a tax credit to Florida-based airlines was unconstitutional. We also determined that it was severable and that it was stricken from the law. The remainder of the order is affirmed. It is so ordered. ALDERMAN, C.J., BOYD, OVERTON and SHAW, JJ., Concur. McDONALD, J., Dissents. 5a SUPREME COURT OF FLORIDA DEPARTMENT OF REVENUE, Appellant Vv. AIR JAMAICA LTD., et al., Appellees Reported at: 455 So.2d 324 (Fla. June 14, 1984), rehearing denied, Sept. 12, 1984 ADKINS, Justice. This case is before us on an order from the First Dis- trict Court of Appeal which certified the issues in this case to be of great public importance. We have jurisdic- tion. Art. V, § 3(b) (5), Fla. Const. This ease arose with the filing of a complaint in circuit court in Leon County by the respondent Air Jamaica chal- lenging the constitutionality of chapter 83-3, Laws of Florida. By order of the trial court the complaint was amended to include eleven other foreign airlines. The ac- tion was consolidated with a case filed by Wardair Can- ada for the purpose of trial. The parties stipulated to a briefing schedule and an early hearing date was obtained. A procedure was allowed which allowed the airlines to self-accrue the sales tax imposed under chapter 83-3 dur- ing the pendency of the proceedings subject to certain conditions. The circuit court entered an order of final judgment on July 19, 1988, upholding the constitutionality of chapter 83-3 but ruling in favor of the airlines’ assertion that 6a they should be exempt from the tax by virtue of certain executive agreements between their countries and the United States. The trial judge had previously upheld the law in Delta Air Lines, Ine. v. Department of Revenue, No. 83-761 (Leon County Cir.Ct.—Civ.Divy. May 23, 1983). The Department of Revenue appealed the circuit court’s holding recognizing an exemption for the foreign airlines. The airlines cross-appealed. We will discuss only those issues raised which have not been previously determined by this Court in either Eastern Air Lines Inc. v. Depart- ment of Revenue, 455 So.2d 311 (Fla. 1984); Delta Air Lines, Inc. v. Department of Revenue, 455 So.2d 317 (Fla. 1984); or Department of Revenue v. Wardair Canada, Ltd., 455 So.2d 326 (Fla. 1984). The airlines challenge the law on the basis it uncon- stitutionally invades the exclusive powers of the executive and legislative branches to regulate foreign commerce by taxing commerce through a prohibited impost on exports. The airlines did not raise this issue in their pleadings or at oral argument in the circuit court. The department argues that the airlines are therefore precluded from rais- ing the issue now. We agree. Nonetheless, we find that the law is not prohibited by the export-import clause of the federal constitution. The airlines attempt to apply federal statutes which are inapplicable to the excise tax in question. There is no basis for the airlines’ conclusion that the tax violates the export-import clause. The aur- lines attempt unsuccessfully to distinguish the case of Shell Oil Company v. State Board of Equalization, 64 Cal.2d 713, 414 P.2d 820, 51 Cal. Rptr. 524 (1966); ap- peal dismissed, 386 U.S. 211, 87 S.Ct. 973, 17 L.Ed.2d 870 (1967). Shell indicates, without question, that the fuel at issue here is not an export because it is used to propel that aircraft and is not delivered to another coun- try. Furthermore, the tax in question is imposed on the privilege of the Florida vendor selling motor fuel or spe- 7a cial fuel with the legal incident being on the first use or withdrawal from storage for use in the State of Florida. Florida is not attempting to tax the instrument, that is, the aircraft, of the foreign national while in Florida nor is it attempting to tax the process of exportation nor any fuel for export. The airlines can also find no support for their position in Richfield Oil Corp. v. State Board of Equalization, 329 US. 69, 67 S.Ct. 156, 91 L.Ed. 80 (1946). That case in- volved the shipment, of oil from this country “with the intention of unitifg them to the mass of those belonging to some fopefen country.” Id. 414 P.2d at 824, 51 Cal. Rtpr. at’d28. The oil was specifically sold for shipment abroad. At the time the tax was levied, the oil had clearly entered the process of exportation. This is not true of the present tax. The fuels intended to be used by the air- lines. It is not being purchased by the airline with the intent to transport it for sale-abroad. We tind no merit to the airlines’ argument on this point. The airlines have raised the argument that the tax is a direct violation of agreements between the United States and their respective countries. We faced a similar chal- lenge to the law in our decision in Department of Revenue v. Wardair Canada, Ltd., 455 So.2d 326 (Fla. 1984). In the present case the airlines have not produced any facts which would enable us te hold contrary to our holding in Wardair where we found that the tax did not violate any international agreement. In addition, we find that none of the agreements expressly grant a most favored nation status when dealing with the issue of fuel and taxes as the airlines contend. Accordingly, we affirm the order of the circuit court as to the constitutionality of chapter 83-3 except that portion of the law pertaining to a tax credit for Florida corpora- tions. In Delta we determined that portion to be uncon- stitutional and it was stricken from the law. We reverse ———— 8a the circuit court to the extent that it recognized an ex- emption for foreign airlines. It is so ordered. ALDERMAN, C.J., and BOYD and SHAW, JJ., con- eur. OVERTON, J., dissenting: I dissent. See Department of Revenue v. Wardair Can- ada Ltd. [455 So.2d 326], (Fla. 1984). McDONALD, J., dissents. CSS 9a SUPREME COURT OF FLORIDA EASTERN AIR LINES, INC., Appellant v. DEPARTMENT OF REVENUE, Appellee Reported at: 455 So.2d 311 (Fla. June 14, 1984), rehearing denied, Sept. 12, 1984 ADKINS, Justice. The case is before us on an order from the First Dis- trict Court of Appeal certifying the issues in the case to be of great public importance. We have jurisdiction. Art. V, § 3(b) (5), Fla. Const. This case arose with the filing of a complaint by East- ern Air Lines in the circuit court of Leon county seeking declaratory and injunctive relief from the enforcement of provisions of chapter 83-3, Laws of Florida, on the grounds that the law was unconstitutional. Specifically, Eastern alleged that the law violated the equal protection and due process clauses of the Florida and United States Constitutions, was an unconstitutional delegation of legis- lative authority, and violated the commerce clause of the United States Constitution. By stipulation, the parties agreed to a procedure whereby Eastern was allowed to self-accrue the sales tax imposed under chapter 83-3, which became effective on April 1, 1983, during the pend- | 10a ency of the proceedings subject to certain conditions. The trial judge entered his final judgment in this case on May 27, 1983, incorporating the order he had entered in a similar action filed by Delta Airlines and upholding the constitutionality of chapter 83-3. On June 24, 1983, East- ern filed its notice of appeal with the First District Court of Appeal. On July 12, 1983, that court issued its order certifying the case for immediate resolution by this Court. Chapter 83-3 was enacted during a special session of the Florida legislature which was called for the express purpose of addressing road transportation and public transit needs in the state. The law revises the tax struc- ture of chapters 212 and 220 of the Florida Statutes. The new law eliminates one-half (4 cents) of the excise tax imposed by former chapter 206, Florida Statutes (1981), on fuel purchased for road transportation use and imposes a five percent sales tax on this fuel through the new Part II of former chapter 212, chapter 83-3, section 6. That section bases the five percent sales tax on a predetermined price for fuel of $1.148 per gallon. The new sales tax is imposed on all aviation jet fuel purchased by interstate air common carriers, but is not imposed on railroads and vessels due to the proration provision which applies to railroads and vessels allowing taxation based on cost and only on the carrier’s intrastate mileage. Ch. 83-3, §5 (amends § 212.08(4), Fla.Stat. (Supp. 1982) ). Section 5 of the law provides: (4) EXEMPTIONS, ITEMS BEARING OTHER EXCISE TAXES, ETC.—Also exempt are water (not exempting mineral water or carbonated water), and; all fuels used by a public or private utility, in- cluding any municipal corporation or rural electric cooperative association, in the generation of electric power or energy for sale. Fuel other than motor fuel and special fuel is taxable as provided in this part, except that fuel expressly exempt herein. Motor fuels and special fuels are taxable as provided in part II, lla except that those used by vehicles, other than air- craft, which are licensed as common earriers by the Interstate Commerce Commission to transport per- sons or property in interstate or foreign commerce and vessels used to transport persons or property in interstate or foreign commerce are taxable only to the extent provided herein. The first issue which we will address is Eastern’s con- tention that the proration provisions, which do not apply to airlines, violate concepts of equal protection by not treating all common carriers alike. Eastern asserts that all interstate carriers, whether they be airlines, railroads, trucks or vessels, are similarly situated for fuel tax pur- poses. The circuit court found that Eastern did not sus- tain its burden of demonstrating that the classification is hostile and oppressive and held that there “is no invidious discrimination by the creation of an arbitrary classifica- tion.” The court’s order states: “Classifying airlines dif- ferently from vessels and railroads for fuel tax purposes is not arbitrary. Airlines enjoy advantages and must tolerate some disadvantages due to their distinctive na- ture.” The court cited the example of the airlines being exempt from ad valorem taxes on the lease of property from the county or other governmental unit pursuant to chapter 80-368, Laws of Florida, while vessels and rail- roads are not. The court also noted that proration of mileage for aircraft has proven difficult in the past be- cause of flight patterns over the Gulf of Mexico and the Atlantic Ocean to avoid the accumulation of intrastate mileage. When the state legislature, acting within the scope of its authority, undertakes to exert the taxing power, every presumption in favor of the validity of its action is in- dulged. Only clear and demonstrated usurpation of power will authorize judicial interference with legislative action. Walters v. City of St. Louis, 347 U.S. 281, 74 $.Ct. 505, 98 L.Ed. 660 (1954). In the field of taxation particu- 12a larly, the legislature possesses great freedom in classifica- tion. The burden is on the one attacking the legislative enactment to negate every conceivable basis which might support it. Madden v. Kentucky, 309 U.S. 83, 60 S.Ct. 406, 84 L.Ed. 590 (1940); Just Valuation & Taxation League, Inc. v. Simpson, 209 So.2d 229, 323 (Fla. 1968). The state must, of course, proceed upon a rational basis and may not resort to a classification that is palpably arbitrary. Department of Revenue v. AMREP Corp., 358 So.2d 1343,.1349 (Fla. 1978). A statute that discrimi- nates in favor of a certain class is not arbitrary if the discrimination is founded upon a reasonable distinction or difference in state policy. Allied Stores v. Bowers, 358 U.S. 522, 79 S.Ct. 437, 3 L.Ed.2d 321 (1959). We agree with the circuit court’s conclusion that East- ern has not met its burden in attacking the classification made here. They have failed to demonstrate that a hostile and oppressive discrimination has been made. There are many obvious distinctions between public road and high- way transportation of persons and property and air trans- portation upon which the classification at issue could ra- tionally be based. The modes of transportation are in- herently and essentially different. The classification drawn does not violate concepts of equal protection. Eastern also argues that the statute, by adopting an initially established fuel price of $1.148 per gallon upon which to base the tax rate, violates concepts of equal pro- tection and unconstitutionally restricts the rights of in- dividuals to contract. The provision being challenged reads as follows: § 212.70 Tax imposed on sale of motor fuel and special fuel; tax upon ultimate consumer; determina- tion by department; notification.— (3) Prior to June 1 of each year, the department shall determine the appropriate sales tax applicable to the retail price per gallon of motor fuel and spe- cial fuel as follows: 13a (a) The department shall determine the appropri- ate total motor fuel and special fuel retail price, in- cluding any federal, state and local excise taxes on such fuel, for the forthcoming 12-month period be- ginning June 1, by adjusting the initially established price by the percentage change in the average monthly gasoline price component of the Consumer Price Index, issued by the United States Department of Labor, for the most recent 12-month period end- ing March 31, compared to said average for the 12- month period ending March 31, 1984. However, the adjustment provided herein shall first be made for the forthcoming 12-month period beginning June 1, 1985. (b) The tax per gallon shall be computed as 5 per- cent of said total retail price, rounded to the nearest one-tenth of one cent. (c) The initially established price is $1.148 per gallon. Eastern asserts that the price set is not related to the actual price of aviation fuel and, therefore, is arbitrary and unreasonable. We do not agree. The tax is levied on first withdrawal of the fuel from the storage tanks and is imposed on all consumers equally regardless of the na- ture of transport. We find no merit in Eastern’s argu- ment that the predetermined price structure invidiously discriminates against airlines. Eastern also contends that section 6 of the law consti- tutes an improper delegation of legislative power by re- lating the price adjustment for future periods to the per- centage change in the average monthly gasoline price com- ponent of the Consumer Price Index issued by the United States Department of Labor. The Consumer Price Index referred to in the law is authorized by 29 U.S.C. §§ 2, 2a and 2b (1976). Under these code provisions, the Secre- tary of Labor has broad powers to collect, collate and re- 14a port statistics, and, to that end, has the power to use bu- reaus provided for the department and is authorized to call upon other departments of the federal government for data and the results obtained by them. More importantly, the Secretary of Labor may “collate, arrange, and publish such statistical information so obtained in the same man- ner as to him may seem wise.” 29 U.S.C. § 2. The Con- sumer Price Index is widely used by the federal govern- ment to determine such things as cost of living increases in social security, retirement benefits for the military, and other appropriations such as child care payments. The circuit court in its final judgment determined that the method of appropriation in chapter 83-3 is equivalent to the method which allowed the Department of Education to appropriate state funds to a state agency based on the Florida Price Level Index and which was found to be constitutional in Gindl v. Department of Education, 396 S0.2d 1105 (Fla. 1979). Eastern argues that the instant case should be distinguished from Gindl because here the Department of Revenue is delegated to determine the price upon which the tax will be based by using a fed- eral agency’s index to be adopted in the future and over which no Florida agency has any control. Eastern argues that since the department, in arriving at the tax appli- cable to the price, must, of necessity, rely on an admin- istrative act of the United States Department of Labor which will first take place on March 1, 1984, the legisla- ture has shifted its constitutional duties to that federal agency contrary to the established rule of this state, citing as authority this Court’s decision in State v. Welch, 279 So.2d 11 (Fla. 1973). In State v. Welch, this Court considered the constitu- tionality of a portion of the former Florida Drug Abuse Law, chapter 404, Florida Statutes (Supp. 1972), which purported to prohibit certain acts by reference. Specifi- cally, the law declared that it was the intent of the legis- lature to include under that chapter “all drugs controlled 15a by the drug abuse laws of the United States, now or in the future,” in addition to those specified under Florida law. § 404.515, Fla.Stat. (Supp. 1972). In Welch this Court looked to the rule of law announced in Freimuti v. State, 272 So.2d 473 (Fla. 1972). There, the Court said that the legislature may adopt provisions of federal statutes and administrative rules made by a federal ad- ministrative body that are in existence and in effect at the time the legislature acts, but it would be an uncon- stitutional delegation of legislative power for the legisla- ture to adopt in advance any federal act or the ruling of any federal administrative body that Congress or an ad- ministrative body might see fit to adopt in the future. 272 So.2d at 476. Accordingly, this Court held the statute unconstitutional for attempting to incorporate by refer- ence future legislative and/or administrative actions of jurisdictions outside Florida. /d. We believe that Eastern’s reliance on the aforemen- tioned language is misplaced. The statute under attack merely provides that an adjustment be made to the fuel price which is based on the percentage change in the aver- age monthly gasoline price component of the Consumer Price Index. Here, the legislature is merely setting forth the manner in which the department is to determine the appropriate total motor fuel and special fuel retail price. The department is directed with precision how to make such a determination. We think the language of Welch and Freimuth should be interpreted to apply to statutes which incorporate federal statutes or administrative rules which substantively change the law, and not to a statute which incorporates a federal index to provide aid in mak- ing a ministerial determination. Furthermore, we do not agree with Eastern’s conten- tion that the statute is also constitutionally infirm be- cause the Department of Revenue will utilize a consumer price index which is to be determined after the effective date of the act. In Gindl we upheld a statutory provision 16a which required a computation based on the most recent publication of the Florida Price Level Index prepared by the Department of Administration. The statute was to take effect July 1, 1976. The Department of Education intended to base the distribution on a survey which would be started in October or November of 1976 and completed during the early part of 1977. In other words, the effect of the statute was to reach forward and allow distribu- tion to be calculated on the most recent publication of the Florida Price Level Index, an index which was not in ex- istence when the law became effective. We agree with the circuit court’s determination that the method of appro- priation in chapter 83-3 is equivalent to the method ap- proved in Gindl. The final issue which Eastern has raised is whether chapter 83-3 unconstitutionally discriminates against in- terstate commerce since its tax credit provisions provide a direct commercial advantage to local agriculture and commercial fishing to the detriment of similar interstate activities. The relevant section of the law provides: § 212.92 Refunds.— (e) Refund to farmers and fishermen.— 1. [AJ]gricultural purposes means motor fuel or special fuel used in any tractor, vehicle, or other farm equipment which is used exclusively on a farm or for processing farm products on the farm and no part of which is used in any vehicle or equipment driven or operated upon the public highways of this state. This restriction shall not apply to the move- ment of farm vehicles or farm equipment between farms. 2. For the purposes of this paragraph, “commer- cial fishing purposes” shall be construed to mean motor fuel or special fuel used in the operation of boats, vessels, and equipment used exclusively for the taking of fish, crayfish, oysters, shrimp, and sponges from the salt and fresh waters under the jurisdiction 17a of the state for resale to the public but shall in no way be construed to include fuel used for sports or pleasure fishing, no part of which is used in any vehicle or equipment driven or operated upon the highways of this state. 3. Any person who uses. any motor fuel or special fuel for agricultural purposes or commercial fishing purposes on which the tax imposed by this part has been paid shall be entitled to a refund of said tax. The Department of Revenue questions Eastern’s stand- ing to challenge chapter 83-3’s full refund provisions, sec- tion 212.92(1)(e), 2. & 3., since Eastern is “neither in the fishing or farming business and . . . Eastern does not contend that farmers and/or fishermen are in direct or indirect competition with their airline enterprise.” East- ern does not compete with fishing or agriculture. We agree that Eastern does not have standing to raise the unconstitutionality of these full refund provisions. In State ex rel. Clarkson v. Philips, 70 Fla. 340, 70 So. 367 (1915), this Court held that the constitutionality of a provision of a statute cannot be tested by a party whose rights or duties are not affected by it, unless the provi- sion is of such a nature that it renders invalid a provi- sion of the statute that does affect the party’s rights or duties. It is a fundamental principle that a statute, if con- stitutional in one part and unconstitutional in another part, may remain valid except for the unconstitutional portion. However, this is dependent upon the unconstitu- tional provision being severable from the remainder of the statute. The severability of a statutory provision is determined by its relation to the overall legislative intent of the statute of which it is a part, and whether the statute, less the invalid provisions, can still accomplish this intent. Cramp v. Board of Public Instruction, 187 So.2d 828 (Fla. 1962). 18a Additionally, if the valid portion of the law would be rendered incomplete, or if severance would cause results unanticipated by the legislature, there can be no severance of the invalid parts; the entire law must be declared un- constitutional. Kass v. Lewin, 104 So.2d 572 (Fla. 1958). This Court succinctly summarized the general rules re- garding severability in Presbyterian Homes of Synod v. Wood, 297 So.2d 556 (Fla. 1974), wherein the Court stated: An unconstitutional portion of a general law may be deleted and the remainder allowed to stand if the un- constitutional provision can be logically separated from the remaining valid provisions, that is, if the legislative purpose expressed in the valid provisions can be accomplished independently of those which are void; and the good and bad features are not insepa- rable and the Legislature would have passed one without the other; and an act complete in itself re- mains after the invalid provisions are stricken. Id. at 559. We believe that the legislature’s intent could still be accomplished if the full refund provisions relating to local commercial fishing and agriculture were to be eliminated and the remainder of the statute left intact. Therefore, we cannot say that these provisions, were we to declare them unconstitutional, are of such a nature that they would render invalid the portion of the statute that does affect Eastern’s rights. Eastern has no standing to raise this issue. Accordingly, we affirm the order of the circuit court. It is so ordered. ALDERMAN, C.J., and BOYD, OVERTON, Me- DONALD and SHAW, JJ., concur. 19a SUPREME COURT OF FLORIDA DELTA AIR LINES, INC., et al., Appellants V. DEPARTMENT OF REVENUE, Appellee Reported at: 455 So.2d 317 (Fla. June 14, 1984), rehearing denied, Sept. 12, 1984 ADKINS, Justice. This case is before us on an order from the First Dis- trict Court of Appeal certifying the issue in the case to be of great public importance. We have jurisdiction. Art. V, § 3(b) (5), Fla. Const. This case arose with the filing of a complaint by Delta Air Lines in the circuit court of Leon County seeking declaratory and injunctive relief from the enforcement of provisions of chapter 83-3, Laws of Florida, on the ground that the law was unconstitutional. Capitol Air, Inc., Northwest Airlines, Inc., Ozark Air Lines, Inc., Pied- mont Aviation, Inc., Republic Airlines, Inc., The Flying Tiger Lines, Inc., United Airlines and USAir, Inc., were granted leave to intervene as party plaintiffs. On May 27, 1983, the circuit court entered its final judgment in favor of the Department of Revenue ruling the law con- stitutional. Delta appealed to the First District Court of Appeal which certified the case for immediate resolution by this Court. 20a We described the structure of chapter 83-3 and resolved some of the issues raised by Delta in our decision in East- tern Air Lines v. Department of Revenue, 455 So.2d 311 (Fla. 1984). There are two issues which Delta raises which we were not faced with in that decision. First, Delta raises the issue of whether chapter 83-3 violates the commerce clause of the United States Con- stitution by providing a corporate income tax credit for Florida-based airlines. Chapter 220, Florida Statutes (1981), imposes an income tax on domestic corporations and foreign corporations qualified to do business in Flor- ida or actually doing business in Florida. Section 61 of chapter 83-3 creates section 220.189, Florida Statutes (1983), and provides a credit against the corporate in- come tax for air common carriers who have a corporate or business home office in Florida and also maintain a work force of more than 1200 employees in the state. This credit offsets up to one-half of the air carriers’ fuel tax liabilities with a maximum credit of $5 million. A state tax is not per ze invalid because it burdens interstate commerce since interstate commerce may con- stitutionally be made to pay its own way. Complete Auto Transit, Inc. v. Brady, 430 U.S. 274, 97 S.Ct. 1076, 51 L.Ed.2d 326 (1977); Western Live Stock v. Bureau of Revenue, 303 U.S. 250, 58 S.Ct. 546, 82 L.Ed. 823 (1938). Taxes have been sustained against commerce clause chal- lenges when the tax: 1) is applied to an activity with a substantial nexus with the taxing state; 2) is fairly ap- portioned; 3) does not discriminate against interstate commerce; and 4) is fairly related to the services pro- vided by the state. Complete Auto, 430 U.S. at 279, 97 S.Ct. at 1079. No state may, consistent with the com- merce clause, “impose a tax which discriminates against interstate commerce . . . by providing a direct commercial advantage to local business.” Boston Stock Exchange v. State Tax Commission, 429 U.S. 318, 329, 97 S.Ct. 599, 607, 50 L.Ed.2d 514 (1977) ; Northwestern States Port- 21a land Cement Co. v. Minnesota, 358 U.S. 450, 457, 79 S.Ct. 357, 361, 3 L.Ed.2d 421 (1959). This principle follows from the basic purpose of the commerce clause which is to prohibit preferential trade areas destructive of the free commerce anticipated by the United States Constitution. Boston Stock Exchange, 429 U.S. at 329, 97 S.Ct. at 606; Dean Milk Co. v. Madison, 340 U.S. 349, 356, 71 S.Ct. 295, 298, 95 L.Ed. 329 (1951). In Boston Stock Exchange the United States Supreme Court found unconstitutional a state stock transfer tax containing credit provisions which had the effect of dis- criminating against interstate commerce to the direct commercial advantage of local business. The transfer tax was imposed if any one of five events ( sale, transfer, de- livery, ete.) occurred within the state. The rate of tax was based upon the price of the security. The total tax was determined by the number of shares involved in the taxable event. The imposition of the tax itself was found to be constitutional. However, the credit structure of the tax was found to be unconstitutional. The credit amend- ments to the tax resulted in a scheme in which intrastate sales received a preferential fifty percent reduction in the rate of tax imposed and were given a maximum tax ceiling of $350. Out-of-state sales, however, were subject to the full tax rate without any ceiling. Because it im- posed a greater tax liability on out-of-state sales than on in-state sales, the New York transfer tax fell “short of the substantially evenhanded treatment demanded by the [c]ommerce [c]lause.” 429 U.S. at 332, 97 S.Ct. at 608. Another tax statute whose discriminatory credits and exemptions provided the basis for a finding of unconstitu- tionality was the Louisiana statute reviewed in Maryland v. Louisiana, 451 U.S. 725, 101 S.Ct. 2114, 68 L.Ed.2d 576 (1981). There, a tax was imposed on certain uses of natural gas coming into the state. The tax was imposed to equalize competition between locally produced gas sub- ject to the state’s severance tax and gas coming into the - | 22a state from the outer continental shelf which was free of the severance tax. The use tax provided an exemption for gas consumed within the state. It also provided a tax credit against severance taxes for all use taxes paid, thereby encouraging investment in local mineral explora- tion and development and discouraging investment and development of the outer continental shelf and other states. The Court found the statute unconstitutional in light of the discriminatory effect produced by the pattern of credits and exemptions which violated the principle of equality. 451 U.S. at 759, 101 S.Ct. at 2135. The circuit court here found that “the tax is on fuel purchased in the state and all consumers are taxed equally” and thus concluded that there is no burden on interstate commerce similar to that found in Maryland v. Louisiana. The court misconstrued the nature of the dis- crimination wurked against interstate commerce by the corporate tax credit. The question is not one of whether Florida may impose this tax on fuel purchased in Florida for use in interstate commerce. Rather the issue is whether the tax with its attendant credit provision pro- duces a discriminatcry effect on interstate commerce. The credit provision of chapter 83-3 clearly discriminates against interstate commerce because the corporate tax credit provides a direct commercial advantage to Florida- based air common carriers over non-F lorida-based car- riers. The circuit court also found Boston Stock Exchange in- applicable stating that, in the present case, “the legisla- ture is not trying to tax any out-of-state transactions.” The circuit court misconstrued the holding in Boston Stock Exchange. The United States Supreme Court in Boston Stock Exchange was not concerned with whether the transaction occurred in New York or outside the State, but whether the credit structure of the tax favored are a. — 23a in-state business and discriminated against interstate commerce. The circuit court also relied on Archer Daniels Midland Co. v. State, 315 N.W.2d 597 (Minn. 1982). In Archer Daniels the Supreme Court of Minnesota struck down a tax credit statute similar to the Florida-based tax credit provided in chapter 83-3. Minnesota imposed an excise tax of thirteen cents per gallon on all gasoline sold in the state including gasohol. The taxing statute was amended in 1980 to provide a four cents per gallon partial exemp- tion for gasohol made from Minnesota farm products and blended with aleohol distilled in Minnesota. A non- resident alcohol producer challenged the constitutionality of this statute alleging that the higher taxes imposed on non-resident producers discriminated against interstate commerce. The court found that the exemption violated the commerce clause noting that the act attempted to un- fairly preserve local markets for local interests by con- ferring an artificial economic advantage to local interests under the state’s taxing power. Jd. at 599. The circuit court ruled that Archer Daniels dealt with out-of-state production or consumption and that chapter 83-3 in no way affects out-of-state production or consumption. This approach again overlooks the real issue in this case. Just as the Minnesota statute favored in-state gasohol pro- ducers, chapter 83-3 confers an artificial economic advan- tage on those interstate air carriers who maintain cor- porate or business home offices in Florida over those com- peting air carriers who base their corporate headquarters outside the state. The circuit court continued its erroneous analysis un- der the commerce clause by referring to Faircloth v. Mr. Boston Distiller Corporation, 245 So.2d 240 (Fla. 1970), as supporting the proposition that this Court has upheld special tax exemptions to encourage Florida industry. The court’s reliance on Faircloth is misplaced because that case involved a challenge to a state excise tax based ’ 24a upon equal protection and due process arguments. The commerce clause was not an issue in that case. The circuit court has misconstrued the analysis neces- sary to determine whether a statute discriminates against interstate commerce. The test under the commerce clause is, as we have noted, whether the statute discriminates against interstate commerce by providing a direct com- mercial advantage to local commerce. The corporate in- come tax credit provides a direct commercial advantage to select Florida-based air carriers and thereby violates the commerce clause. In Eastern, 455 So.2d 311 (Fla. 1984), we discussed the proper analysis to determine whether a statutory pro- vision was severable from the remainder of the statute. We find that the corporate tax credit provision, now sec- tion 220.189 (Florida Statutes 1983), can be logically separated from the remaining valid provisions of chapter 83-3 without hampering the legislature’s intent to provide a transportation fund for the state. Thus, we strike that provision which extends a corporate income tax credit to Florida-based air carriers. We believe this will still ac- complish the legislature’s primary purpose—to tax corpo- rations qualified to do business in Florida or actually doing business in Florida. Delta also challenges section 6 of the law as being a road-user tax totally unrelated to the services provided by the state and thus violative of the commerce clause. Delta states in its brief that the first gas tax and the corresponding first four cents of the special fuel tax formerly imposed under chapter 206, Florida Statutes (1981), levied an excise tax specifically on road-users. Delta also refers to the new provision as “the new sales tax.” However, the thrust of Delta’s argument is that this tax is a user tax and, as such, fails the fourth prong of the text [sic] enunciated in Complete Auto. Delta argues that it and other interstate air common carriers do not use the roads in Florida and, therefore, the meas- 25a ure of the tax bears no relationship to Delta’s presence or activities in the state. We must disagree wit’ Delta’s argument. First, the tax is not a road-user tax. It is an excise tax imposed under part II of chapter 212, which is commonly referred to as the sales tax law of the state of Florida. The tax is imposed on the privilege of engaging in certain busi- nesses, including the selling of motor fuels and special fuels in the state. All purchasers of motor fuel or special fuel are taxed on the incident of first withdrawal. The funds generated are to be deposited in a state transporta- tion fund and are not, as Delta has asserted, to be re stricted to only road use. Our interpretation of this statute as an excise tax is consistent with prior United States Supreme Court deci- sions which reviewed similar statutes dealing with taxes on fuel used by airlines. In 1933 the United States Supreme Court was faced with a challenge to a Tennessee statute which imposed an excise tax on the privilege of selling, storing, or distribut- ing gasoline within the state. Nashville, Chattanooga, & St. Louis Railway v. Wallace, 288 U.S. 249, 53 S.Ct. 345, 77 L.Ed. 730 (1933). The proceeds of the tax were to be used solely in the construction and maintenance of a high- way system in the state. The appellant rail carrier con- tended that the tax was in effect a tax upon the use of the gasoline in appellant’s business as an interstate car- rier and, thus, an unconstitutional burden on interstate commerce. /d. at 265, 53 S.Ct. at 349, 77 L.Ed. at 737. The court noted that gasoline having come to rest in stor- age is taxable by the state, notwithstanding its prospec- tive use as an instrument of interstate commerce, much the same as a right of way, rolling stock, or other instru- ments of interstate commerce are subject to local property taxes. Accordingly, the Court stated: [T]here can be no valid objection to the taxation of the exercise of any right or power incident to ap- 26a pellant’s ownership of the gasoline, which falls short of a tax directly imposed on its use in interstate commerce, deemed forbidden in Helson v. Kentucky, [279 U.S. 245, 49 S.Ct. 279, 73 L.Ed. 683 (1929) ], supra. Here the tax is imposed on the successive ex- ercise of two of those powers, the storage and with- drawal from storage of the gasoline. Both powers are completely exercised before use of the gasoline in interstate commerce begins. The tax imposed upon their exercise is therefore not one imposed on the use of the gasoline as an instrument of commerce and the burden of it is too indirect and remote from the function of interstate commerce itself to transgress constitutional limitations. .... .. . [T]he levy is a tax, not a toll or charge for use of the highways. ... Id. at 268, 53 S.Ct. at 350. In Eastern Air Trasport, Inc. v. South Carolina Tax Commission, 285 U.S. 147, 52 S.Ct. 340, 76 L.Ed. 673 (1932), the Supreme Court upheld a state tax on the sale of gasoline within the state. The suit was brought by an interstate air carrier which argued that the tax placed a direct burden on interstate commerce. The Court found that the tax, which was described in the statute as a li- cense tax, was for the privilege of carrying on the busi- ness of selling gasoline. The Court emphasized that. un- der the circumstances the validity of the tax would not be affected by whether the tax was construed to be an excise tax or a property tax. The Court stated: There is no substantial distinction between the sale of gasoline that is used in an airplane in interstate transportation and the sale of coal for the locomo- tives of an interstate carrier, or of the locomotives and cars themselves bought as equipment for inter- state transportation. A non-discriminatory tax upon local sales in such cases has never been regarded as 27a imposing a direct burden upon interstate commerce and has no greater or different effect upon that com- merce than a general property tax to which all those enjoying the protection of the State may be sub- jected. Td. at 153, 52 S.Ct. at 341. Similarly, the Court upheld a Wyoming law which taxed all gasoline “used or sold” in the state and applied to all gasoline imported for use upon its withdrawal from storage tanks in Edelman v. Boeing Air Transport, Inc., 289 U.S. 249, 53 S.Ct. 591, 77 L.Ed. 1155 (1933). The Court described the tax in the following manner. The tax is applied to the stored gasoline as it is withdrawn from the storage tanks at the airport and placed in the planes. No tax is collected for gasoline consumed in respondent’s planes either on coming into the State or on going out. It is at the time of withdrawal alone that “use” is measured for the pur- poses of the tax. The stored gasoline is deemed to be “used” within the State and therefore subject to the tax, when it is withdrawn from the tanks... . A State’ may validly tax the “use” to which gaso- line is put in withdrawing it from storage within the State, and placing it in the tanks of the planes, not- withstanding that its ultimate function is to generate motive power for carrying on interstate commerce. Such a tax cannot be distinguished from that con- sidered and upheld in Nashville, Chattanooga & St. Louis Ry. Co. v. Wallace, supra. There it was pointed out that “there can be no valid objection to the taxa- tion of the exercise of any right or power incident to . . ownership of the gasoline which falls short of a tax directly imposed on its use in interstate com- merce, deemed forbidden in Helson v. Kentucky, 279 U.S. 245, 73 L.Ed. 683, 49 S.Ct. 279.” As the exer- cise of the powers taxed, the storage and withdrawal 28a from storage of the gasoline, was complete before interstate commerce began, it was held that the bur- den of the tax was too indirect and remote from the function of interstate commerce, to transgress con- stitutional limitations. Id. at 252, 52 S.Ct. at 592 (emphasis supplied). The Supreme Court of the United States has stated that the constitutional power of a state to tax does not depend upon the enjoyment of the taxpayer of any special benefit from the use of the funds raised by taxation. Nashville, Chattanooga & St. Louis Railway v. Wallace, 288 U.S. 249, 268, 53 S.Ct. 345, 350, 77 L.Ed. 730 (1933). A state is free to pursue its own fiscal policies, “if by the prac- tical operation of a tax the state has exerted power in relation to opportunities which it has given, to protection which it has afforded, to benefits which it has conferred by the fact of being an orderly, civilized society.” Wis- consin v. J.C. Penney Co., 311 U.S. 485, 444, 61 S.Ct. 246, 250, 85 L.Ed. 267 (1940). See also Commonwealth Edi- son Co. v. Montana, 453 U.S. 609, 625, 101 S.Ct. 2946, 2957, 69 L.Ed.2d 884 (1981); General Motors Corp. v. Washington, 377 U.S. 436, 440-41, 84 S.Ct. 1564, 1567-68, 12 L.Ed.2d 430 (1964). The relevant inquiry under the fourth prong of the Complete Auto test is not, as Delta seems to suggest, the amount of the tax or the value of the benefits allegedly bestowed as measured by the costs the state incurs on account of the taxpayer’s activities. Commonwealth Edison, 453 U.S. at 625, 101 S.Ct. at 2957. The first prong of Complete Auto clearly requires that the interstate business (here the airlines) have a substan- tial nexus with the state before any tax may be levied on it. The fourth prong of the test is intended to impose the additional limitation that the measure of the tax be rea- sonably related to the extent of the contact. Jd. at 626, 101 S.Ct. at 2958; Western Live Stock v. Bureau of Rev- enue, 303 U.S. 250, 254, 58 S.Ct. 546, 548, 82 L.Ed. 823 (1938). ea oa 29a This tax is unlike a true “user fee” or user tax. Per- haps the best illustration of a true user tax is found in Evansville-Vanderburgh Airport Authority v. Delta Air Lines, Inc., 405 U.S. 707, 92 S.Ct. 1849, 31 L.Ed.2d 620 (1972). In Evansville-Vanderburgh the United States Supreme Court reviewed a use tax imposed on airlines by an Indiana municipality. All interstate air carriers were charged a user service charge for each enplaning passen- ger. The monies collected were to defray the cost of air- port construction and maintenance. The tax was upheld and found to be fairly related to the use of the facilities by the airlines. The present tax is more analogous to that found in Com- monwealth Edison where the United States Supreme Court upheld a Montana severance tax on coal. Coal pro- ducers challenged the tax contending that the severance tax had a discriminatory effect on interstate commerce since ninety percent of Montana’s coal was shipped out- of-state and, therefore, the tax burden was borne pri- marily by out-of-state consumers. The Court found that the coal producers’ claim hinged on an inquiry into the fourth prong of Complete Auto. First, the Court con- cluded that, contrary to appellant’s contention, the sever- ance tax was a general revenue tax. 453 U.S. at 621, 101 S.Ct. at 2955. The Court also concluded that the fourth prong of Complete Auto was satisfied by the Montana tax. The Court stated: Because it is measured as a percentage of the value of the coal taken, the Montana tax is in “proper pro- portion” to appellants’ activities within the State and, therefore, to their “consequent enjoyment of the opportunities and protections which the State has af- forded” in connection with those activities. Id. at 626, 101 S.Ct. at 2958 (citing General Motors Corp. v. Washington, 377 U.S. at 440-41, 84 S.Ct. at 1567-68). 30a We believe the imposition of this excise tax on the pur- chase of motor fuel and special fuel in the state of Florida is fairly related to those purchasers’ enjoyment of the protections and benefits afforded by the state and the privilege of doing business in an organized society. Delta operates in at least nine of the major airports throughout the state of Florida transporting persons and property and engaging in the business of operating a commercial airline for profit. The persons and property which are transported through the air by airlines such as Delta do not come to rest at the airports. Those persons and any property generally must then use the public roads and highways of the state in automobiles or trucks or some other means of public transportation. We must disagree with Delta’s contention that the tax is invalid because it is not fairly related to the services provided by the state. Accordingly, we affirm that portion of the circuit court’s order which upheld section 6 of the law as not being vio- lative of the commerce clause. But, we reverse the circuit court’s order insofar as it upheld the corporate tax credit to Florida-based airlines and strike that section of chap- ter 83-3. It is so ordered. ALDERMAN, C.J., and BOYD, OVERTON, Mc- DONALD and SHAW, JJ., concur. » cee 3la SUPREME COURT OF FLORIDA DEPARTMENT OF REVENUE, Appellant V. WARDAIR CANADA, LTD., Appellee Reported at: 455 So.2d 326 (Fla. June 14, 1984), rehearing denied, Sept. 12, 1984 ADKINS, Justice. This case is before us on an order from the First Dis- trict Court of Appeal certifying the issue in the case to be of great public importance. We have jurisdicticn. Art. V, § 3(b) (5), Fla. Const. This case arose with the filing of a complaint in the circuit court in Leon County by Wardair Canada, Ltd. (hereinafter Wardair) challenging the constitutionality of chapter 83-3, Laws of Florida. The court consolidated this case with an action filed by Air Jamaica for the purpose of trial. The parties stipulated to a procedure whereby the airline was allowed to self-accrue the sales tax imposed under chapter 83-3 during the pendency of the proceedings subject to certain conditions. The circuit ecuurt entered an order of final judgment on July 19, 1983, separate from its order in the Air Jamaica case. The court upheld the constitutionality of the law dismiss- ing three of Wardair’s counts in its complaint but ruled in favor of the airline in recognizing an exemption to the 32a airlines to the motor fuel and special fuel tax imposed by the law by virtue of certain executive agreements with the United States. The trial judge had previously upheld chapter 83-3 in Delta Airlines, Inc. v. Department of Rev- enue, No. 83-761 (Leon County Cir.Ct.—Civ.Div. May 23, 1983). The Department of Revenue filed its notice of ap- peal from the trial court’s final judgment on July 21, 1983. Shortly thereafter, Wardair filed its notice of cross- appeal. The First District Court of Appeal then certified the case to this Court. This Court has ruled on three of the four issues raised by Wardair in its original complaint and on cross-appeal in its decision in Delta Airlines, Inc. v. Department of Revenue, 455 So.2d 317 (Fla. 1984). The department has appealed the circuit court’s ruling recognizing an exemp- tion to the excise tax for the foreign airlines. The cir- cuit court found that chapter 83-3 was inconsistent with a Non-scheduled Air Service Agreement between the United States and Canada, May 8, 1974, T.I.A.S. 7826. The circuit court’s order noted that article XII(1) of the Air Services Agreement exempts both the United States and Canada from national duties and charges on fuels and article XIV provides that neither party will dis- criminate against the other. The court then relied on its holding in Lineas Aereas Costarricenses, S.A. v. Depart- ment of Revenue, No. 83-761 (Fla. 2d Cir. June 21, 1983). In that case the court held that when the federal policy is to exempt foreign airlines from fuel taxes and prevent discrimination, the individual states are pre- cluded from acting in that area. The department argues that the agreement is inappli- cable to estop the enforcement of chapter 83-3 for two reasons: 1) the agreement is not self-executing; and 2) the agreement specifically addresses only national cus- toms, duties, excise taxes and charges with no application to or restriction on state taxation schemes. The circuit court did not expressly recognize a distinction between 33a executory and non-executory agreement provisions in its order. The department asserts that the following provisions in the agreement are executory and thus require an addi- tional legislative enactment to effect implementation : Each Contracting Party shall exempt the carriers of the other Contracting Party to the fullest extent pos- sible under its national law from import restrictions, customs duties, excise taxes, inspection fees, and other national duties and charges on fuel, lubricants, consumable technical supplies . . . and other items intended for use solely in connection with the opera- tion, maintenance or servicing of aircraft of the car- riers of the other Contracting Party. The exemptions granted by this paragraph shall apply to items: (a) introduced into the territory of one Contracting Party by or on behalf of the carriers of the other Contracting Party; (b) retained on board aircraft of the carriers of one Contracting Party upon arriving in or leaving the territory of the other Contracting Party; (c) taken on board aircraft of the carriers of one Contracting Party in the territory of the other Contracting Party and intended solely for use in international air services; whether or not such items are consumed wholly within the territory of the Contracting Party granting the exemp- tion. Because we agree with the department’s conclusion that the agreement is inapplicable because it specifically ad- dresses only national customs, duties, and excise taxes and charges, we find it unnecessary to determine whether these provisions are executory or not. The Air Services Agreement is not a treaty ratified by the United States Senate. However, it is a formally executed international agreement and, as such, is valid and binding as if ap- 34a proved by act of Congress. United States v. Pink, 315 U.S. 203, 62 S.Ct. 552, 86 L.Ed. 796 (1942). The pur- pose of the agreement is obviously to preserve, protect and promote the continued development of a system of air transport free from discriminatory practices and to support equal commercial opportunity between the na- tions, The doctrine of preemption which is given effect through the supremacy clause mandates that federal law overrides any state regulation where there is an actual conflict be- tween the two sets of legislation such that both cannot validly stand. The United States Supreme Court has for- mulated analytical standards for preemption. In Hines v. Davidowitz, 312 U.S. 52, 61 S.Ct. 399, 85 L.Ed. 581 (1941), the Court construed the Federal Alien Registra- tion Act of 1940 to override Pennsylvania’s Alien Regis- tration Act of 1939. The Court noted that if state law “stands as an obstacle to the accomplishment and execu- tion of the full purposes and objectives of Congress,” federal regulation must preempt state regulation to give effect to the desired national policy. Jd. at 67, 61 S.Ct. at 404. Fifteen years later the validity of a Pennsylvania state regulation was again before the Court in Pennsylvania v. Nelson, 350 U.S. 497, 76 S.Ct. 477, 100 L.Ed. 640 (1956). The Court held that federal anticommunist legislation superseded the state’s sedition act and enunciated a three- prong test to determine the supremacy of a federal regu- latory scheme over state regulation in the same or similar area. The test involves an analysis of: 1) the pervasive- ness of the federal regulatory scheme; 2) federal occupa- tion of the field as necessitated by the need for national uniformity; and 3) danger of conflict between state laws and the administration of the federal program, The provisions in the agreement between the United States and Canada clearly express an intent to apply to only national taxes and duties. We do not believe that the scheme of this agreement is so pervasive so as to per- 35a mit the reasonable inference that Congress intended to preclude the state’s power to tax. Also, the competitive equality between the two nations would be destroyed if the United States air carriers had to pay state excise taxes on fuel purchases and the Canadian carrier did not. We determined in our decision in Delta Air Lines, Inc. v. Department of Revenue, 455 So.2d 317 (Fla. 1984), that the tax imposed by chapter 83-3 met the four-prong test of Complete Auto Transit v. Brady, 430 U.S. 274, 97 S.Ct. 1076, 51 L.Ed.2d 326 (1977), and thus did not vio- late the commerce clause. In 1979, the United States Su- preme Court decided the case of Japan Line, Ltd. v. County of Los Angeles, 441 U.S. 434, 99 S.Ct. 1813, 60 L.Ed.2d 336 (1979), setting forth two additional require- ments to be met when foreign commerce is involved. The Court stated: [A]n inquiry more elaborate than that mandated by Complete Auto is necessary when a State seeks to tax the instrumentalities of foreign, rather than in- terstate commerce. In addition to answering the nexus, apportionment, and nondiscrimination ques- tions posed in Complete Auto, a court must also in- quire, first, whether the tax, notwithstanding appor- tionment, creates a substantial risk of international multiple taxation, and, second whether the tax pre- vents the Federal Government from “speaking with one voice when regulating commercial relations with foreign governments.” If a state tax contravenes ei- ther of these precepts, it is unconstitutional under the Commerce Clause. Id. at 451, 99 S.Ct. at 1823. The trial court correctly found that the first require- ment of Japan Line was rot a concern because there had been no de facto showing of multiple taxation or sub- stantial risk of the same. Moorman Manufacturing Co. v. Bair, 437 U.S. 267, 98 S.Ct. 2340, 57 L.Ed.2d 197; Shell Oil Co. v. State Board of Equalization, 64 Cal.2d 713, 51 Cal.Rptr. 524, 414 P.2d 820 (1966). 36a For the reasons previously discussed, we also hold that the tax meets the second requirement of Japan Line. The agreement provides for efforts at exemption from national excise taxes, inspection fees and other national charges but does not provide for exemptions from state excise taxes. We must presume this has been done intentionally. We do not believe this legislation prevents our federal government from speaking with one voice. Accordingly, we affirm the order of the circuit court as to the constitutionality of chapter 83-3 except that portion of the law pertaining to a tax credit for Florida corpora- tions. In Delta we determined that portion to be uncon- stitutional and it was stricken from the law. We reverse the circuit court to the extent that it recognized an ex- emption for foreign airlines. It is so ordered. ALDERMAN, C.J., and BOYD and SHAW, JJ., concur. OVERTON, J., dissents with an opinion in which Mc- DONALD, J., concurs. OVERTON, Justice, dissenting. I dissent. I find that the State of Florida has no au- thority to ignore valid air service agreements between the United States Government and the governments of other countries which exempt airlines based in partici- pating nations from duties and charges on fuels. In my view, the individual states of this country are precluded by those agreements from taxing fuel used by foreign airlines. To accept the majority’s view means that all United States airlines could, in turn, be subject to local government taxation on fuel in foreign countries. We are one country and our constitution requires us to speak with one voice when the federal government enters into agreements and treaties with foreign governments. See U.S. Const. art. I, § 8; art. VI. This state is precluded from enforcing this tax against this airline. McDONALD, J., concurs. ~ 37a APPENDIX C DISTRICT COURT OF APPEAL FIRST DISTRICT TALLAHASSEE, FLORIDA 32361 Telephone No. (904) 488-6152 Date July 19, 1983 Case No. AT-305 DEPARTMENT OF REVENUE, Appellant/Petitioner VS. LINEAS AREAS [sic] COSTARRICENSES, S.A. Appellee/ Respondent ORDER Upon consideration of appellant’s Suggestion for Cer- tification of Appeal and Rule 9.125, the Court certifies that the Final Judgment rendered by the trial court on June 14, 1983 requires immediate resolution by the Su- preme Court. [SEAL] By Order of the Court RAYMOND E. RHODES Clerk 38a APPENDIX D IN THE SECOND CIRCUIT COURT IN AND FOR LEON COUNTY FLORIDA Case No. 83-964 LINEAS AEREAS COSTARRICENSES, S.A., a Costa Rican corporation, Plaintif, vs. STATE OF FLORIDA, DEPARTMENT OF REVENUE, Defendant. FINAL JUDGMENT This cause is before the Court on final hearing on the pleadings, evidence and arguments of counsel for the re- spective parties and the intervenors, and on the briefs of counsel for the parties, and the Court having considered all of same and being otherwise advised in the premises, it is ORDERED AND ADJUDGED 1. The Plaintiff asserts that Senate Bill No. 8-A, Chap- ter 83-3, Laws of Florida, title “an act relating to trans- portation finance and administration” : COUNT I: discriminates against foreign airlines in violation of Congress’ exclusive power over foreign com- merce, pursuant to Article I, Section 8, Clause 3 of the United States Constitution, COUNT II: is inconsistent with the Air Transport Services Agreements lawfully entered into by the Presi- dent of the United States, 39a COUNT III: denies foreign airlines equal protection of the laws under the United States Constitution, COUNT IV: violates Article I, Section 9, of the Flor- ida Constitution because there is no reasonable relation- ship between the taxes imposed and the services provided to foreign airlines, and COUNT V: is a special law in violation of Sections 10 and 11 of Article III of the Constitution of the State of Florida. Plaintiff prays for a permanent injunction to prevent Defendant Department of Revenue (DOR) from assess- ing and collecting fuel taxes pursuant to Senate Bill 8-A. 2. In light of this Court’s recent decision in Delta Air Lines, Inc. v. State of Florida, Department of Revenue, Case No. 83-761, (Leon County Circuit Court—Civil Divi- sion, May 23, 1983), the assertion [sic] in Counts I, III, IV, and IV [sic] are without merit. However, the Court finds merit in the assertion in Count II and hereby grants a permanent injunction for the reasons subsequently dis- cussed. This Court upholds the constitutionality of Sen- ate Bill 8-A but recognizes an exemption for foreign air- lines based on the bilateral agreements entered into between the federal government and Plaintiffs and inter- venors in this case.’ 1 Commercia! Air Transport Agreement, January 8, 1947, United States-Ecuador, T.I.A.S. 1606; Aviation Transport Services Agree- ment, October 24, 1956, United States-Colombia, T.I.A.S. 5338; Air Transport Services Agreement, April 13, 1953, United States- Venezuela, T.I.A.S. 2813; Air Transport Services Agreement, Au- gust 15, 1960, United States-Mexico, T.I.A.S. 4675; Air Transport Services Agreement, May 10, 1947, United States-Chile, T.I.A.S. 1905; Air Transport Services Agreement, September 22, 1977, United States-Argentina, T.I.A.S. 8978; Air Transport Services Agreement, February 11, 1946, United States-United Kingdom, T.I.A.S. 1507; Aviation Agreement, November 22, 1961, United States-United Kingdom, T.1.A.S. 4955; Memorandum of Consulta- tions, April 25, 1982, United States-Brazil; Memorandum of Under- standing, August 17, 1979, United States-Costa Rica. 40a DISCUSSION The Commerce Clause of the United States Constitu- tion, Article I, Section 8, Clause 3, vests with Congress the exclusive power to regulate foreign commerce. The Supremacy Clause, Article 4, Section 2, states that the Constitution and the laws made pursuant thereto are the supreme law of the land. Therefore, when Congress tra- ditionally regulates in a certain area such as in the pres- ent case by extending reciprocal agreements to foreign airlines to “strengthen even more the cultural welfare and economic bonds. . . and ensure continued development in the common welfare on bases of equality and recipro- city”, Air Transport Services Agreement with Mexico, p. 1, the states are preempted or superseded from acting in this area. Further, Congress has extended federal tax exemption from custom duties, inspection fees, excise taxes, and other national duties or charges to foreign air- lines “in order to prevent discriminatory practices and to assure equality of treatment.” Air Transport Services Agreement with Mexico, Article 7,° and that the respective authorities will attempt to facilitate maximum efficiency “with a fair and equal opportunity” for the airlines to operate on the designated routes. Mexico Agreement, Article 8.* Defendant contends that the “fair and equal oppor- tunity” refers only to routes and does not affect excise 2 Similar or equal provisions appear in the Air Transport Serv- ices Agreements listed in footnote 1 as follows: Venezuela Agree- ment—aArticle 4; Chile Agreement—Article 3; Ecuador Agreement —Article 3; United Kingdom Agreement—Article 3; Costa Rica Memorandum—Article 9; Brazil Agreement—Article 9; Colombia Agreement—aArticle 7; Argentina Agreement—Section 2(F). 3 Similar or equal provisions appear in the Air Transport Serv- ices Agreements listed in footnote 1 as follows: Venezuela Agree- ment—-Annex IV(b); Chile Agreement—Annex A.A; Ecuador Agreement—Annex Section 1.A; Costa Rica Memorandum—Article 9(5); Brazil Memorandum—Section IX; Colombia Agreement— Article 8; Argentina Agreement—Section 2(F). wT —_ 4la tax imposition. Fuel is an essential factor in an air- lines’ [sic] operation, and if its price is increased, the cost to fly to a specific destination is likewise increased. This will adversely affect the economic feasibility of flying to that destination. The foreign airlines involved in this suit fly only between their country and specified cities in the United States. In Florida that city is Miami. They engage in no intrastate or interstate flights, but are con- fined to flights between their country and the specific city. If a particular state imposes a substantial increase in the cost of flying to a certain city, it is only logical that this disadvantage would inhibit the airlines’ desire to continue flying to that city. Therefore, tax imposition does sub- stantially affect the established route and denies the air- lines a fair and equal opportunity to serve that route. It is noteworthy that in the Argentina Agreement, Sec- tion 2(F) (3), the wording is that the civil aeronautics authorities will endeavor to ensure “exemption from taxes”, without specifying exemption only from national taxes. Most of the agreements specify the referral is to national taxes and Defendant emphasizes this point in its brief as indicating Congress intentionally did not exempt state or local taxes. Consistent with this reasoning, how- ever, Argentina could submit that the failure to specify would imply the federal government would make efforts to ensure exemption from all taxes—state, local, ete. In fact, the memorandum agreement with Costa Rica, Arti- cle 9(5) does in fact state that “each party shall use its best efforts to secure for the designated airlines of the other Party, on the basis of reciprocity, an exemption from taxes, duties, charges and fees imposed by State, regional and local authorities”’. In arguing that Congress’ failure to specifically exempt state taxes in the majority of the agreements [sic] De- fendant cites Finland v. Town of Pelham, 290 N.Y.S.2d (1966), to demonstrate an express statement of Congress in a treaty as compared to the non-express statements in 42a the present agreements. However, it cannot be concluded that whenever Congress does not speak to an issue that the intent is to affirm state regulation in that area by negative implication. Congress cannot be expected to speak to all aspects of a given situation. The United States Supreme Court spoke directly on this situation in Japan Line, Ltd. v. County of Los Angeles, 441 U.S. 434, 451 (1979): “The premise of Appellees’ argument is that a State is free to impose demonstrable burdens on commerce, so long as Congress has not preempted the field by affirmative regulation. But it long has been ‘ac- cepted constitutional doctrine that the commerce clause, without the aid of Congressional legislation . affords some protection from state legislation inimical to the national commerce, and that in such cases, where Congress has not acted, this Court, and not the state legislature, is under the commerce clause the final arbiter of the competing demands of state and national interests.’” Southern Pacific Company v. Arizona ex rel. Sullivan, 325 U.S. 761, 769 (1945). Similarly, Defendant argues that the agreements be- tween the United States and Costa Rica, Brazil, Trinidad and Tobago, and Honduras are executory and require af- firmative legislative action to validate them. United States v. Postal, 589 F.2d 862 (5th Cir. 1979). The court in Postal states at page 875: “it was early decided that treaties affect the mu- nicipal law of the United States only when those treaties are given effect by congressional legislation or are, by their nature, self-executing.” but goes on to say at page 876: “The question whether a treaty is self-executing is a matter of interpretation for courts when the issue el De Lack DRE VS 2. Se been 43a presents itself in litigation .. . and, as in the case of ail matters of interpretation, the court’s attempt to discern the intent of the parties to the agreement so as to carry out their manifest purpose.” [sic] The agreements involved here have no express language that further legislation is necessary, and because, as will be discussed, the federal government recognizes these agreements as effective, this court discredits any argu- ment that these agreements are ineffective because fur-. ther legislative action is needed. As Plaintiff informs the Court, the challenged agreements are in effect pending exchange of ratification, and the Civil Aeronautics Board recognizes these agreements as effective by having granted Foreign Air Carrier Permits to Costa Rica and by recog- nizing the validity of the Brazil agreement in decisions. The T.I.A.S. agreements 1507, 4955, and 5209 govern air transportation with Trinidad and Tobago, such agree- ments made between the United Kingdom and United States. Although no T.I.A.S. agreement exists for Hon- duras, TAN, the national carrier, has been authorized by the Civil Aeronautics Board. C.A.B. Order 82-6-98 (June, 1982). Even if there were a valid distinction between the effectiveness of an executory agreement as opposed to an executed agreement, the Court here is examining the federal policy considerations behind the agreements and these considerations strongly indicate lenient tax burdens on foreign carriers. The agreements, executory or exe- cuted, are evidence of this policy as the Supreme Court stated in United States v. Pink, 315 U.S. 203, 231 (1941): as “superior Federal policy evidenced by a treaty or international compact or agreement.” Defendant argues in its brief that Plaintiff is trying te elevate the agreements to the status of treaties and appears to discredit this elevation; yet Defendant’s cites involve treaties which implies Defendant’s recognition of that status. Pink appears to treat international agree- ments with the same to status of treaties, so the distinc- tion is irrelevant. 44a Regarding the non-express language in the agreements, Defendant cites Guarantee Trust Co. v. United States, 304 U.S. 126, 143 (1938) : “Even the language of a treaty wherever reasonably possible will be construed so as not to override state laws or to impair rights arising under them.” In the present case, it seems to be the state who is trying to override the privileges extended to foreign carriers by the federal government, not vice versa. All the bilateral agreements were in effect before Senate Bill 8-A, dating back to 1947 (Ecuador), 1948 (Chile), 1953 (Venezuela) etc. This would seem to indicate that the federal govern- ment had established their policy of reciprocal tax exemp- tions before the State acted. It is, therefore, the state who is impairing a federal right, not vice versa. Defendant also cites United States v. Pink at 230: “It is of course true that even treaties with foreign nations will be carefully construed so as not to der- ogate from the authority and jurisdiction of the States of this nation unless clearly necessary to effec- tuate the national policy.” However, Pink goes on to say at p. 231: “But state law must yield when it is inconsistent with or impairs the policy or provisions of a treaty or of an international agreement.” Using the Pink analysis, derogation from the State’s au- thority in this case is in fact necessary because the ap- parent policy expressed in the bilateral agreements is for reciprocal tax advantages. This precludes the state from acting in a manner to “frustrate the achievements [sic] of federal uniformity.” Japan Line, p. 450. The federal concern for equal commercial opportunity between nations supports the policy of Congress to exempt foreign airlines from excise taxes. ee _———— ae = . 7 45a The Supreme Court of the United States in United States v. Belmont, 301 U.S. 324, 331 (1947), has rather clearly stated the applicable principle as follows: “in the case of all international compacts and agree- ments . . . that complete power over international affairs is in the national government and is not and cannot be subject to any curtailment or interference on the part of the several states.” The test to be used when a state attempts to regulate foreign commerce was articulated in Japan Line, page 451: “an inquiry more elaborate than that mandated by Complete Auto is necessary when a State seeks to tax the instrumentalities of foreign, rather than of in- terstate, commerce. In addition to answering the nexus, apportionment, and non-discrimination ques- tions posed in Complete Auto, a court must also in- quire, first, whether the tax, notwithstanding appor- tionment, creates a substantial risk of international multiple taxation, and second, whether the tax pre- vents the Federal Government from ‘speaking with one voice’ when regulating commercial relations with foreign governments.” The first requirement is not a concern in the present case because there has been no de facto showing of multi- ple taxation, and, as the court stated in Moorman Manu- facturing v. Bair, 4837 U.S. 267 (1978), the court will not invalidate a statute where the risk of multiple taxa- tion is merely “speculative.” It is the second requirement which concerns the court in the present case. It is not overlooked that in Japan Line the tax was an ad valorem levy on certain containers used in seagoing vessels of Japan, where as in this case the tax is upon the with- drawing of expendable fuel from storage. However, the principle of both seems applicable. The levy on the fuel, which is a sine qua non to movement of the aircraft, 46a seems to be within the class of burdens which the interna- tional agreements seek to prevent. The United States, consisting of fifty individual state governments united under one flag, must present a united front when dealing in economic affairs with other na- tions. Over the years the federal government has nego- tiated these bilateral agreements to prevent price dis- crimination toward U.S. carriers in other nations, these being reciprocal agreements. There have been continuing efforts of the Civil Aeronautics Board to eliminate fuel taxes imposed by other nations. Also, in 1974 Congress enacted the International Air Transportation Fair Com- petitive Practices Act, 88 Stat. 2102, to protect U.S. car- riers from discrimination. By allowing the fifty states to impose individual state taxes, it would thwart the purpose of these federal efforts and infringe on the federal power to regulate foreign commerce. Concern for Florida’s fuel tax was expressed by the United States Department of State in a letter to the Flor- ida Department of Revenue on September 29, 1982 from Matthew V. Scocozza, Deputy Assistant Secretary of State for Transportation and Telecommunication. This letter stated that the United States afforded an exemption from federal taxes and this [sic] if individual states imposed taxes it would “frustrate the international system of re- ciprocal tax exemptions and thereby significantly increase the cost of international air transportation.” After reas- surances from the Florida DOR in their letter of October 25, 1982, that airlines continued to enjoy “generous tax advantages”, Senate Bill 8-A was enacted. The Depart- ment of State reacted by sending their letter of March 17, 4 Civil Aeronautics Board (“CAB’’), Fiscal Year (“FY’’) 1982/ 1981 Report to Congress at 94-96; CAB, FY 1980 Report to Con- gress at 84; CAB, FY 1979 Report to Congress at 103; CAB, FY 1978 Report to Congress at 96; CAB, FY 1977 and Transition Quarter Report to Congress at 106-109, 114-115; CAB, FY 1976 Report to Congress at 103-104. 47a 1982 (date is a typographical error and should read “1983”) that the Department was “surprised and dis- tressed” to hear of the changes in the Florida fuel tax as applied to airlines. Mr. Scocozza’s first letter spoke of a “senerally-accepted and long-standing international prac- tice of reciprocally exempting such items from taxes”. In Japan Line at page 448 the Court talks of state taxes in reference to the second “national-uniformity” re- quirement: “a state tax on the instrumentalities of foreign com- merce may impair federal uniformity in an area _ where federal uniformity is essential. Foreign com- merce is pre-eminently a matter of national concern.” At page 449 of Japan Line the Court cites Michelin Tire Corp. v. Wages, 423 U.S. 276, 285 (1976) as follows: “the Federal Government must speak with one voice when regulating commercial relations with foreign governments.” The Japan Line court then discusses several ways a state tax may “frustrate the achievements [sic] of federal uni- formity”, page 450. Among these concerns are asym- metry in international tax structure and retaliatory taxes against American-owned instrumentalities present in other nations: “Such retaliation of necessity would be directed at American Transportation equipment in general, not just that of the taxing State, so that the Nation as a whole would suffer.” Page 430. [sic; p. 450] ACCORDINGLY, IT IS FURTHER ORDERED AND ADJUDGED: A. This Court finds and determines that Chapter 83-3, Laws of Florida, also referred to as Senate Bill 8-A, is a valid enactment and is not in conflict with the Equal Pro- tection clauses of the United States Constitution (14th a 48a Amendment) nor the Florida Constitution (Article I, Section 2); nor with the Commerce Clause of the United States Constitution (Article I, Section 8, Clause 3) for the Reasons stated in Delta Air Lines, Inc. v. State of Florida, Department of Revenue, Case No. 83-761 (Leon County Circuit Court—Civil Division, May 23, 1983). B. It is further found that Senate Bill 8-A is incon- sistent with the undertakings of the United States gov- ernment in international bilateral agreements with Plain- tiff and intervenor foreign airlines. C. Plaintiff’s Counts I, II, IV, and V are hereby dis- missed finally. D. Plaintiff and Intervenors are granted a permanent injunction against Defendant DOR assessing and collect- ing fuel taxes pursuant to Senate Bill 8-A. Count II of Plaintiff’s Complaint is meritorious. E. This court upholds the constitutionality of Senate Bill 8-A, but recognizes an exemption from the fuel tax for Plaintiff and Intervenor foreign airlines who have entered executive agreements with the United States prior to the enactment of this Bill. DONE AND ORDERED, at Tallahassee, Leon County, Florida, this 1st day of June, 1983. /s/ Ben C. Willis BEN C. WILLIS Circuit Judge 49a IN THE CIRCUIT COURT OF THE SECOND JUDICIAL CIRCUIT IN AND FOR LEON COUNTY, FLORIDA GENERAL JURISDICTION DIVISION Case No. 83-964 LINEAS AEREAS COSTARRICENSES, S.A., a Costa Rican corporation, Plaintiff, vs. STATE OF FLORIDA, DEPARTMENT OF REVENUE, Defendant. ORDER THIS CAUSE having come before the Court upon Plaintiff and Intervening Plaintiffs’ Motion to Amend Final Judgment, and the Court having reviewed the file and being otherwise duly advised in the premises, it is ORDERED AND ADJUDGED as follows: 1. Plaintiff and Intervening Plaintiffs’ Motion to Amend Final Judgment is granted; 2. Paragraph C, on the final page of the Judgment, shall read as follows: “Plaintiff's Counts I, III, IV, and V are hereby dis- missed finally.” 3. Paragraph E, on the final page of the Judgment, shall read as follows: “This, court upholds the constitutionality of Senate Bill 8-A, but recognizes an exemption from the fuel tax for Plaintiff and Intervenor foreign airlines ee 50a whose governments have entered into executive agree- ments with the United States prior to the enactment of this Bill, or who have been granted Foreign Air Carrier Permits by the United States on a basis of reciprocity and comity.” DONE AND ORDERED in Chambers, Tallahassee, Leon County, Florida, this 14th day of June, 1983. /s/ Ben C. Willis BEN C. WILLIS Circuit Court Judge \ 5la APPENDIX E IN THE CIRCUIT COURT OF THE SECOND JUDICIAL CIRCUIT IN AND FOR LEON COUNTY, FLORIDA Case No. 83-761 DELTA AIR LINES, INC., a Delaware Corporation, et al., Plaintiffs, V. STATE OF FLORIDA, DEPARTMENT OF REVENUE, et al., Defendants. FINAL JUDGMENT This cause is before the Court on final hearing on the pleadings, evidence and argument of counsel for the re- spective parties, and on the briefs of counsel for the par- ties, intervenors and amicus curiae, and the Court having considered all of same and being otherwise advised in the premises, it is ORDERED AND ADJUDGED: 1. The Plaintiff asserts that Senate Bill No. 8-A, Chapter 83-3, Florida Statutes, titled “an act relating to transportation finance and administration” violates a) its constitutional right to equal protection under the United States and Florida Constitutions, b) the Commerce Clause of the United States Constitu- tion, c) Article III, Sections 10 and 11 of the Florida Con- stitution. 52a Intervenor Eastern Airlines also asserts Senate Bill 8-A is an improper delegation of legislative authority. Plain- tiff prays for declaratory and injunctive relief to prevent Defendant Department of Revenue (DOR) from assessing and collecting such tax. 2. Senate Bill 8-A was signed into law on March 8, 1983 to become effective April 1, 1983. It revises the tax structure of Chapters 206, 212, and 220, Florida Statutes. Prior to the enactment of said Bill motor fuel was taxed pursuant to Part I, Chapter 206 at the rate of 8 cents per gallon as follows: a) a “first gas tax” of 4 cents to be used for mainte nance and construction of state road [sic], b) a “second gas tax” of 2 cents to be used by counties to secure bond obligations, c) a “seventh-cent tax’ used by counties for public transportation, and d) an “eighth-cent tax” used by municipalities for transportation-related expenditures. Prior to the enactment of Senate Bil! 8-A, special fuel was taxed pursuant to Part II, Chapter 206 at the rate of 8 cents per gallon with distribution the same as Part I, Chapter 206. Aviation fuel was exempt from Part II. Prior to the enactment of Senate Bill 8-A, pursuant to Chapter 212, common carriers paid a sales tax of 5% of the sales price of fuel, such tax accruing and being col- lected upon first withdrawal from the storage facility. This tax was prorated according to the ratio of the inter- state mileage of the carrier to its total mileage for the previous fiscal year. Prior to the enactment of Senate Bill 8-A, Chapter 220 imposed an income tax on corporations without credit for motor or special fuel taxes paid. 53a 8. Senate Bill 8-A eliminates the “first gas tax” of Part I, Chapter 206 in 206.41 and reduces the special fuel tax in Part II from 8 cents to 4 cents. Distribution is the same as prior to enactment. Thus, under both Part I and Part II of Chapter 205 the tax is reduced from 8 cents to 4 cents per gallon. Under Chapter 212, the Bill now imposes a 5% sales tax on motor and special fuel based on a predetermined price of $1.148, or 5.7 cents, per gallon until June 1, 1985, at which time the DOR will determine the price according to the most recent Consumer Price Index. Dis- tribution is for “transportation purposes” per Section 206.46 from a Transportation Trust Fund. The Chapter 212 tax upon common carriers will continue to be pro- rated by intrastate mileage; however airlines will be taxed on all aviation fuel purchased in Florida, regardless of use in interstate or intrastate travel. Chapter 220 now affords a 50% or $5 million (the lesser) credit to Florida- based corporations with 1,200 or more employees. 4. Plaintiff objects to Senate Bill 8-A on the grounds it violated [sic] equal protection by subjecting them to dif- ferent tax treatment than other common carriers, creates a classification which is discriminated against by higher tax rates, subjects them to a predetermined price not re- lated to the actual price of aviation fuel, and discrimi- nates against foreign corporations by allowing the Chap- ter 220 tax credit only to corporations with their corporate or home office in Florida. Plaintiff alleges Senate Bill 8-A violates the United States Constitution Commerce Clause by exceeding the state limitations in taxing interstate commerce because the apportionment is unfair and not based on intrastate use, agricultural and fishing interests are favored by total fuel tax exemption, the tax credit is an attempt to force corporations to establish corporate offices in Florida, there is no nexus between the tax on airlines and the use of 54a funds for roads, and the tax is not fairly related to serv- ices provided to interstate airlines. Plaintiff originally claimed Senate Bill 8-A violated Ar- ticle III, Sections 10 and 11 of the Florida Constitution because it was a special law. However, in light of the recent Supreme Court decision in Department of Legal Affairs, State of Florida, et al. v. Sanford-Orlando Kennel Club., Inc., 8 F.L.W., (Fla. April 14, 1983), in which the Court stated it did not matter that the legislature was aware the bill would benefit a certain business, Plaintiff has abandoned this allegation. Plaintiff had originally prayed for attorneys fees pursuant to 42 U.S.C. 1983 and 1988, which issue this court ruled against in a hearing May 11, 1983. 5. Plaintiff Delta Airlines is a Delaware corporation registered to do business in Florida and certified by the Civil Aeronautics Board. They operate from 9 airports in Florida and employ approximately 4,000 employees. Intervenors are various airlines subject to the fuel tax whose aggregate employees number approximately 1,800. None of the intervenors are qualified to receive the Chap- ter 220 tax credit either because of size or location out- side Florida. Delta claims irreparable injury of $9.7 million per year without retroactive interest if Senate Bill 8-A is declared unconstitutional [sic], prolonged legal proceedings, individious discrimination without remedy, and competitive advantage to other classes of common carrers and Florida-based corporations. For these rea- sons, Plaintiff requests an immediate temporary injunc- tion followed by a permanent injunction and declaratory relief. 6. Defendant DOR contends Senate Bill 8-A is a valid tax measure reasonably related to the legitimate state purpose of stabilizing tax structures and therefore is not subject to the constitutional infirmities urged by Plain- tiff. Defendant contends that it has long been established that sales and use taxes imposed for the privilege of en- 55a gaging in business in the state are valid. Gaulden v. Kirk, 47 So.2d 567 (Fla. 1950); Kirk v. Western Con- tracting Company, Inc., 216 So.2d 503 (Fia. 1 DCA 1968), cert. den. 225 So.2d 535, app. dism. 226 So.2d 815; Florida Revenue Commission v. Maas Brothers, Inc., 226 So.2d 849 (Fla. 1 DCA 1969), cert. den. 237 So.2d 177. Plaintiff elaborates on the point that Senate Bill 8-A is a user fee and not fairly related to the airlines’ use of public facilities or roads. However, as Defendant points out, this is an excise tax, not a user fee, and ‘“‘the con- stitutional power to levy taxes does not depend upon the enjoyment of the taxpayer of any special benefit from the use of the funds.” Nashville, Chattanooga, & St. Louis Railway v. Wallace, 288 U.S. 249 (1933) at page 269. EQUAL PROTECTION The three main areas of Plaintiff’s complaint in the equal protection area are: partial exemptions to other common carriers, predetermined price unrelated to actual price of aviation fuel, and discriminatory tax credit struc- ture. First, Plaintiff asserts that all common carriers should be treated alike and airlines should also receive the pro- rated treatment under Chapter 212 that other common carriers receive. Plaintiff cites cases to support this as- sertion that interstate carriers are “similarly situated” for tax purposes, Seaboard Air Line Ry. v. Simon, 47 So. 1001 (Fla. 1908) where all carriers are liable for lost or damaged goods; Braniff Airways, Inc. v. Nebraska State Board of Equalization and Assessment, 347 U.S. 590 (1954) that imposition of taxes on aircraft must be the same as for riverboats; Ott v. Mississippi Valley Barge Line Co., 336 U.S. 169 (1949) that water transportation taxed same as other carriers; Delta Air Lines, Inc. »v. State of Alabama, No. CV-1162 (Cir. Ct. Montgomery, Ala. May 27, 1981) that airlines are not utilities and receive the same treatment as other transportation modes. 56a Defendant counters that states have wide latitude in tax- ation and creating classifications. In Madden v. Ken- tucky, 309 U.S. 83 (1940), the Supreme Court stated at page 88: “In taxation even more than in other fields, legisla- tures possess the greatest freedom of classification.” The Supreme Court has upheld tax classification in ad valorem taxation of corporations, Lehnhausen v. Lake- shore Auto Parts Co., 410 U.S. 356 (1973), reh. den. 411 U.S. 910; and exempting non-residents from ad valorem taxes on merchandise held in warehouses, Allied Stores of Ohio v. Bowers, 348 U.S. 522 (1959), where the Court states there is “no iron rule of equality prohibiting the flexibility and variety that are appropriate to reasonable schemes of state taxation’, p. 526. The courts of Florida have followed Lehnhausen, Mad- den, and Allied Stores in Markham v. Yankee Clipper Hotel, Inc., et al., 427 So.2d 383 (Fla. 4th DCA, 1983) ; and in Just Valuation & Taxation League, Inc. v. Simp- son, 209 So.2d 229 (Fla. 1968), in which the Florida Su- preme Court states at p. 232: “the presumption of constitutionality can be over- come only by the most explicit demonstration that a classification is a hostile and oppressive discrimina- tion against particular persons and classes. The bur- den is on the one attacking the legislative arrange- ment to negative every conceivable basis which might support it.” The Florida Supreme Court has upheld the constitu- tionality of Chapter 212 in Gaulden v. Kirk, 47 So.2d 567 (Fla. 1950) where a 3% tax was imposed on rentors and lessors of living quarters, but accommodations rented for longer than 6 months and two-family apartment buildings were exempt. The court held this to be a reasonable classification. Likewise the distinction between airlines and other carriers is a reasonable classification and Plain- 57a tiff has not sustained its burden to “‘negative every con- ceivable basis which might support it”. Just Valuation, supra, Plaintiff maintains that this distinction is arbitrary and unreasonable and will not pass constitutional muster, citing Hartford Steam Boiler Inspection and Insurance Co. v. Harrison, 301 U.S. 459 (1937), to support the allegation that two different forms of business cannot be treated differently. Plaintiff states that airlines and com- mon carriers have been treated similarly for fuel tax pur- poses since 1963, and that the new bill singles out airlines to pay a disproportionate share of tax. However, Plain- tiff does not sustain its burden to demonstrate this clas- sification is “hostile and oppressive” per Just Valuation, and this court therefore holds there is no invidious dis- crimination by creation of an arbitrary classification. Classifying airlines differently from vessels and railroads fer fuel tax purposes is not arbitrary. Airlines enjoy ad- vantages and must tolerate some disadvantages due to their distinctive nature. Tor example, airlines enjoy the advantage of being exempt from ad valorem taxes on the lease of property from the county or other governmental unit pursuant to Chapter 80-368. Vessels and railroads are not exempt. Even though Plaintiff argues that 80-368 also benefits hotels, restaurants, and racetracks, it does not object to this favorable classification and only when disadvantaged does Plaintiff object. Also, proration of mileage for aircraft has proven difficult in the past be- cause of flight patterns over the Guif of Mexico and At- lantic Ocean to avoid accumulation of intrastate mileage. Defendant approximates that in the past airlines were paying only about 6% of their actual tax due to these flight patterns to avoid flying over the state. Second, Plaintiff asserts the predetermined price of $1.148 per gallon is not related to the actual price of avia- tion fuel which customarily is less expensive and at the time of writing was about $.90 per gallon. Plaintiff would have —— 58a the DOR adjust the price as market price fluctuates at [sic] tax aviation fuel at the lower rate. This suggestion is not feasible because of the varying prices in different locations, the volatile nature of gas prices, and the objec- tive of the legislature to have a stabilized tax structure. Rather than discriminate against airlines, the legislature has imposed a set price per gallon and all consumers are taxed equally regardless of nature of transport. The tax is levied on first withdrawal from the storage tanks and not at the retail level which latter price would be rela- tively impossible to ascertain. Plaintiff urges the court to allow the airlines to self-assess taxes as in the past and insists there have been no problems previously. However, as DOR points out, the discrepancy in self assessment renders this point meritless. For the foregoing reasons, this court holds the predetermined price structure does not invidiously discriminate against airlines. Third, Plaintiff maintains the Chapter 220 tax credit structure favors local business and disadvantages foreign corporations registered in Florida but without a home office there. Plaintiff cites Department of Revenue v. Amrep, 358 So.2d 1343 (Fla. 1978) for the proposition that once a corporation is admitted to be registered in a state, it enjoys the full equal protection of the law. This is true, but it also must bear the cost of being privileged to do business in the state. Plaintiff contends that state attempts to tax foreign corporations more stringently than domestic corporations have been invalidated in Wheeling Steel Corporation v. Glander, 337 U.S. 562 (1949) deal- ing with intangible tax on accounts receivable; and WHYY, Inc. v. Borough of Glassboro, 393 U.S. 117 (1968) which afforded out-of-state non-profit corporations tax exemptions equal to domestic non-profit corporations; and O’Connell v. Kontojohn, 179 So. 802 (Fla. 1938) which invalidated a discriminatory Pensacola tax based on non-city residents who operated bakery trucks in that city. However, the Senate Bill 8-A tax credit is valid be- cause there is a rational basis behind allowing such credit 59a for domestic corporations: encouraging foreign corpora- tions to establish home offices in Florida. Further, the Supreme Court states in Carmichael v. Southern Coal & Coke Company, 301 U.S. 495 (1936) at page 509: “The legislature is not bound to tax every member of a class or none, but may make distinctions of de- gree having a rational basis.” Therefore, if the legislature reasonably believes a tax credit for domestic corporations will further its objective of encouraging in-state incorporation, it may afford this more favorable treatment without discrimination. Just as the legislature enjoys wide latitude in taxation and classifications, it has wide latitude in promoting business where the public interest is served. Carmichael at page 512. In Sanford-Orlando Kennel Club, supra, the Florida Supreme Court states that the legislature may benefit a certain class so long as it is not unreasonable. There is no unreascnable burden on airlines to establish a home office in Florida if they wish to receive a tax credit. Also, this tax credit is on corporation income tax, not on the sales tax, so a corporation must first pay corporate in- come tax to avai! itself of the Chapter 220 credit. For these reasons, this court holds the tax credit does not favor local business nor discriminate against foreign corporations. COMMERCE CLAUSE Plaintiffs contend that Senate Bill 8-A is a state at- tempt to regulate commerce between the states and ex- ceeds state limitations pursuant to the United States Constitution, Article I, Section 8, Clause 3 grant to Con- gress. Assuming this bill affects interstate commerce, the state tax must meet the four prongs of Complete Auto Transit v. Brady, 430 U.S. 274 (1977), set out on page 278 of that opinion: 1) activity taxed has a sufficient nexus with the State, 60a 2) the tax may not discriminate against interstate commerce, 3) the tax must be fairly apportioned; and 4) the tax must be related to services provided by the state. Plaintiff contends that Senate Bill 8-A fails at least two prongs of this test because this is a road tax unrelated to airline services, and because t' 2 tax is not fairly appor- tioned and favors certain carriers and local businesses. Plaintiff insists this is a “user” tax because Governor Graham called this session to raise $250 million to fund road construction and maintenance. However, the work- ing of section 206.46 specifically eliminated reference to “construction and maintenance of state roads” in alloca- tion funds from the State Transportation Trust fund into which the fuel taxes are deposited. Instead, the section is worded to provide funds for “transportation purposes” which includes airport and aircraft services, contrary to the assertion of Plaintiff. Plaintiff maintains that because these funds are used for roads and airlines do not use roads, the tax is unrelated to services pro- vided by the state. This is obviously not the case, as the legislature expressly included all transportation purposes in the allocation of funds. Plaintiff attempts to convince the court that this is a user tax and not an excise tax and is therefore subject to a higher standard of scrutiny. This argument is flawed. As previously noted, favoring local businesses is not necessarily unreasonable or arbitrary. In the case of the Chapter 220 tax credit, Plaintiff is not unreasonably disfavored as there is a legitimate state purpose in en- couraging corporate home offices to locate in Florida and to otherwise attract industry to the state. Plaintiff can merely incorporate in Florida if it wishes to receive the credit. Use of public airport facilities is a privilege the airlines enjoy and they should share the cost of these 6la facilities so long as the cost is reasonable. Commonwealth Edison Co. v. Montana, 453 U.S. 609 (1981) supports this statement and goes on to say that courts should not inquire inte the amount of the tax or value of benefit received. In Montana, a severance tax on coal mined in Montana was upheld as a general revenue tax even though 90% was shipped out of state. Plaintiff tries to distinguish this case, saying Senate Bill 8-A is a use tax. However, this distinction does not withstand scrutiny. The court in Montana made it very clear thet a state can regulate interstate commerce so long as there is no discrimination. In the case at bar the tax is levied upon all consumers equally based on the quantity of fuel with- drawn and there is no discrimination. The Supreme Court of the United States also deferred to the legislature in establishing tax measures in Montana. In Evansville- Vanderburgh Airport Authority District v. Delta Air- lines, Inc., 405 U.S. 707 (1972), a “use” charge for enplaning passengers was upheld as rationally related to the use of facilities, even though such charge was “im- perfect”. Therefore, even if the Florida fuel tax were considered a use tax, this tax is valid because the funds are allocated for “public transportation” including air facilities, and according to Montana the benefit does not have to be measured with mathematical accuracy. The Complete Auto test prong #4 does not require a propor- tional relation of tax to benefit receive, but only requires that the tax be related to the services provided. Com- plete Auto also states that interstate commerce must pay its own way, similar to the reasoning in Montana. To supports [sie] its contention that Senate Bill 8-A favors local business by extending a tax credit only to Florida-based corporations, Plaintiff cites Maryland v. Louisiana, 451 U.S. 725 (1981) where a tax on natural gas pumped out-of-state created a burden on interstate commerce. Here the tax is on fuel purchased in the state and all consumers are taxed equally so there is no similar 62a burden on interstate commerce. Boston Stock Exchange v. State Tax Commission, 429 U.S. 318 (1977) involves a New York statute which taxed out-of-state transfers. Here the legislature is not trying to tax any out-of-state trans- actions. In Archer Daniels Midland Co. v. State, 315 N.W.2d 597 (Minn. 1982), a tax exemption for gasohol produced from Minnesota products with no comparable exemption for out-of-state product production, was de- clared invalid as a restriction on interstate commerce. Senate Bill 8-A in no way affects out-of-state production or consumption. The Florida Supreme Court has upheld special tax exemptions to encourage Florida industry. Faircloth v. Mr. Boston Distiller Corp., 245 So.2d 240 (Fla. 1970). This court likewise finds there is no burden on interstate commerce by Senate Bill 8-A and no viola- tion of the Commerce Clause. IMPROPER DELEGATION OF LEGISLATIVE AUTHORITY Intervenor Eastern Airlines raises an additional point that Senate Bill 8-A is an improper delegation of legisla- tive authority by allowing the DOR to determine the fuel fixed price after June 1, 1985. Gindl v. Department of Education, 396 So.2d 1105 (Fla. 1979, corrected on rehearing 1981) allows the Department of Education to appropriate state funds to a state agency based on the Florida Price Level Index. The method of appropriation in Senate Bill 8-A is equivalent to the Gindl method and is a proper delegation of authority. SEVERABILITY Both parties agree that this bill should not be severed in part. Additionally, there is no severability clause in the bill. However, in view of the rulings made herein, it is unnecessary to consider or determine any questions of severability. a 63a ACCORDINGLY, IT iS FURTHER ORDERED AND ADJUDGED: A. This Court finds and determines that Chapter 83-3, Laws of Florida, also referred to as Senate Bill &-A, is a valid enactment and is not in conflict with the Equal Protection clauses of the United States Constitution (14th Amendment) ner the Florida Constitution (Article I, Sec- tion 2); nor with the Commerce Clause of the United States Constitution (Article I, Section 8, Clause 3). B. It is further found that the reference to the Con- sumer Price Index in future applications of the price per gallon to be used in computing the tax is not an unlawful delegation of legislative power. The Consumer Price In- dex is a computation by governmental agency of average prices of items of commerce. Reference to this measure is not a delegation of legislative discretion but an eco- nomic computation relied upon to apply a legislative policy of a tax based upon an approximate price prevail- ing at a given time. C. All challenges to the validity of this statute are found to be without merit. D. All prayers that the Defendant Department of Revenue be restrained from enforcement of Chapter 83-3 or collecting taxes imposed thereon are hereby denied. E. The Amended Complaint and this cause be and the same are hereby dismissed finally. DONE AND ORDERED, this 23rd day of May, 1983. ‘s/ Ben C. Willis BEN C. WILLIS Circuit Judge 64a APPENDIX F IN THE SUPREME COURT STATE OF FLORIDA Case No. 63,989 STATE OF FLORIDA, DEPARTMENT OF REVENUE, Appellants/Cross Appellees, V. LINEAS AEREAS COSTARRICENSES, S.A., et al., Appellees/Cross Appellants. [Filed June 29, 1984] Appeal From the Second Circuit Court in and for Leon County APPELLEES’ MOTION FOR REHEARING DAVID A. NELSON N. FRASER SCHUH, III SQUIRE, SANDERS & DEMPSEY Suite 3000, Miami Center 100 Chopin Plaza Miami, Florida 33131 Phone (305) 577-8700 Attorneys for Appellees/Cross Appellants 65a APPELLEES’ MOTION FOR REHEARING Pursuant to Rule 9.330(a) of the Florida Rules of Ap- pellate Procedure, Appelies respectfully move for rehear- ing of the decision filed herein on June 14, 1984. The points of law or fact justifying such rehearing are these: 1. The United States government has entered into 2ir transport agreements specifically addressing ex- cise taxes imposed on fuel “by State, regional and local authorities” and establishing a policy of recip- rocal exemption from such taxes. 2. By virtue of ‘Most Favored Nation” provisions contained in several other international agreements, the United States has agreed to extend the protection of these state tax provisions to a number of addi- tional foreign nations. 3. The provisions of the agreements and treaties in question bring this case within the “speaking with one voice” principle of Japan Line Ltd. v. County of Los Angeles, 441 U.S. 434 (1979). In Department of Revenue v. Wardair Canada, Ltd., No. 64,036 (Fla. June 14, 1984), this Court determined that the tax exemption provisions of the Non-Scheduled Air Service Agreement between the United States and Canada were inapplicable because that agreement “spe- cifically addresses only national customs, duties, excise taxes and charges... .” Slip Op., p. 3. (Emphasis sup- plied.) Wardair was held to be controlling in Department of Revenue v. Air Jamaica Ltd., No. 64,035 (Fla. June 14, 1984), and the instant case was disposed of solely on the basis of the decisions in the companion cases. Unlike the Canadian agreement involved in Wardair, the air transport agreements that the United States has concluded with several of the countries whose carriers are 66a parties to this case and the Air Jamaica case deal ex- pressly with state taxes as well as national taxes. The agreement with Costa Rica, introduced in the Court below as part of plaintiffs’ Exhibit 2 (R370-71), is illustrative: Article 9 of the agreement (a copy of which is attached hereto as an Appendix) specifically refers in paragraph 1 to excise taxes on fuel, among other things; provides in paragraph 2(c) that fuel, lubricants and consumable tech- nical supplies “shall... be exempt” from such taxes on a reciprocal basis; and mandates in paragraph 5 that each party use its best efforts to secure for the other parties’ airlines “an exemption from taxes, duties, charges and fees imposed by State, regional and local authorities on the items specified in paragraphs (1) and (2) of this Article... .” (Emphasis supplied. ) A similar undertaking with respect to “taxes, duties, charges and fees imposed by State, regional and local au- thorities” is found in Article 10(6) of the protocol of April 4, 1979, between the governments of the United States and Jamaica relating to air transport, T.I.A.S. 96138, amending the Air Transport Services Agreement of October 2, 1969, T.I.A.S. 6770. See also the agreements identified at page 4 of the trial court’s judgment in Air Jamaica, set forth as an Appendix to Appellee’s Answer Brief herein. The air transport agreements that address state taxes by name clearly reflect a federal policy in favor of recip- rocal exemption from excise taxes at the state level. “A proliferation of state and local taxes,” the United States Department of State has confirmed, ‘would frustrate the international system of reciprocal tax exemptions... .” Plaintiff's Exhibit 6, R373-74. Speaking specifically of the Florida tax at issue here, the State Department ad- vised the Florida Department of Revenue that failure to exclude foreign airlines from the tax “will cause serious foreign relations preblems.” Jd. 67a The impact of these provisions is not limited to na- tions whose aviation agreements with the United States specifically include them. The Treaty of Peace, Amity, Navigation and Commerce between the United States and New Granada [now Colombia] 9 Stat. 881, TS 54 (1848), cited by the Appellees [Answer Brief at 8] provides that “any particular favor [granted] to other nations, in re- spect of commerce and navigation,” shall “immediately become common to the other party ....”’ Other treaties with provisions of the same general import are also cited in Appellees’ Answer Brief. By extending the provisions regarding state taxation of airlines such as those found in the agreement with Costa Rica to many other nations, these most favored nation provisions further establish the uniform international policy of the United States favor- ing reciprocal exemption of airlines from state and local fuel taxes. Because the United States has entered into air trans- port agreements expressly addressing state taxes, the nec- essity for federal uniformity is even clearer here than it was in Japan Line Ltd. v. County of Los Angeles, 441 U.S. 484 (1979). The California property tax at issue in that case was not specifically addressed in the Customs Convention on Containers which this country had con- cluded with Japan, 441 U.S. at 452, but the United States Supreme Court nevertheless held that the California tax could not be applied to Japanese containers for the rea- son, among others, that it prevented the federai govern- ment from “speaking with one voice” in international trade. It follows a fortiori, we submit, that the “negative implications of Congress’ power to ‘regulate Commerce with foreign Nations’ under the Commerce Clause,” 441 U.S. at 449, preclude Florida from imposing an excise tax on fuel used by the foreign air carriers here. The motion for rehearing should be granted. 68a Respectfully submitted, /3/ N. Fraser Schuh, III DAvip A. NELSON N. FRASER SCHUH, III SQUIRE, SANDERS & DEMPSEY Suite 3000, Miami Center 100 Chopin Plaza Miami, Florida 33131 Phone— (305) 577-8700 Attorneys for Appellees/ Cross Appellants CERTIFICATE OF SERVICE I HEREBY CERTIFY that a true and correct copy of the foregoing Motion for Rehearing was sent by United States Mail, postage prepaid, this 27th day of June, 1984, to LARRY LEVY, ESQ., General Counsel, Department of Revenue, Carlton Building, Room 203, Tallahassee, Flor- ida 32301; JOSEPH C. MELLICHAMP, III, ESQ., As- sistant Attorney General, Department of Legal Affairs, The Capitol, LL0O4, Tallahassee, Florida 32301; and JAMES E. TRIBBLE, ESQ., Blackwell, Walker, Gray, Powers, Flick & Hoehl, Suite 2400, AmeriFirst Building, 1S.E. 38rd Avenue, Miami, Florida 33131. /s/ N. Fraser Schuh, III Attorney for Appellees 69a APPENDIX AIR TRANSPORT AGREEMENT BETWEEN THE GOVERNMENT OF THE UNITED STATES OF AMERICA AND THE REPUBLIC OF COSTA RICA a * * * ARTICLE 9 Customs Duties and Taxes (1) On arriving in the territory of one Party, aircraft operated in international air transportation by the des- ignated airlines of the other Party, their regular equip- ment, ground equipment, fuel, lubricants, consumable technical supplies, spare parts, including engines, aircraft stores (including but not limited to such items as food, beverages and liquor, tobacco and other products destined for sale to or use by passengers in limited quantities dur- ing the flight), and other items intended for or used solely in connection with the operation or servicing of aircraft engaged in international air transportation shall be exempt, on the basis of reciprocity, from all import restrictions, property taxes and capital levies, customs duties, excise taxes, and similar fees and charges imposed by the national authorities, and not based on the cost of services provided, provided such equipment and supplies remain on board the aircraft. (2) There shall also be exempt, on the basis of reci- procity, from the taxes, duties, fees and charges referred to in paragraph (1) of this Article, with the exception of charges based on the cost of the service provided: (a) aircraft stores introduced into or supplied in the territory of a Party and taken on board, within reason- able limits, for use on outbound aircraft of a designated airline of the other Party engaged in international air transportation, even when these stores are to be used on 70a a part of the journey performed over the territory of the Party in which they are taken on board; (b) ground equipment and spare parts including en- gines introduced into the territory of a Party for the servicing, maintenance or repair of aireraft of a desig- nated airline of the other Party used in international air transportation; and (c) fuel, lubricants and consumable technical supplies introduced inte or supplied in the territory of a Party for use in an aircraft of a designated airline of the other Party engaged in international air transportation, even when these supplies are to be used on a part of the jour- ney performed over the territory of the Party in which they are taken on board. (3) Equipment and supplies referred to in paragraphs (1) and (2) of this Article may be required to be kept under the supervision or control of the appropriate au- thorities. (4) The exemptions provided for by this Article shall also be available where the designated airlines of one Party have contracted with another airline, which simi- larly enjoys such exemptions from the other Party, for the loan or transfer in the territory of the other Party of the items specified in paragraphs (1) and (2) of this Article. (5) Each Party shall use its best efforts to secure for the designated airlines of the other Party, on the basis of reciprocity, an exemption from taxes, duties, charges and fees imposed by State, regional and local authorities on the items specified in paragraphs (1) and (2) of this Article, as weil as from fuel through-put charges, in the circumstances described in this Article, except to the ex- tent that the charges are based on the actual cost of pro- viding the service. ee LL —~t T1la APPENDIX G IN THE SUPREME COURT OF FLORIDA Wednesday, September 12, 1984 Case No. 63,989 Circuit Court Case No. 83-964 (Leon) DEPARTMENT OF REVENUE, Appellant/Cross Appellee, VS. LINEAS AEREAS COSTARRICENSES, et al., Appellee, Cross Appellant. On consideration of the motion for rehearing filed by attorneys for appellee/cross-appellant, and response thereto, IT IS ORDERED by the Court that said motion be and the same is hereby denied. BOYD, C.J., ADKINS, CVERTON, ALDERMAN, Mc- DONALD and SHAW, JJ., Concur N 72a C ec: Hon. Paul F. Hartsfield, Clerk Hon. Ben C. Willis, Chief Judge David A. Nelson, Esquire and N. Fraser Schuh, III, Esquire Joseph C. Mellichamp, III, Esquire Larry Levy, Esquire James E. Tribble, Esquire A True Copy TEST: Sid J. White Clerk Supreme Court By: Debbie Causseaux Deputy 73a APPENDIX H IN THE SUPREME COURT S [Text truncated at 120,000 characters. The full text is on the page linked above.] --- Source: Frix Law Library, https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40385017_0292%3A2. Public record. Not legal advice.