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lwpat
lwpat, Attorney
Category: Business Law
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Experience:  Attorney with over 35 years of business experience.
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Discuss the commerce clause of Article I, Section 8, of the

Customer Question

Discuss the commerce clause of Article I, Section 8, of the Constitution, and describe how the Supreme Court applied it in South Central Bell Telephone Company v. Alabama.

My teacher says after completing the lesson that he has devised the question from, I should be able to:

After completing this lesson, I should be able to do the following:
-explain the Constitution's separation of powers
-discuss the importance and coverage of the commerce clause
-explain how the First Amendment protects speech, religious practices, and a free press
-describe the difference between the levels of First Amendment protection and where each applies
-describe the difference between substantive and procedural due process
-discuss the different levels of judicial scrutiny under the Fourteenth Amendment's "equal protection" clause

So if any of that can tie into the answer, that would be great. Also, please try and use examples. Thanks.
Submitted: 5 years ago.
Category: Business Law
Expert:  lwpat replied 5 years ago.

Article I, Section. 8:

The Congress shall have Power...To regulate Commerce with foreign Nations, and among the several States, and with the Indian Tribes.

Today, the Court accepts generally accepts the power of Congress (1) to regulate the channels of interstate commerce, (2) to protect the instrumentalities of interstate commerce and any goods or persons that travel in interstate commerce, and (3) to regulate any activities that "substantially affect interstate commerce." (Gonzales v Raich, 2005).

The state franchise tax on foreign corporations impermissibly discriminates against interstate commerce, in violation of the Commerce Clause. State law gives domestic corporations the ability to reduce their franchise tax liability simply by reducing the par value of their stock, while it denies foreign corporations that same ability. The State cannot justify this discrimination on the ground that the tax is a complementary or compensatory tax that offsets the tax burden that the domestic shares tax imposes upon domestic corporations, since the relevant tax burdens are not roughly approximate, nor are they similar in substance.

The state franchise tax on foreign corporations impermissibly discriminates against interstate commerce, in violation of the Commerce Clause. State law gives domestic corporations the ability to reduce their franchise tax liability simply by reducing the par value of their stock, while it denies foreign corporations that same ability. The State cannot justify this discrimination on the ground that the tax is a complementary or compensatory tax that offsets the tax burden that the domestic shares tax imposes upon domestic corporations, since the relevant tax burdens are not roughly approximate, nor are they similar in substance.

South Central Bell Telephone Company v. Alabama