Legal Definitions - Import–Export Clause

The Import–Export Clause, found in Article I, Section 10, Clause 2 of the U.S. Constitution, is a fundamental legal principle that prevents individual states from imposing taxes on goods that are either entering (imports) or leaving (exports) the United States. This clause ensures that the federal government, not individual states, maintains primary control over foreign commerce and prevents states from creating their own barriers to international trade.

While states cannot directly tax goods as imports or exports, the Supreme Court has interpreted this clause to allow states to apply general, non-discriminatory taxes to imported goods once they have become part of the general property within the state. This means a state can tax imported items, provided the tax does not specifically target foreign goods or favor locally produced goods over imported ones. This clause is sometimes also referred to as the Export Clause.

Here are some examples illustrating the application of the Import–Export Clause:

• Example 1: Prohibited State Export Tax

  Imagine "Grain State," a major agricultural producer, decides to impose a special 10% tax on all wheat grown within its borders that is destined for shipment to foreign countries. The state's goal is to generate revenue from international trade passing through its ports.

  Explanation: This state tax would violate the Import–Export Clause. The clause explicitly prohibits states from taxing goods specifically designated as exports. Grain State cannot levy a tax that directly burdens the act of exporting its wheat, as this would interfere with the federal government's exclusive power to regulate foreign commerce and could create an uneven playing field for international trade among states.

• Example 2: Prohibited Discriminatory State Import Tax

  "Textile State" has a thriving domestic clothing industry. To give its local businesses an advantage, Textile State passes a law imposing a "foreign garment surcharge" of $5 per item on all clothing imported from other countries, while clothing manufactured within Textile State or other U.S. states is exempt from this fee.

  Explanation: This "foreign garment surcharge" would violate the Import–Export Clause. Even though the clothing has entered the state, the tax is discriminatory because it specifically targets and burdens imported goods while exempting domestic ones. The clause prevents states from enacting taxes that favor local products over foreign imports, as this creates an unfair barrier to international trade.

• Example 3: Permissible Non-Discriminatory State Tax on Imported Goods

  "Furniture State" has a standard 7% sales tax that applies to all retail purchases made within its borders, regardless of the origin of the goods. A shipment of imported furniture arrives in Furniture State, clears customs, and is then displayed and sold in a local furniture store. The 7% sales tax is applied to the sale of this imported furniture, just as it would be applied to furniture manufactured domestically and sold in the same store.

  Explanation: This application of the general sales tax is permissible under the Import–Export Clause. The tax is not levied *on* the act of importing the furniture, nor does it discriminate against foreign goods. Once the imported furniture has been removed from its original import packaging and has become part of the general mass of property within the state (i.e., offered for sale in a retail store), it is subject to the same non-discriminatory taxes that apply to all other goods sold in Furniture State.