435 U.S. 734 (1978)

DEPARTMENT OF REVENUE OF WASHINGTON
v.
ASSOCIATION OF WASHINGTON STEVEDORING COMPANIES ET AL.

No. 76-1706.

Supreme Court of United States.

Argued January 16-17, 1978. Decided April 26, 1978. CERTIORARI TO THE SUPREME COURT OF WASHINGTON.

*736 Slade Gorton, Attorney General of Washington, argued the cause for petitioner. With him on the briefs were Richard H. Holmquist, Senior Assistant Attorney General, and Matthew J. Coyle, Assistant Attorney General.

John T. Piper argued the cause for respondents. With him on the brief was D. Michael Young.

MR. JUSTICE BLACKMUN delivered the opinion of the Court.

For the second time in this century, the State of Washington would apply its business and occupation tax to stevedoring. The State's first application of the tax to stevedoring was unsuccessful, for it was held to be unconstitutional as violative of the Commerce Clause^[1] of the United States Constitution. Puget Sound Stevedoring Co. v. State Tax Comm'n, 302 U. S. 90 (1937). The Court now faces the question whether Washington's second attempt violates either the Commerce Clause or the Import-Export Clause.^[2]

*737 I

Stevedoring is the business of loading and unloading cargo from ships.^[3] Private stevedoring companies constitute respondent Association of Washington Stevedoring Companies; respondent Washington Public Ports Association is a non-profit corporation consisting of port authorities that engage in stevedoring activities. App. 3. In 1974 petitioner Department of Revenue of the State of Washington adopted Revised Rule 193. pt. D. Wash. Admin. Code 458-20-193-D, to implement the State's 1% business and occupation tax on *738 services, set forth in Wash. Rev. Code §§ 82.04.220 and 82.04.290 (1976).^[4] The Rule applies the tax to stevedoring and reads in pertinent part as set forth in the margin.^[5]

Revised Rule 193D restores the original scope of the Washington business and occupation tax. After initial imposition *739 of the tax in 1935,^[6] the then State Tax Commission^[7] adopted Rule 198 of the Rules and Regulations Relating to the Revenue Act of 1935.^[8] That Rule permitted taxpayers to deduct certain income received from interstate and foreign commerce. Income from stevedoring, however, was not described as deductible. When, in 1937, this Court in Puget Sound invalidated the application of the tax to stevedoring, the Commission complied by adding stevedoring income to the list of *740 deductions.^[9] The deduction for stevedoring remained in effect until the revision of Rule 193 in 1974.^[10]

Seeking to retain their theretofore-enjoyed exemption from the tax, respondents in January 1975 sought from the Superior Court of Thurston County, Wash., a declaratory judgment to the effect that Revised Rule 193D violated both the Commerce Clause and the Import-Export Clause. They urged that the case was controlled by Puget Sound, which this Court had reaffirmed in Joseph v. Carter & Weekes Stevedoring Co., 330 U. S. 422, 433 (1947) (together, the Stevedoring Cases). Absent a clear invitation from this Court, respondents submitted that the Superior Court could not avoid the force of the Stevedoring Cases, which had never been overruled. Record 9.^[11] Petitioner replied that this Court had invited rejection *741 of those cases by casting doubt on the Commerce Clause analysis that distinguished between direct and indirect taxation of interstate commerce. Id., at 25-37, citing, e. g., Interstate Pipe Line Co. v. Stone, 337 U. S. 662 (1949); Western Live Stock v. Bureau of Revenue, 303 U. S. 250 (1938). Petitioner also argued that the Rule did not violate the Commerce Clause because it taxed only intrastate activity, namely, the loading and unloading of ships, Record 17-20, and because it levied only a nondiscriminatory tax apportioned to the activity within the State. Id., at 20-22. The Rule did not impose any "Imposts or Duties on Imports or Exports" because it taxed merely the stevedoring services and not the goods themselves, id., at 22-25, citing Canton R. Co. v. Rogan, 340 U. S. 511 (1951). The Superior Court, however, not surprisingly, considered itself bound by the Stevedoring Cases. It therefore issued a declaratory judgment that Rule 193D was invalid to the extent it related to stevedoring in interstate or foreign commerce. App. 17-18.^[12]

Petitioner appealed to the Washington Court of Appeals. Record 77. That court certified the case for direct appeal to the State's Supreme Court, citing Wash. Rev. Code § 2.06.030 (c) (1976), and Wash. Supreme Court Rule on Appeal I-14 (1) (c) (now Rule 4.2 (a) (2), Wash. Rules of Court (1977)). *742 After accepting certification, the Supreme Court, with two justices dissenting, affirmed the judgment of the Superior Court. 88 Wash. 2d 315, 559 P. 2d 997 (1977). The majority considered petitioner's argument that recent cases^[13] had eroded the holdings in the Stevedoring Cases. It concluded, nonetheless:

"[W]e must hold the tax invalid; we do so in recognition of our duty to abide by controlling United States Supreme Court decisions construing the federal constitution. Hence, we find it unnecessary to discuss the aforementioned cases beyond the fact that nowhere in them do we find language criticizing, expressly contradicting, or overruling (even impliedly) the stevedoring cases.

.....

"Fully mindful of our prior criticism of the principles and reasoning of the stevedore cases (see Washington-Oregon Shippers Cooperative Ass'n v. Schumacher, 59 Wn. 2d 159, 167, 367 P. 2d 112, 115-116 (1961)), we must nevertheless hold the instant tax on stevedoring invalid." 88 Wash. 2d, at 318-320, 559 P. 2d, at 998-999.

The two dissenting justices would have upheld the tax against the Commerce Clause attack on the ground that recent cases had eroded the direct-indirect taxation analysis employed in the Stevedoring Cases. They found no violation of the Import-Export Clause because the State had taxed only the activity of stevedoring, not the imports or exports themselves. Even if stevedoring were considered part of interstate or foreign commerce, the Washington tax was valid because it did not discriminate against importing or exporting, did not impair transportation, did not impose multiple burdens, and did not *743 regulate commerce. 88 Wash. 2d, at 320-322, 559 P. 2d, at 999-1000.

Because of the possible impact on the issues made by our intervening decision in Complete Auto Transit, Inc. v. Brady, 430 U. S. 274 (1977), filed after the Washington Supreme Court's ruling, we granted certiorari. 434 U. S. 815 (1977).

II

The Commerce Clause

A

In Puget Sound Stevedoring Co. v. State Tax Comm'n, the Court invalidated the Washington business and occupation tax on stevedoring only because it applied directly to interstate commerce. Stevedoring was interstate commerce, according to the Court, because:

"Transportation of a cargo by water is impossible or futile unless the thing to be transported is put aboard the ship and taken off at destination. A stevedore who in person or by servants does work so indispensable is as much an agency of commerce as shipowner or master." 302 U. S., at 92.

Without further analysis, the Court concluded:

"The business of loading and unloading being interstate or foreign commerce, the State of Washington is not at liberty to tax the privilege of doing it by exacting in return therefor a percentage of the gross receipts. Decisions to that effect are many and controlling." Id., at 94.

The petitioners (officers of New York City) in Joseph v. Carter & Weekes Stevedoring Co., urged the Court to overrule Puget Sound. They argued that intervening cases^[14] had permitted *744 local taxation of gross proceeds derived from interstate commerce. They concluded, therefore, that the Commerce Clause did not preclude the application to stevedoring of the New York City business tax on the gross receipts of a stevedoring corporation. The Court disagreed on the theory that the intervening cases permitted taxation only of local activity separate and distinct from interstate commerce. 330 U. S., at 430-433. This separation theory was necessary, said the Court, because it served to diminish the threat of multiple taxation on commerce; if the tax actually fell on intrastate activity, there was less likelihood that other taxing jurisdictions could duplicate the levy. Id., at 429. Stevedoring, however, was not separated from interstate commerce because, as previously enunciated in Puget Sound, it was interstate commerce:

"Stevedoring, we conclude, is essentially a part of the commerce itself and therefore a tax upon its gross receipts or upon the privilege of conducting the business of stevedoring for interstate and foreign commerce, measured by those gross receipts, is invalid. We reaffirm the rule of Puget Sound Stevedoring Company. `What makes the *745 tax invalid is the fact that there is interference by a State with the freedom of interstate commerce.' Freeman v. Hewit [329 U. S. 249,] 256." 330 U. S., at 433.

Because the tax in the present case is indistinguishable from the taxes at issue in Puget Sound and in Carter & Weekes, the Stevedoring Cases control today's decision on the Commerce Clause issue unless more recent precedent and a new analysis require rejection of their reasoning.

We conclude that Complete Auto Transit, Inc. v. Brady, where the Court held that a State under appropriate conditions may tax directly the privilege of conducting interstate business, requires such rejection. In Complete Auto, Mississippi levied a gross-receipts tax on the privilege of doing business within the State. It applied the tax to the appellant, a Michigan corporation transporting motor vehicles manufactured outside Mississippi. After the vehicles were shipped into Mississippi by railroad, the appellant moved them by truck to Mississippi dealers. This Court assumed that appellant's activity was in interstate commerce. 430 U. S., at 276 n. 4.

The Mississippi tax survived the Commerce Clause attack. Absolute immunity from state tax did not exist for interstate businesses because it "`"was not the purpose of the commerce clause to relieve those engaged in interstate commerce from their just share of state tax burden even though it increases the cost of doing business."'" Id., at 288, quoting Western Live Stock v. Bureau of Revenue, 303 U. S., at 254, and Colonial Pipeline Co. v. Traigle, 421 U. S. 100, 108 (1975). The Court therefore specifically overruled Spector Motor Service, Inc. v. O'Connor, 340 U. S. 602 (1951), where a direct gross-receipts tax on the privilege of engaging in interstate commerce had been invalidated. 430 U. S., at 288-289.

The principles of Complete Auto also lead us now to question the underpinnings of the Stevedoring Cases. First, Puget Sound invalidated the Washington tax on stevedoring activity only because it burdened the privilege of engaging in interstate *746 commerce. Because Complete Auto permits a State properly to tax the privilege of engaging in interstate commerce, the basis for the holding in Puget Sound is removed completely.^[15]

Second, Carter & Weekes supported its reaffirmance of Puget Sound by arguing that a direct privilege tax would threaten multiple burdens on interstate commerce to a greater extent than would taxes on local activity connected to commerce. But Complete Auto recognized that errors of apportionment that may lead to multiple burdens may be corrected when they occur. 430 U. S., at 288-289, n. 15.^[16]

The argument of Carter & Weekes was an abstraction. No multiple burdens were demonstrated. When a general business tax levies only on the value of services performed within the State, the tax is properly apportioned and multiple burdens *747 logically cannot occur.^[17] The reasoning of Carter & Weekes, therefore, no longer supports automatic tax immunity for stevedoring from a levy such as the Washington business and occupation tax.

Third, Carter & Weekes reaffirmed Puget Sound on a basis rejected by Complete Auto and previous cases. Carter & Weekes considered any direct tax on interstate commerce to be unconstitutional because it burdened or interfered with commerce. 330 U. S., at 433. In support of that conclusion, the Court there cited only Southern Pacific Co. v. Arizona ex rel. Sullivan, 325 U. S. 761, 767 (1945), the case where Arizona's limitations on the length of trains were invalidated. In Southern Pacific, however, the Court had not struck down the legislation merely because it burdened interstate commerce. Instead, it weighed the burden against the State's interests in limiting the size of trains:

"The decisive question is whether in the circumstances the total effect of the law as a safety measure in reducing accidents and casualties is so slight or problematical as not to outweigh the national interest in keeping interstate commerce free . . . ." Id., at 775-776.

Only after concluding that railroad safety was not advanced by the regulations, did the Court invalidate them. They contravened the Commerce Clause because the burden on interstate commerce outweighed the State's interests.

*748 Although the balancing of safety interests naturally differs from the balancing of state financial needs, Complete Auto recognized that a State has a significant interest in exacting from interstate commerce its fair share of the cost of state government. 430 U. S., at 288. Accord, Colonial Pipeline Co. v. Traigle, 421 U. S., at 108; Western Live Stock v. Bureau of Revenue, 303 U. S., at 254. All tax burdens do not impermissibly impede interstate commerce. The Commerce Clause balance tips against the tax only when it unfairly burdens commerce by exacting more than a just share from the interstate activity. Again, then, the analysis of Carter & Weekes must be rejected.

B

Respondents' additional arguments do not demonstrate the wisdom of, or need for, preserving the Stevedoring Cases. First, respondents attempt to distinguish so-called movement cases, in which tax immunity has been broad, from nonmovement cases, in which the immunity traditionally has been narrower. Brief for Respondents 23-28. Movement cases involve taxation on transport, such as the Texas tax on a natural gas pipeline in Michigan-Wisconsin Pipe Line Co. v. Calvert, 347 U. S. 157 (1954). Nonmovement cases involve taxation on commerce that does not move goods, such as the New Mexico tax on publishing newspapers and magazines in Western Live Stock v. Bureau of Revenue. This distinction, however, disregards Complete Auto, a movement case which held that a state privilege tax on the business of moving goods in interstate commerce is not per se unconstitutional.

Second, respondents would distinguish Complete Auto on the ground that it concerned only intrastate commerce, that is, the movement of vehicles from a Mississippi railhead to Mississippi dealers. Brief for Respondents 26-28. This purported distinction ignores two facts. In Complete Auto, we expressly assumed that the activity was interstate, a segment of the movement of vehicles from the out-of-state manufacturer *749 to the in-state dealers. 430 U. S., at 276 n. 4. Moreover, the stevedoring activity of respondents occurs completely within the State of Washington, even though the activity is a part of interstate or foreign commerce. The situation was the same in Complete Auto, and that case, thus, is not distinguishable from the present one.

Third, respondents suggest that what they regard as such an important change in Commerce Clause jurisprudence should come from Congress and not from this Court. To begin with, our rejection of the Stevedoring Cases does not effect a significant present change in the law. The primary alteration occurred in Complete Auto. Even if this case did effect an important change, it would not offend the separation-of-powers principle because it does not restrict the ability of Congress to regulate commerce. The Commerce Clause does not state a prohibition; it merely grants specific power to Congress. The prohibitive effect of the Clause on state legislation results from the Supremacy Clause and the decisions of this Court. See, e. g., Cooley v. Board of Wardens, 12 How. 299 (1852); Gibbons v. Ogden, 9 Wheat. 1 (1824). If Congress prefers less disruption of interstate commerce, it will act.^[18]

Consistent with Complete Auto, then, we hold that the Washington business and occupation tax does not violate the *750 Commerce Clause by taxing the interstate commerce activity of stevedoring. To the extent that Puget Sound Stevedoring Co. v. State Tax Comm'n and Joseph v. Carter & Weekes Stevedoring Co. stand to the contrary, each is overruled.

C

With the distinction between direct and indirect taxation of interstate commerce thus discarded, the constitutionality under the Commerce Clause of the application of the Washington business and occupation tax to stevedoring depends upon the practical effect of the exaction. As was recognized in Western Live Stock v. Bureau of Revenue, 303 U. S. 250 (1938), interstate commerce must bear its fair share of the state tax burden. The Court repeatedly has sustained taxes that are applied to activity with a substantial nexus with the State, that are fairly apportioned, that do not discriminate against interstate commerce, and that are fairly related to the services provided by the State. E. g., General Motors Corp. v. Washington, 377 U. S. 436 (1964); Northwestern Cement Co. v. Minnesota, 358 U. S. 450 (1959); Memphis Gas Co. v. Stone, 335 U. S. 80 (1948); Wisconsin v. J. C. Penney Co., 311 U. S. 435 (1940); see Complete Auto Transit, Inc. v. Brady, 430 U. S., at 279, and n. 8.

Respondents proved no facts in the Superior Court that, under the above test, would justify invalidation of the Washington tax. The record contains nothing that minimizes the obvious nexus between Washington and respondents; indeed, respondents conduct their entire stevedoring operations within the State. Nor have respondents successfully attacked the apportionment of the Washington system. The tax under challenge was levied solely on the value of the loading and unloading that occurred in Washington. Although the rate of taxation varies with the type of business activity, respondents have not demonstrated how the 1% rate, which applies to them and generally to businesses rendering services, discriminates against interstate commerce. Finally, nothing in the *751 record suggests that the tax is not fairly related to services and protection provided by the State. In short, because respondents relied below on the per se approach of Puget Sound and Carter & Weekes, they developed no factual basis on which to declare the Washington tax unconstitutional as applied to their members and their stevedoring activities.

III

The Import-Export Clause

Having decided that the Commerce Clause does not per se invalidate the application of the Washington tax to stevedoring, we must face the question whether the tax contravenes the Import-Export Clause. Although the parties dispute the meaning of the prohibition of "Imposts or Duties on Imports or Exports," they agree that it differs from the ban the Commerce Clause erects against burdens and taxation on interstate commerce. Brief for Petitioner 32-33; Brief for Respondents 9-10; Tr. of Oral Arg. 13, 22. The Court has noted before that the Import-Export Clause states an absolute ban, whereas the Commerce Clause merely grants power to Congress. Richfield Oil Corp. v. State Board, 329 U. S. 69, 75 (1946). On the other hand, the Commerce Clause touches all state taxation and regulation of interstate and foreign commerce, whereas the Import-Export Clause bans only "Imposts or Duties on Imports or Exports." Michelin Tire Corp. v. Wages, 423 U. S. 276, 279, 290-294 (1976). The resolution of the Commerce Clause issue, therefore, does not dispose of the Import-Export Clause question.

A

In Michelin the Court upheld the application of a general ad valorem property tax to imported tires and tubes. The Court surveyed the history and purposes of the Import-Export Clause to determine, for the first time, which taxes fell within the absolute ban on "Imposts or Duties." Id., at 283-286. *752 Previous cases had assumed that all taxes on imports and exports and on the importing and exporting processes were banned by the Clause. See, e. g., Department of Revenue v. James B. Beam Distilling Co., 377 U. S. 341, 343 (1964); Richfield Oil Corp. v. State Board, 329 U. S., at 76; Joseph v. Carter & Weekes Stevedoring Co., 330 U. S., at 445 (Douglas, J., dissenting in part); Anglo-Chilean Corp. v. Alabama, 288 U. S. 218, 226-227 (1933); License Cases, 5 How. 504, 575-576 (1847) (opinion of Taney, C. J.). Before Michelin, the primary consideration was whether the tax under review reached imports or exports. With respect to imports, the analysis applied the original-package doctrine of Brown v. Maryland, 12 Wheat. 419 (1827); see, e. g., Department of Revenue v. James B. Beam Distilling Co.; Anglo-Chilean Corp. v. Alabama; Low v. Austin, 13 Wall. 29 (1872), overruled in Michelin Tire Corp. v. Wages. So long as the goods retained their status as imports by remaining in their import packages, they enjoyed immunity from state taxation. With respect to exports, the dispositive question was whether the goods had entered the "export stream," the final, continuous journey out of the country. Kosydar v. National Cash Register Co., 417 U. S. 62, 70-71 (1974); Empresa Siderurgica v. County of Merced, 337 U. S. 154, 157 (1949); A. G. Spalding & Bros. v. Edwards, 262 U. S. 66, 69 (1923); Coe v. Errol, 116 U. S. 517, 526, 527 (1886). As soon as the journey began, tax immunity attached.

Michelin initiated a different approach to Import-Export Clause cases. It ignored the simple question whether the tires and tubes were imports. Instead, it analyzed the nature of the tax to determine whether it was an "Impost or Duty." 423 U. S., at 279, 290-294. Specifically, the analysis examined whether the exaction offended any of the three policy considerations leading to the presence of the Clause:

"The Framers of the Constitution thus sought to alleviate three main concerns . . . : the Federal Government *753 must speak with one voice when regulating commercial relations with foreign governments, and tariffs, which might affect foreign relations, could not be implemented by the States consistently with that exclusive power; import revenues were to be the major source of revenue of the Federal Government and should not be diverted to the States; and harmony among the States might be disturbed unless seaboard States, with their crucial ports of entry, were prohibited from levying taxes on citizens of other States by taxing goods merely flowing through their ports to the other States not situated as favorably geographically." Id., at 285-286 (footnotes omitted).

The ad valorem property tax there at issue offended none of these policies. It did not usurp the Federal Government's authority to regulate foreign relations since it did not "fall on imports as such because of their place of origin." Id., at 286. As a general tax applicable to all property in the State, it could not have been used to create special protective tariffs and could not have been applied selectively to encourage or discourage importation in a manner inconsistent with federal policy. Further, the tax deprived the Federal Government of no revenues to which it was entitled. The exaction merely paid for services, such as fire and police protection, supplied by the local government. Although the tax would increase the cost of the imports to consumers, its effect on the demand for Michelin tubes and tires was insubstantial. The tax, therefore, would not significantly diminish the number of imports on which the Federal Government could levy import duties and would not deprive it of income indirectly. Finally, the tax would not disturb harmony among the States because the coastal jurisdictions would receive compensation only for services and protection extended to the imports. Although intending to prevent coastal States from abusing their geographical positions, the Framers also did not expect residents *754 of the ports to subsidize commerce headed inland. The Court therefore concluded that the Georgia ad valorem property tax was not an "Impost or Duty," within the meaning of the Import-Export Clause, because it offended none of the policies behind that Clause.

A similar approach demonstrates that the application of the Washington business and occupation tax to stevedoring threatens no Import-Export Clause policy. First, the tax does not restrain the ability of the Federal Government to conduct foreign policy. As a general business tax that applies to virtually all businesses in the State, it has not created any special protective tariff. The assessments in this case are only upon business conducted entirely within Washington. No foreign business or vessel is taxed. Respondents, therefore, have demonstrated no impediment posed by the tax upon the regulation of foreign trade by the United States.

Second, the effect of the Washington tax on federal import revenues is identical to the effect in Michelin. The tax merely compensates the State for services and protection extended by Washington to the stevedoring business. Any indirect effect on the demand for imported goods because of the tax on the value of loading and unloading them from their ships is even less substantial than the effect of the direct ad valorem property tax on the imported goods themselves.

Third, the desire to prevent interstate rivalry and friction does not vary significantly from the primary purpose of the Commerce Clause. See P. Hartman, State Taxation of Interstate Commerce 2-3 (1953).^[19] The third Import-Export Clause policy, therefore, is vindicated if the tax falls upon a *755 taxpayer with reasonable nexus to the State, is properly apportioned, does not discriminate, and relates reasonably to services provided by the State. As has been explained in Part II-C, supra, the record in this case, as presently developed, reveals the presence of all these factors.

Under the analysis of Michelin, then, the application of the Washington business and occupation tax to stevedoring violates no Import-Export Clause policy and therefore should not qualify as an "Impost or Duty" subject to the absolute ban of the Clause.

B

The Court in Michelin qualified its holding with the observation that Georgia had applied the property tax to goods "no longer in transit." 423 U. S., at 302.^[20] Because the goods were no longer in transit, however, the Court did not have to face the question whether a tax relating to goods in transit would be an "Impost or Duty" even if it offended none of the policies behind the Clause. Inasmuch as we now face this inquiry, we note two distinctions between this case and Michelin. First, the activity taxed here occurs while imports and exports are in transit. Second, however, the tax does not fall on the goods themselves. The levy reaches only the business of loading and unloading ships or, in other words, the business of transporting cargo within the State of Washington. Despite the existence of the first distinction, the presence of the second leads to the conclusion that the Washington tax is not a prohibited "Impost or Duty" when it violates none of the policies.

In Canton R. Co. v. Rogan, 340 U. S. 511 (1951), the Court upheld a gross-receipts tax on a steam railroad operating *756 exclusively within the Port of Baltimore. The railroad operated a marine terminal and owned rail lines connecting the docks to the trunk lines of major railroads. It switched and pulled cars, stored imports and exports pending transport, supplied wharfage, weighed imports and exports, and rented a stevedoring crane. Somewhat less than half of the company's 1946 gross receipts were derived from the transport of imports or exports. The company contended that this income was immune, under the Import-Export Clause, from the state tax. The Court rejected that argument primarily on the ground that immunity of services incidental to importing and exporting was not so broad as the immunity of the goods themselves:^[21]

"The difference is that in the present case the tax is not on the goods but on the handling of them at the port. An article may be an export and immune from a tax long before or long after it reaches the port. But when the tax is on activities connected with the export or import the range of immunity cannot be so wide.

*757 ". . . The broader definition which appellant tenders distorts the ordinary meaning of the terms. It would lead back to every forest, mine, and factory in the land and create a zone of tax immunity never before imagined." Id., at 514-515 (emphasis in original).

In Canton R. Co. the Court did not have to reach the question about taxation of stevedoring because the company did not load or unload ships.^[22] As implied in the opinion, however, id., at 515, the only distinction between stevedoring and the railroad services was that the loading and unloading of ships crossed the waterline. This is a distinction without economic significance in the present context. The transportation services in both settings are necessary to the import-export process. Taxation in neither setting relates to the value of the goods, and therefore in neither can it be considered taxation upon the goods themselves. The force of Canton R. Co. therefore prompts the conclusion that the Michelin policy analysis should not be discarded merely because the goods are in transit, at least where the taxation falls upon a service distinct from the goods and their value.^[23]

C

Another factual distinction between this case and Michelin is that here the stevedores load and unload imports and exports *758 whereas in Michelin the Georgia tax touched only imports. As noted in Part III-A, supra, the analysis in the export cases has differed from that in the import cases. In the former, the question was when did the export enter the export stream; in the latter, the question was when did the goods escape their original package. The questions differed, for example, because an export could enter its export package and not secure tax immunity until later when it began its journey out of the country. Until Michelin, an import retained its immunity so long as it remained in its original package.

Despite these formal differences, the Michelin approach should apply to taxation involving exports as well as imports. The prohibition on the taxation of exports is contained in the same Clause as that regarding imports. The export-tax ban vindicates two of the three policies identified in Michelin. It precludes state disruption of the United States foreign policy.^[24] It does not serve to protect federal revenues, however, because the Constitution forbids federal taxation of exports. U. S. Const., Art. I, § 9, cl. 5;^[25] see United States v. Hvoslef, 237 U. S. 1 (1915). But it does avoid friction and trade barriers among the States. As a result, any tax relating to exports can be tested for its conformance with the first and third policies. If the constitutional interests are not disturbed, the tax should not be considered an "Impost or Duty" any more than should a tax related to imports. This approach is consistent with Canton R. Co., which permitted taxation of income from services connected to both imports and exports. The respondents' gross receipts from loading exports, therefore, are as subject to the Washington business and occupation tax as are the receipts from unloading imports.

*759 D

None of respondents' additional arguments convinces us that the Michelin approach should not be applied in this case to sustain the tax.

First, respondents contend that the Import-Export Clause effects an absolute prohibition on all taxation of imports and exports. The ban must be absolute, they argue, in order to give the Clause meaning apart from the Commerce Clause. They support this contention primarily with dicta from Richfield Oil,