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Wednesday, January 19, 2005
On this day:

6th Circ.: No En Banc Review of Finding that Ohio Tax Credits Violate "Negative" Commerce Clause

A tax case and a so-called "negative" commerce clause case all rolled into one! What could be more exciting?

The WSJ summarizes what has happened so far:

To keep DaimlerChrysler from shutting a Toledo factory in 1998, the city and state offered the auto maker a $280 million tax break in exchange for a $1.2 billion plan to expand the complex.

As part of the deal, Ohio gave DaimlerChrysler a tax credit equal to 13.5% of the company's spending on certain qualified investments, including machinery.

A group spearheaded by consumer advocate Ralph Nader filed a lawsuit attacking the package as "corporate welfare." Plaintiffs included 12 Toledo residents and three businesses -- a fraction of the total displaced by the plant expansion.

Mr. Nader's forces lost in the lower court. But in September, a three-judge panel of the appeals court ruled that the tax credit "discriminates against interstate commerce by coercing businesses already subject to the Ohio franchise tax to expand locally rather than out-of-state."

By the way, where is that so-called "negative" commerce clause anyway? I'm having trouble finding it in my copy of the Constitution.