Court Case: Oklahoma Tax Commission v. Jefferson Lines

Question 1

What three parties were involved in this case?

Answer 1

1. Oklahoma Tax Commission
2. Jefferson Lines, Inc. (MN bus ticket company)
3. US Supreme Court

Question 2

What year did the case take place?

Answer 2

1995

Question 3

What were the facts of the case?

Answer 3

• JL provided bus services in and out of OK
• JL did not collect sales tax on tickets sold in OK for interstate bus trips
• JL said the tax violated the commerce clause bc it was not fairly apportioned. They said that the tax was based on the full price of the ticket rather than just the part that’s attributable to OK.

Question 4

What was the decision of the case?

Answer 4

The tax was approved since it met all 4 prongs and the Supreme Court said that since the tax was on the purchase of the ticket based off where it was bought, it was both internally and externally consistent.

Question 5

Which tax concepts were at the forefront of the case?

Answer 5

Commerce Clause and Apportionment

Question 6

What was the significance of the case?

Answer 6

It showed that apportionment doesn’t always mean divide and that apportionment isn’t required if the transaction was for a discrete event within one state.