Court Case: Associated Industries of Missouri v. Lohman

Question 1

What were the parties involved in the case?

Answer 1

• Trade association of businesses
• Lohman (Missouri DOR)
• US Supreme Court

Question 2

What year did the case take place in?

Answer 2

1994

Question 3

What were the facts of the case?

Answer 3

• MO imposed a 1.5% use tax on all OOS sellers to “compensate” for the taxes imposed by local jurisdictions within the state on in-state sales of goods
• However, the local sales tax rates varied widely, and in many jurisdictions the use tax exceeded the sales tax, which caused the tax to discriminate against OOS sellers

Question 4

What was the ruling on the case?

Answer 4

• Supreme Court said that the tax violated the commerce clause bc it discriminated against interstate commerce, the tax was not externally consistent, and use tax cannot exceed sales tax under the compensatory tax doctrine

Question 5

What was the significance of the case?

Answer 5

Showed that discrimination against interstate commerce can be attributable to a specific jurisdiction, not the entire state as a whole

Question 6

Which tax concepts were at the forefront of the case?

Answer 6

• Commerce Clause
• Compensatory Tax Doctrine