Question

N complete auto transit, the supreme court provided criteria for whether a state can tax an out-of-state business. which of the following are those criteria? (check all that apply.)

multiple select question.
O a state may tax only a fair portion of the income.a tax can not discriminate against out-of-state businesses.
O a sufficient connection between the business and the state must exist
O the taxes must be fairly related to services provided.
O a tax must be consistent with all other states taxes in which the business operates.

Answer 1

The Supreme Court in Complete Auto Transit provided a four-part test for the validity of state taxation on interstate businesses: taxing only a fair portion of income, no discrimination against out-of-state businesses, a sufficient connection with the state, and taxes fairly related to services provided by the state.

Step-by-step explanation:

In Complete Auto Transit, the Supreme Court established a four-part test to determine the constitutionality of state taxes on interstate businesses. According to this test, a state tax is valid if it meets the following criteria:

• A state may tax only a fair portion of the income.
• A tax cannot discriminate against out-of-state businesses.
• A sufficient connection between the business and the state must exist.
• The taxes must be fairly related to services provided by the state.

Moreover, the Constitution provides guidance on interstate commerce and taxation. States cannot impose taxes or tariffs on imports from other states, ensuring that internal trade remains fluid and unencumbered by state-level protectionist policies. The power to regulate interstate trade remains with the national government, while the states retain certain taxation powers, both independently and concurrently with the federal government.