No. 82-585
Argued: October 4, 1983Decided: November 1, 1983
Held:
Section 7(a) pre-empts the Hawaii statute. Pp. 11-15.
- (a) When a federal statute unambiguously forbids a State to impose a particular kind of tax on an industry affecting interstate commerce, as 7(a) does here by its plain language, courts need not look beyond the federal statute’s plain language to determine whether a state statute that imposes such a tax is pre-empted. P. 12.
- (b) Moreover, nothing in the ADAA’s legislative history suggests that Congress intended to limit 7(a)’s pre-emptive effect to taxes on airline passengers or to save gross receipts taxes such as the one Hawaii imposes. Although 7(a) was enacted to deal primarily with local head taxes on airline passengers, the legislative history contains many references to the fact that 7(a) pre-empts state taxes on gross receipts of airlines. Pp. 12-13.
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- (c) The fact that the Hawaii tax is styled as a property tax measured by gross receipts rather than as a straightforward gross receipts tax does not entitle the tax to escape pre-emption under 7(a)’s property tax exemption. Such styling of the tax does not mask the fact that the purpose and effect of the tax are to impose a levy upon the gross receipts
- of airlines, thus making it at least an “indirect” tax on such receipts. Pp. 13-14.
65 Haw. 1, 647 P.2d 263, reversed and remanded.
MARSHALL, J., delivered the opinion for a unanimous Court.
[ Footnote * ] Together with No. 82-586, Hawaiian Airlines, Inc. v. Director of Taxation of Hawaii, also on appeal from the same court.
Richard L. Griffith argued the cause for appellants in both cases. With him on the briefs were Michael A. Shea, Richard R. Clifton, Hugh Shearer, and H. Mitchell D’Olier.
William D. Dexter argued the cause for appellee. With him on the brief was Kevin T. Wakayama.Fn
Fn [464 U.S. 7, 8] Briefs of amici curiae urging affirmance were filed for the State of Alaska et al. by Kenneth O. Eikenberry, Attorney General of Washington, and Jeffrey D. Goltz, Assistant Attorney General, Norman C. Gorsuch, Attorney General of Alaska, and Diane T. Colvin, Assistant Attorney General, Robert K. Corbin, Attorney General of Arizona, Michael C. Turpen, Attorney General of Oklahoma, Chauncey H. Browning, Attorney General of West Virginia, and Jack C. McClung, Deputy Attorney General; and for the Multistate Tax Commission et al. by Eugene F. Corrigan.
Briefs of amici curiae were filed for the State of New York by Robert Abrams, Attorney General, Peter H. Schiff, and Francis V. Dow, Assistant Attorney General; and for the Air Transport Association of America by Andrew C. Hartzell, Jr.
JUSTICE MARSHALL delivered the opinion of the Court.
These appeals present the question whether 49 U.S.C. 1513(a) pre-empts a Hawaii statute that imposes a tax on the gross income of airlines operating within the State. We conclude that the Hawaii tax is pre-empted.
I
In 1970, Congress committed the Federal Government to assisting States and localities in expanding and improving the Nation’s air transportation system. See Airport and Airway Development Act of 1970, Pub. L. 91-258, 84 Stat. 219. In the same session, Congress established the Airport and Airway Trust Fund to funnel federal resources to local airport expansion and improvement projects. See Airport and Airway [464 U.S. 7, 9] Revenue Act of 1970, Pub. L. 91-258, 208, 84 Stat. 250. As originally devised, the Trust Fund received its revenues from several federal aviation taxes, including an 8% tax on domestic airline tickets, a $3 head tax on international flights out of the United States, and a 5% tax on air freight. See 203, 204, 84 Stat. 238, 240 (codified, as amended, at 26 U.S.C. 4261, 4271 (1976 ed. and Supp. V)). See generally Massachusetts v. United States, 435 U.S. 444 (1978).
Once the Airport and Airway Development Act was passed and the Trust Fund established, the question arose whether States and municipalities were still free to impose additional taxes on airlines and air travelers. In Evansville-Vanderburgh Airport Authority Dist. v. Delta Airlines, Inc., 405 U.S. 707 (1972), this Court ruled that neither the Commerce Clause nor the Airport and Airway Development Act precluded state or local authorities from assessing head taxes on passengers boarding flights at state or local airports. In particular the Court noted: “No federal statute or specific congressional action or declaration evidences a congressional purpose to deny or pre-empt state and local power to levy charges designed to help defray the costs of airport construction and maintenance.” Id., at 721.
Following the Evansville-Vanderburgh Airport decision, Committees in both Houses of Congress held hearings on local taxation of air transportation. 1 Both Committees concluded that the proliferation of local taxes burdened interstate air transportation, and, when coupled with the federal Trust Fund levies, imposed double taxation on air travelers. 2 To deal with these problems, Congress passed 7(a) of the [464 U.S. 7, 10] Airport Development Acceleration Act of 1973 (ADAA), the provision at issue in these appeals. See Pub. L. 93-44, 7(a), 87 Stat. 90. That section, which is currently codified at 49 U.S.C. 1513, 3 reads:
- “(a) No State . . . shall levy or collect a tax, fee, head charge, or other charge, directly or indirectly, on persons traveling in air commerce or on the carriage of persons traveling in air commerce or on the sale of air transportation or on the gross receipts derived therefrom. . . .
- “(b) Nothing in this section shall prohibit a State . . . from the levy or collection of taxes other than those enumerated in subsection (a) of this section, including property taxes, net income taxes, franchise taxes, and sales or use taxes on the sale of goods or services. . . .”
For States with taxes that were in effect prior to May 21, 1970, and would be pre-empted by 1513(a), Congress postponed the effective date of the section until December 31, 1973. Ibid.
II
Appellants Aloha Airlines, Inc., and Hawaiian Airlines, Inc., are both commercial airlines that carry passengers, freight, and mail among the islands of Hawaii. Throughout the periods relevant to these appeals, appellants have been Hawaii public service companies, see Haw. Rev. Stat. 239-2, 269-1 (1976 and Supp. 1982), and subject to the State’s public service company tax, which provides:
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- “There shall be levied and assessed upon each airline a tax of four per cent of its gross income each year from the airline business . . . . The tax imposed by this section is a means of taxing the personal property of the airline or other carrier, tangible and intangible, including
- going concern value, and is in lieu of the [general excise] tax imposed by chapter 237 but is not in lieu of any other tax.” 239-6 (1976).
In 1978, appellant Aloha Airlines sought refunds for taxes assessed under this provision for the carriage of passengers between 1974 and 1977 on the ground that 49 U.S.C. 1513(a) had pre-empted Haw. Rev. Stat. 239-6 as of December 31, 1973. In 1979, appellant Hawaiian Airlines filed a similar action seeking a refund for taxes paid between 1974 and 1978. In separate decisions, the Tax Appeal Court of the State of Hawaii rejected appellants’ pre-emption arguments, In re Aloha Airlines, Inc., No. 1772 (June 9, 1978); In re Hawaiian Airlines, Inc., Nos. 1853, 1868 (Jan. 4, 1980). On consolidated appeal, the Hawaii Supreme Court affirmed, one justice dissenting, In re Aloha Airlines, Inc., 65 Haw. 1, 647 P.2d 263 (1982). Appellants then filed timely notices of appeal, this Court noted probable jurisdiction, 459 U.S. 1101 (1983), and we now reverse.
III
The plain language of 49 U.S.C. 1513(a) would appear to invalidate Haw. Rev. Stat. 239-6. Section 1513(a) expressly pre-empts gross receipts taxes on the sale of air transportation or the carriage of persons traveling in air commerce, and Haw. Rev. Stat. 239-6 is a state tax on the gross receipts 4 of airlines selling air transportation and carrying persons traveling in air commerce. The Hawaii Supreme Court sought to avoid this direct conflict by looking beyond the language of 1513(a) to Congress’ purpose in enacting the statute. The court concluded that Congress passed the ADAA to deal with the proliferation of local and state head taxes on airline passengers in the early 1970’s. Since Haw. Rev. Stat. 239-6 is imposed upon air carriers [464 U.S. 7, 12] as opposed to air travelers, the Hawaii court reasoned that the provision did not come within the ambit of 1513(a)’s prohibitions.
We cannot agree with the Hawaii Supreme Court’s analysis. First, when a federal statute unambiguously forbids the States to impose a particular kind of tax on an industry affecting interstate commerce, courts need not look beyond the plain language of the federal statute to determine whether a state statute that imposes such a tax is pre-empted. 5 Thus, the Hawaii Supreme Court erred in failing to give effect to the plain meaning of 1513(a). 6
Second, even if the absence of an express proscription made it necessary to go beyond the plain language of 1513(a), [464 U.S. 7, 13] nothing in the legislative history of the ADAA suggests that Congress intended to limit 1513(a)’s pre-emptive effect to taxes on airline passengers or to save gross receipts taxes like 239-6. 7 Although Congress passed 1513(a) to deal primarily with local head taxes on airline passengers, the legislative history abounds with references to the fact that 1513(a) also pre-empts state taxes on the gross receipts of airlines. 8 For example, Senator Cannon, one of the ADAA’s sponsors, clearly stated in floor debate: “The bill prohibits the levying of State or local head taxes, fees, gross receipts taxes or other such charges either on passengers or on the carriage of such passengers in interstate commerce.” 119 Cong. Rec. 3349 (1973).
Finally, we are unpersuaded by appellee’s contention that, because the Hawaii Legislature styled 239-6 as a property tax measured by gross receipts rather than a straightforward gross receipts tax, the provision should escape preemption under 1513(b)’s exemption for property taxes. The manner in which the state legislature has described and categorized 239-6 9 cannot mask the fact that the purpose [464 U.S. 7, 14] and effect of the provision are to impose a levy upon the gross receipts of airlines. Section 1513(a) expressly prohibits States from taxing “directly or indirectly” gross receipts derived from air transportation. Beyond question, a property tax that is measured by gross receipts constitutes at least an “indirect” tax on the gross receipts of airlines. A state statute that imposes such a tax is therefore pre-empted. 10
IV
In conclusion, we join with state courts of Alaska and New York 11 in the view that 1513(a) proscribes the imposition of [464 U.S. 7, 15] state and local taxes on gross receipts derived from air transportation or the carriage of persons in air commerce. The judgment of the Supreme Court of the State of Hawaii is reversed, and the cases are remanded for further proceedings not inconsistent with this opinion.
