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You can search the entire site. or go to the recent opinions, or the chronological or subject indices. State of Alaska, Department of Revenue v. North Pacific Fishing, Inc. and U.S. Fishing LLC. (5/7/2021) sp-7524
Notice: This opinion is subject to correction before publication in the P ACIFIC REPORTER.
Readers are requested to bring errors to the attention of the Clerk of the Appellate Courts, 303
K Street, Anchorage, Alaska 99501, phone (907) 264-0608, fax (907) 264-0878, email
corrections@akcourts.us.
THE SUPREME COURT OF THE STATE OF ALASKA
STATE OF ALASKA, DEPARTMENT )
OF REVENUE, ) Supreme Court No. S-17642
)
Appellant, ) Superior Court No. 3AN-18-06908 CI
)
v. ) O P I N I O N
)
NORTH PACIFIC FISHING, INC. and ) No. 7524 - May 7, 2021
U.S. FISHING, LLC, )
)
Appellees. )
)
Appeal from the Superior Court of the State of Alaska, Third
Judicial District, Anchorage, Dani Crosby, Judge.
Appearances: Laura F. Fox, Senior Assistant Attorney
General, Anchorage, and Kevin G. Clarkson, Attorney
General, Juneau, for Appellant. Leon T. Vance, Faulkner
Banfield, P.C., Juneau, and James E. Torgerson, Stoel Rives
LLP, Anchorage, for Appellees.
Before: Bolger, Chief Justice, Winfree, Maassen, and Carney,
Justices. [Borghesan, Justice, not participating.]
BOLGER, Chief Justice.
I. INTRODUCTION
Two commercial fishing companies catch and process fish in the Exclusive
Economic ZoneofftheAlaskacoast but outsideAlaska's territorial waters. Their vessels
arrive at Alaska ports where they may transfer processed fish directly to foreign-bound
----------------------- Page 2-----------------------
cargo vessels or transfer processed fish to shore for storage and later loading on cargo
vessels. Because the companies do not process fish in Alaska, they do not pay the taxes
imposed on other processing vessels operating out of Alaskan ports, but their fisheries
business activities are subject to a state "landing tax." The fishing companies argue that
this landing tax violates the Import-Export and Tonnage Clauses of the United States
Constitution and 33 U.S.C. § 5(b). But we conclude that the tax is imposed before the
fish product enters the stream of export commerce, that the tax does not constitute an
"impost or duty," and that the tax therefore does not violate the Import-Export Clause.
We further conclude that the tax is not imposed against the companies' vessels in
violation of the Tonnage Clause or 33 U.S.C. § 5(b).
II. FACTS AND PROCEEDINGS
A. North Pacific's Operations
North Pacific Fishing, Inc. and U.S. Fishing, LLC (North Pacific) are
Washington companies authorized to do business in Alaska. Both own fishing vessels
1
operating in theExclusiveEconomicZone(EEZ) butoutsideAlaska's territorial waters.
North Pacific's vessels are "catcher/processors," which both harvest and process fish in
the EEZ. They do not fish in Alaska, but arrive in Alaska ports to unload processed fish.
1 The EEZ is a zone contiguous to United States territorial waters that
extends 200 miles from shore and into international waters. Proclamation No. 5030, 48
Fed. Reg. 10,605-06 (Mar. 14, 1983); see also 46 U.S.C. § 107 (2018). Within the EEZ
the United States retains "sovereign rights for the purpose of exploring, exploiting,
conserving and managing natural resources . . . and with regard to other activities for the
economic exploitation and exploration of the zone." Proclamation No. 5030, 48 Fed.
Reg. at 10,605-06. Alaska's territorial waters extend 3 miles from shore, and federal
territorial waters extend 12 miles from shore. 5 Alaska Administrative Code (AAC)
39.975(a)(13) (2019) (defining Alaska territorial waters); 33 C.F.R. § 2.22 (2020)
(defining federal territorial waters); see also 43 U.S.C. § 1312 (2018) (authorizing state
extension of "seaward boundaries" to 3 miles from shore); 33 U.S.C. § 151 (2018)
(authorizing the establishment of demarcation lines up to 12 miles from shore).
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The fish product may be unloaded to warehouses on shore, to shipping containers on the
docks, or directly to cargo ships waiting in port.
North Pacific exports nearly all of its fish product on foreign-flagged vessels,
which are prohibited by law from delivering cargo from one United States domestic port
to another. 2 Sometimes a buyer is identified before processed fish is loaded onto a cargo
vessel; other times the sale is not arranged until the vessel is en route to a foreign port.
During the years at issue, North Pacific caught and processed fish only in the EEZ, and
nearly all of its fish product was eventually transferred to foreign-flagged cargo ships.
The parties agree that North Pacific's nominal shipments of processed fish to Washington
have no impact on the issues raised in this appeal.
B. The Landing Tax
The EEZ catcher/processors like North Pacific do not catch or process fish
in Alaska waters, but their operations place a burden on state resources:
The EEZ catcher/processors have a significant presence in the
state, including transferring of the processed fisheries resource
product, taking on and disembarking of crew, taking on of fuel
and supplies, obtaining repairs, discharging waste, and making
use of sheltered waters. Additional burdens resulting from the
fleet presence impact the state and local communities through
increased demands on educational systems, road maintenance,
public safety, airports, docks, hospitals, and other programs
[ ]
provided or financed by the state or local communities. 3
Because North Pacific catches and processes its fish outside of Alaska waters
it is not subject to the state's "fisheries business tax" on catching or processing fish within
2 See 46 U.S.C. §§ 12102, 12103, 12112 (excluding foreign-flagged ships
from eligibility for coastwise trade endorsement).
3 15 AAC 77.005(b) (2013).
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4
the state. "To compensate the statefor theburdens thatfish catcher/processorsoperating
in the [EEZ] impose[] upon the state and local communities, as well as for the benefits
the EEZ catcher/processors receive," catcher/processors like North Pacific instead pay
5 The landing tax is "substantially equivalent" to the
the "fishery resource landing tax."
taxes imposed on the rest of the fishing industry, and is intended to be "a payment for the
services and benefits conferred" on the EEZ catcher/processors rather than "a fee on
6
fisheries resources simply moving through the state."
The landing tax applies to anyone "engag[ing] in a floating fisheries
business in the state and who owns a fishery resource that is not subject to [the fisheries
7 It
business tax] but that is brought into the jurisdiction of, and first landed in" Alaska.
provides a credit for any taxes paid in another jurisdiction that are "equivalent in nature"
8
to the Alaska tax. The landing tax applies "without regard to the final destination of"
9 And like the fisheries business tax, the landing tax is based on the
the fish product.
value of the raw, unprocessed fish as extrapolated from the value of the processed fish
4 AS 43.75.100 (imposing tax on businesses that take fish within Alaska for
sale out of state); AS 43.75.015 (imposing tax on businesses that process fish within
Alaska).
5 AS 43.77.010.
6 15 AAC 77.005(c).
7 AS 43.77.010. "Landing" is defined as "unloading or transferring a fishery
resource," also known as "transloading." AS 43.77.200(4).
8
AS 43.77.030; 15 AAC 77.035(a); see AS 43.77.010; 15 AAC 77.030(c).
9
15 AAC 77.030(f).
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10
product the catcher/processors land. The landing tax is thus "designed and intended
to be a compensatory tax to complement the fisheries business tax." 11
C. Legal Proceedings
In 2016 North Pacific informed the Alaska Department of Revenue (the
Department) that it considered the landing tax unconstitutional as applied to its activities.
North Pacific claimed the tax violated the Import-Export and Tonnage Clauses of the
12
United States Constitution and requested a refund of taxes paid in previous years. The
Department's Tax Division issued an informal decision denying all of North Pacific's
claims.
North Pacific then appealed to the Office of Administrative Hearings
(OAH), which affirmed the Tax Division's decision. North Pacific reiterated its
13
constitutional arguments and additionally claimed a violation of 33 U.S.C. § 5(b). It
argued that the landing tax, as a direct tax on goods in export transit, violated the Import-
Export Clause and was barred by the holding in Richfield Oil Corp. v. State Board of
14
Equalization. The Department responded that the more recent decision in Michelin
15
Tire Corp. v. Wages established the correct test, under which the landing tax was
10 See AS 43.77.010, 43.75.015(c), 43.75.290(7); 15 AAC 77.040.
11 15 AAC 77.005(a).
12 U.S. Const. art. I, § 10, cl. 2 (Import-Export Clause), cl. 3 (Tonnage
Clause).
13 33 U.S.C. § 5(b) largely codifies Tonnage and Commerce Clauses common
law. See U.S. Const. art. I, § 10, cl. 3; 148 CONG. REC. E2143-04 (daily ed. Nov. 22,
2002) (statement of Rep. Don Young).
14 329 U.S. 69 (1946).
15
423 U.S. 276 (1976).
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----------------------- Page 6-----------------------
permissible. OAH declined to say that Richfield had been overruled but found it
inapplicable, reasoning that the landing tax was imposed neither on the fish product nor
during the export process. Applying Michelin OAH found no violation of the Import-
Export Clause.
OAH also rejected North Pacific's claim that the landing tax was based on
its vessels or its use of navigable waters in violation of the Tonnage Clause. Finally,
OAH rejected the 33 U.S.C. § 5(b) challenge as derivative of the other failed arguments.
North Pacific next appealed to the superior court, which concluded that
"Richfield remains good law and is dispositive here." The court reversed OAH as to the
Import-Export Clause, concluding that all of North Pacific's fish product was in the
export stream when the landing tax applied, and that the tax applied directly to the
processed fish. Because the court found the landing tax unconstitutional under the
Import-Export Clause, it did not reach North Pacific's other claims.
The Department appeals, asking us to reverse the superior court and affirm
the OAH on all counts. North Pacific asks us to affirm the superior court's decision or,
alternatively, hold that the tax violates the Tonnage Clause and 33 U.S.C. § 5(b).
III. STANDARD OF REVIEW
"When the superior court acts as an intermediate appellate court, we
undertake an independent review of the agency determination, and we may affirm . . . on
16
any ground supported by the record." We review de novo questions of constitutional
law and statutory construction and will "adopt the rule of law most consistent with
16 Benavides v. State, 151 P.3d 332, 334 (Alaska 2006).
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17
precedent, reason, and policy." "A presumption of constitutionality applies," and we
18
resolve any doubts in favor of a law's constitutionality.
IV. DISCUSSION
A. The Landing Tax Does Not Violate The Import-Export Clause.
The Import-Export Clause dictates, "No [s]tate shall, without the consent
19
of the Congress, lay any imposts or duties on imports or exports." Like the Export and
Commerce Clauses, it is intended to prevent friction between the states and burdens on
20
interstate or foreign commerce. The same analysis therefore often applies to all three
clauses.21
Import-Export cases were traditionally analyzed under the "stream of
export" or "continuous route" doctrine explained in Richfield, which prohibits the states
22
Goods and resources
from directly taxing goods in the stream of export commerce.
17 Se. Alaska Conservation Council, Inc. v. Dep't of Nat. Res. , 470 P.3d 129,
136 (Alaska 2020) (quoting State, Div. of Elections v. Green Party of Alaska , 118 P.3d
1054, 1059 (Alaska 2005)).
18
State, Dep't of Revenue v. Andrade, 23 P.3d 58, 71 (Alaska 2001) (quoting
Baxley v. State, 958 P.2d 422, 428 (Alaska 1998)).
19 U.S. Const. art. I, § 10, cl. 2.
20 Id. § 8, cl. 3 (Commerce Clause); § 9, cl. 5 (Export Clause); see Dep't of
Revenue v. Ass'n of Wash. Stevedoring Cos., 435 U.S. 734, 754-55 (1978) (describing
purpose of Import-Export and Commerce Clauses).
21
See Wash. Stevedoring, 435 U.S. 734 at 754 ("[T]he desire to prevent
interstate rivalry and friction [expressed in the Import-Export Clause] does not vary
significantly fromtheprimarypurposeoftheCommerceClause."); EmpresaSiderurgica
v. Cty. of Merced, 337 U.S. 154, 156 (1949) (applying reasoning fromCommerce Clause
jurisprudence to case under Import-Export Clause).
22
Richfield Oil Co. v. State, Bd. of Equalization, 329 U.S. 69, 85 (1946); see
(continued...)
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23
remain taxable until they are on a continuous route to exportation. The analytical focus
under Richfield is thus on timing: whether definite commitment to the export stream has
transformed the good into a tax-exempt export when the tax is assessed.
The Supreme Court updated its Import-Export jurisprudence in Michelin,
24 The Import-Export Clause addresses
shifting its focus to the purposes of the Clause.
three main concerns: (1) "the Federal Government must speak with one voice when
regulating commercial relations with foreign governments"; (2) "import revenues . . .
should not be diverted to the [s]tates"; and (3) seaboard states must be "prohibited from
levying taxes on citizens of other [s]tates by taxing goods merely flowing through their
ports to the other [s]tates not situated as favorably geographically."25 Under Michelin
only taxes contrary to these purposes are prohibited by the Import-Export Clause.
In Department of Revenue v. Ass'n of Washington Stevedoring Cos. the
Court expressly extended this analysis to export goods, explaining that the first and third
of the Michelin principles were implicated when a state levied a tax on exports, and
recognized that Michelin had "initiated a different approach to Import-Export Clause
cases."26 But the Court declined to extend Michelin 's purpose-driven analysis to taxes
22 (...continued)
also Coe v. Town of Errol, 116 U.S. 517, 527 (1886) (holding logs passing through one
state from another were in continuous export transit and untaxable under Commerce
Clause).
23 Empresa Siderurgica, 337 U.S. at 157 (holding partially dismantled cement
plant, sold to foreign buyer but not yet en route, remained taxable).
24
Michelin Tire Corp. v. Wages, 423 U.S. 276 (1976).
25
Id. at 285-86.
26
435 U.S. at 759 (quoting Kosydar v. Nat'l Cash Register Co., 417 U.S. 62,
(continued...)
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----------------------- Page 9-----------------------
assessed directly on goods while in import or export transit, and it has never expressly
27
overruled the stream of export cases.
The Department argues that Richfield was functionally overruled by
Michelin . It alternatively argues that if Richfield is good law, it does not control here,
as the landing tax is neither imposed directly on the fish product nor assessed while that
product is in the export stream. North Pacific insists that Richfield is dispositive and bars
application of the landing tax to its business activities.
The Supreme Court has repeatedly signaled that Michelin represents the
"modern" Import-Export Clause doctrine,28 and we begin our analysis there. But we do
not assume that Richfield has been wholly abandoned, leaving to the Supreme Court "the
prerogative of overruling its own decisions."29 In any case we need not resolve which
test is appropriate here as we conclude that the landing tax is permissible under both.
26 (...continued)
70-71 (1974)); see also Itel Containers Int'l Corp. v. Huddleston, 507 U.S. 60, 77 (1993)
(describing Michelin as the "modern Import-Export Clause test"); Limbach v. Hooven
& Allison Co., 466 U.S. 353, 359-60 (1984) (noting Michelin "adopted a fundamentally
different approach" and "specifically abandoned" the broader prohibition on all import
taxation); State, Dep't of Revenue v. Alaska Pulp Am., Inc., 674 P.2d 268, 279 (Alaska
1983) (identifying Michelin as proper test for Import-Export Clause cases).
27
Wash. Stevedoring, 435 U.S. at 757 n.23 ("We do not reach the question
of the applicability of the Michelin approach when a [s]tate directly taxes imports or
exports in transit."); United States v. Int'l Bus. Machs. Corp., 517 U.S. 843, 862 (1996)
(stating that Richfield had been distinguished but not overruled).
28
Itel Containers Int'l Corp., 507 U.S. at 77; see also Wash. Stevedoring, 435
U.S. at 759; Kosydar, 417 U.S. at 70-71.
29
Rodriguez de Quijas v. Shearson/Am. Express, Inc., 490 U.S. 477, 484
(1989).
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1. The landing tax does not conflict with the purposes of the
Import-Export Clause.
To determine whether the landing tax conflicts with the purpose of the
Import-Export Clause, we apply the relevant standards described in Michelin and
Washington Stevedoring : (1) a tax may not interfere with the federal government's
ability to speak with one voice on foreign trade; and (2) coastal states may not disturb
interstate harmony by "levying taxes on citizens of other [s]tates by taxing goods merely
30
flowing through their ports."
If these "constitutional interests are not disturbed, the tax
31
should not be considered an '[i]mpost or [d]uty.' "
The landing tax does not "prevent[] the Federal Government from
'speaking with one voice when regulating commercial relations with foreign
32
governments.' " It creates no special tariffs and "cannot be applied selectively to
33 The tax may have an incidental effect on fish
encourage or discourage" exportation.
prices and subsequently on the export market, but the same is true of much domestic
30 Wash. Stevedoring , 435 U.S.at 735 (quoting Michelin, 423 U.S. at 285-86).
A third policy identified in Michelin - preventing the diversion of import revenue to the
states - does not apply here because the federal government may not tax exports and
therefore has no potential tax revenue to divert. U.S. Const. art. I, § 9, cl. 5. In any case,
the federal government does not tax North Pacific's fish product or the operation of a
floating fisheries business; if it did, a tax credit would apply. See 50 C.F.R.
§§ 679.90-95, 679.80-85 (establishing federal fishing programs but not imposing federal
tax); AS 43.77.030 (establishing credits for taxes paid in other jurisdictions).
31
Wash. Stevedoring, 435 U.S. at 758.
32
Itel Containers Int'l Corp., 507 U.S. at 72 (quoting Japan Line, Ltd. v. Los
Angeles Cty. , 441 U.S. 434, 451 (1979)); see also id. at 77 ("[T]he one voice component
of the Michelin test is the same as the one voice component of our Japan Line test.").
33
See Michelin, 423 U.S. at 286 (focusing on general application of tax,
regardless of import status).
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taxation. Prevention of these sorts of incidental effects was "not even remotely an
objective of the Framers." 34
Nor does the landing tax disturb interstate harmony or "tax goods merely
35 A tax will not run afoul of this proscription if it has
flowing through [Alaska's] ports."
"a reasonable nexus to the state, is properly apportioned, does not discriminate, and
relates reasonably to the services provided by the state."36 The landing tax satisfies these
requirements.
First, the tax has a reasonable nexus to Alaska: North Pacific conducts its
relevant commercial activities within the state, "including transfer of fishery resources
or processed products, taking on and disembarking crew, taking on fuel or supplies,
obtaining vessel or gear repairs, discharging wastes, seeking protection in sheltered
waters, and any other related activity that makes a claim on the resources of the state."37
Second,thelandingtaxisnotunfairlyapportioned or discriminatory against
interstate or foreign commerce. It falls on activities occurring within Alaska; no activity
occurring in any other state is implicated. The tax was specifically designed to achieve
"equality of treatment between local and interstate commerce."38 The state treats fish
product intended for export no differently than fish product sold for local consumption,
34 Id. at 287.
35 Wash. Stevedoring, 435 U.S. at 735 (quoting Michelin, 423 U.S. at 285-86).
36 Id. at 754-55 (explaining that this purpose "does not vary significantly from
the primary purpose of the Commerce Clause").
37
AS 43.77.200(2); see also AS 43.77.010; 15 AAC 77.005.
38
15 AAC 77.005(c).
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and the landing tax imposes an equal or lower rate than the fisheries business tax
imposed on wholly in-state floating fisheries businesses. 39
Finally, the landing tax is "fairly related to the services provided by the
40 The state has rationally concluded that businesses such as North Pacific
[s]tate."
benefit from state services including road maintenance, public safety, public health
infrastructure, medical facilities, and educational systems.41 The state has further
concluded that these businesses' activities burden state resources.42 The landing tax is
assessed to pay for these benefits and burdens. It is a measure "by which a [s]tate
apportions the cost of such services as police and fire protection among the
beneficiaries."43 There is no reason a floatingfisheries businesslikeNorth Pacificshould
not bear its fair share of those costs.44
39 Compare AS 43.75.015 (three to five percent tax on fish processed by
floating fisheries business under fisheries business tax), with AS 43.77.010 (one to three
percent tax on fish processed by floating fisheries business under landing tax).
40 Wash. Stevedoring, 435 U.S. at 750.
41 See 15 AAC 77.005.
42 See id.
43 Michelin Tire Corp. v. Wages, 423 U.S. 276, 287 (1976); see also Joy Oil
Co. v. State Tax Comm'n of Mich ., 337 U.S. 286, 288 (1949) (explaining that Import-
Export Clause is not meant "to relieve property eventually to be exported from its share
of the cost of local services").
44
See Michelin, 423 U.S. at 287 ("[T]here is no reason why an importer
should not bear his share of these costs along with his competitors handling only
domestic goods. The Import-Export Clause . . . cannot be read to accord imported goods
preferential treatment that permits escape from uniform taxes imposed . . . for services
which the [s]tate supplies.").
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----------------------- Page 13-----------------------
The landing tax does not violate the purposes of the Import-Export Clause
and therefore satisfies the Michelin standard. North Pacific does not contest this point.
Instead, it argues that Michelin is inapplicable and that Richfield controls.
2. The landing tax is not assessed on goods in export transit.
Under the stream of export commerce doctrine explained in Richfield, the
Import-Export Clause bars states from assessing taxes directly on goods after they enter
45
the stream of export commerce.
In Richfield the Supreme Court held that imposing a
46 The oil was
state sales tax on oil sold for export violated the Import-Export Clause.
transported overland by the seller and stored on the dock in tanks owned by the seller.47
It was then pumped to a foreign-flagged tanker, completing the sale and triggering the
tax, which the state characterized as being levied on merchants "for the privilege of
selling tangible personal property at retail."48 The Court determined that the tax was
assessed directly on the oil and that its arrival in the hold of the tanker unequivocally
committed it to export.49 Because the oil's delivery to the tanker also completed the sale
and triggered the tax, the sales tax violated the Import-Export Clause.50
Under the Richfield line of cases, direct taxes on goods in export transit are
unconstitutional regardless of whether they conflict with the clause's purpose. To
determine whether the landing tax is permissible under Richfield, we therefore must
45 See Richfield Oil Corp. v. State Bd. of Equalization, 329 U.S. 69, 84 (1946).
46 Id. at 83, 85-86.
47
Id . at 82-83.
48 Id. at 83.
49 Id. at 84.
50 Id. at 85.
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decide two issues: (1) Is the landing tax assessed directly on the fish product, or on a
separate business activity? (2) Has the fish product entered the stream of export
commerce when it is taxed? We conclude that while the tax is assessed on the fish
product, this occurs before it enters the stream of export. The landing tax is therefore
permissible under Richfield.
a. The tax is assessed on the fish product.
Not all taxes applied during the export process fall directly on the export
goods, and taxes levied on distinct business activities rather than on the goods
51
themselves are too indirect to violate the Import-Export Clause.
The Department
argues that the landing tax is not assessed on the fish product, but on the commercial
activity of operating a floating fisheries business. But the Department's characterization
of the tax is not dispositive, and we conclude that the landing tax is imposed directly on
52
the processed fish rather than on an associated activity.
This issue "turns not on the characterization which the state has given the
53
Taxes that are on the sale of goods or measured
tax, but on its operation and effect."
54
by their retail value are effectively taxes on those goods. On the other hand, taxes on
services and business activities associated with the export process are not, and thus fall
51 See Dep't of Revenue v. Ass'n of Wash. Stevedoring Cos. , 435 U.S. 734,
761 (1978) (upholding tax because it "does not fall on the goods themselves").
52 See Richfield, 329 U.S. at 83-84; see also Dulles Duty Free, LLC v. Cty. of
Loudoun, 803 S.E.2d 54, 62 (Va. 2017) (holding that tax imposed on gross receipts of
business selling duty-free goods was in "operation and effect" a direct tax on exports).
53 Richfield, 329 U.S. at 83-84.
54 SeeWash.Stevedoring, 435 U.S. at756n.21(distinguishing between direct
and indirect taxes based on closeness of relation between measure of tax and value of
goods); Richfield, 329 U.S. at 84 ("[A] tax on the sale of an article . . . is a tax on the
article itself." (quoting Brown v. Maryland, 25 U.S. 419, 444 (1827))).
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----------------------- Page 15-----------------------
outside the scope of the Import-Export Clause. In Washington Stevedoring the Court
upheld Washington's occupation tax on loading export cargo, as the tax was measured
by the amount of loading activity rather than the value of the goods, and was therefore
55 Similarly, the Court held in Itel Containers International Corp.
not a tax on the goods.
v. Huddleston that a sales tax levied on the lease of shipping containers was not a direct
56 In both cases, the taxes were indirectly
tax on the export goods stored in the containers.
57 And the taxes
based on the volume of export goods, not directly on their retail value.
were imposed on the provider of a service "distinct from the goods and their value," not
the buyer or seller of the goods.58
The landing tax, on the other hand, is assessed on the value of the
unprocessed fish as calculated from the weight and species of the processed fish product
once landed.59 The Department describes this measure as "a proxy for the extent of
[North Pacific's] business activities in Alaska," but this does not change the fact that the
tax is actually calculated based on the value of the fish. The sales tax at issue in Richfield
could also rationally have been described as a proxy for the extent of the exporter's
55 Wash. Stevedoring, 435 U.S. at 755-56.
56 507 U.S. 60, 77 (1993).
57 Id. ("[The] tax is levied on leases transferring temporary possession of
containers to third parties in Tennessee; it is not levied on the containers themselves or
on the goods being imported in those containers."); Wash. Stevedoring, 435 U.S. at 763
(Powell, J., concurring).
58 Wash. Stevedoring, 435 U.S. at 737 (majority opinion); see also Itel
Containers, 507 U.S. at 77.
59 AS 43.77.010; AS 43.77.200(7) (describing value calculation).
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60
business activities in California, but it was still a tax on the export goods. So is the
landing tax.
The measure of the landing tax is based directly on the value of the fish
product, not indirectly on its volume. Further, the tax is imposed on the entity producing
61 The landing
and selling the fish product, not a third party providing a distinct service.
tax falls on the fish product; whether this is permissible therefore turns on whether the
product is in export transit when the tax takes effect.
b. The landing tax is applied before the fish product enters
the stream of export commerce.
Under Richfield a tax does not violate the Import-Export Clause unless it
is imposed on goods in export transit.62
If the landing tax is assessed before the fish
product enters the stream of export commerce, it is permissible. North Pacific argues
that the fish product enters export transit when it crosses from the EEZ to Alaska's
territorial waters, because after that point it is merely in transit through the state and
cannot be taxed. North Pacific alternatively claims that the tax is assessed
simultaneously with the fish product's entrance to the stream of export commerce when
it is unloaded from the catcher/processors. The Department responds that the fish
product is not merely in transit through Alaska and that the tax is triggered by landing
the fish product, which occurs before it is committed to export transit.
i. The fish product's movement from the EEZ to
Alaska does not begin export transit.
Wefirst concludethat North Pacific'sfish product does not enter thestream
60 See Richfield Oil Corp. v. State Bd. of Equalization, 329 U.S. 69, 80 (1946).
61 See Itel Containers, 507 U.S. at 77; Wash. Stevedoring, 435 U.S. at 737-38.
62 Richfield, 329 U.S. at 82-83 (holding that a good becomes an untaxable
export only when physically committed to export transit).
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of export before reaching an Alaska port. Its continuous route to export does not begin
in the EEZ because transport from the EEZ to Alaska - the only state the fish product
will ever enter - is not interstate commerce and the product is therefore not merely in
transit through the state. North Pacific is merely preparing the fish product for export
when its vessels bring the fish product toward port. This is not enough to commit the
fish product to export transit. Only when the fish product reaches the hold of a foreign-
flagged cargo ship does it become a tax-exempt export.
The moment when the export process begins and goods become exempt
from taxation "is not an easy matter to designate or define, and yet it is highly important,
both to the shipper and to the state, that it should be clearly defined so as to avoid all
63 To define this moment courts consider whether the goods have
ambiguity or question."
64 And what constitutes entrance to
been committed on a "continuous route" to export.
the stream of export commerce may depend on whether the goods have entered the
stream of interstate commerce.65
The Supreme Court first announced its stream of export doctrine in Coe v.
66
Town of Errol. New Hampshire had taxed logs stored on a New Hampshire riverbank
while on their way downstream to be exported.67 Some of the timber had been felled in
63 Coe v. Town of Errol, 116 U.S. 517, 526 (1886).
64 Id. at 527.
65 Id.
66 Id.
67 Id . Coe was decided under the Commerce Clause, but the Court has
repeatedly explained that the same analysis applies in Import-Export Clause cases. See,
e.g., Dep't of Revenue v. Ass'n of Wash. Stevedoring Cos., 435 U.S. 734, 752 (1978);
Kosydar v. Nat'l Cash Register Co., 417 U.S. 62, 67 (1974); Empresa Siderurgica v. Cty.
(continued...)
-17- 7524
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68
New Hampshire, some shipped from out of state. And in its analysis, the Court
69
distinguished between the two sources of timber.
It held the tax unconstitutional as
applied to the out-of-state logs, which had entered the export stream when they left their
70 But the Court upheld the tax on
state of origin and were already in transit when taxed.
the local timber, explaining that the intrastate movement of a product was not part of the
export journey:
The carrying of [a product] . . . to the depot where the
journey is to commence, is no part of that journey. . . . Until
actually launched on its way to another state . . . . its
destination is not fixed and certain. It may be sold or other
wise disposed of within the state, and never put in course of
transportation out of the state. Carrying it from the farm or
the forest to the depot is only an interior movement . . . . It is
no part of the exportation itself. Until shipped or started on
its final journey out of the state its exportation is . . . not at all
a fixed and certain thing.[71]
The logs would not become untaxable exports until being shipped to another state,
72 Prior movement
"start[ing] upon such transportation in a continuous route or journey."
(...continued)
of Merced, 337 U.S. 154, 156 (1949); Richfield, 329 U.S. at 79.
68 Coe, 116 U.S. at 525-26.
69 Id.
70 Id. at 526; see also Carson Petroleum Co. v. Vial, 279 U.S. 95, 109 (1929)
(concluding oil transported into state and stored for exportation was exempt from state
tax).
71 Coe, 116 U.S. at 528-29.
72 Id. at 527.
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in their state of origin was merely "partial preparation" for export and did not trigger tax
exemption.73
More recent cases have relied on Coe's distinction between goods
originating in the taxing state and those merely in transit through it. In Sumitomo
Forestry Co. of Japan v. Thurston County, Washington state levied a tax on logs that had
been cut in the state, transported across the state, and stored in a state harbor awaiting
export.74 The Ninth Circuit upheld the tax because the logs, which were not "interrupted
on a journey through Washington from another state to a foreign destination," had not
yet entered the stream of export.75
The Texas Supreme Court has applied a similar analysis to the import
process. In Diamond Shamrock Refining & Marketing Co. v. Nueces County Appraisal
District the court held that oil imported directly to Texas was subject to local taxation
while en route.76 While recognizing that Richfield barred state taxes on goods in import
transit, the Texas court concluded that this limitation "clearly applies only to goods in
transit through the state to or from another state and not to goods merely in transit within
the only state the goods ever enter."77 It determined that the imported oil was not merely
passing through Texas, because "[a]lthough still on its foreign import journey and in that
73 Id. at 525, 527.
74 504 F.2d 604, 606 (9th Cir. 1974).
75 Id. at 609.
76 876 S.W.2d 298, 304 (Tex. 1994).
77 Id. at 301.
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78
sense 'in transit,' the oil in question here entered only the [s]tate of Texas." It had
therefore ceased to be a tax-exempt import.
Similarly, under Coe the landing tax's constitutionality depends in part on
whether fish product moving from the EEZ through Alaska territorial waters to an
79 It is true that the fish product originates
Alaska port is already moving interstate.
outside Alaska, but it is also true that Alaska is the only state it will ever enter. Unlike
goods "merely passing through" multiple states on their way to export, the fish product
in this case passes through no state but Alaska. We thus conclude that transporting the
fish product from the EEZ to the Alaska coast is only "partial preparation" to export it
and does not commence export transit.80
ii. The fish product is committed to export transit
only when it reaches the hold of a cargo vessel, and
the landing tax is assessed before this occurs.
Thefish product enters the streamof export commerce only when it reaches
the hold of a foreign-flagged cargo vessel. In finding otherwise the superior court relied
largely on the "certainty of [the fish's] foreign destination." But as the Supreme Court
78 Id.
at 300-01 (emphasis in original).
One year later, in contrast, the Texas court struck down a tax on goods that
had originated out of state and were "merely passing through" on their way to export.
Va. Indonesia Co. v. Harris Cty. Appraisal Dist., 910 S.W.2d 905, 910-15 (Tex. 1995).
It explained that Diamond Shamrock had dealt with imported oil that "was not
transported to or from another state," but had not reached "the issue of whether the
import-export clause prohibits state taxation of goods passing through Texas on their
way to a foreign country." Id. at 910 (emphasis in original) (citing Diamond Shamrock,
876 S.W.2d at 299-300). The court concluded that the goods originating out of state and
but it did not
passing through Texas were constitutionally protected from state taxation,
upset its previous ruling. Id. at 914-15.
79 See Coe, 116 U.S. at 525.
80 See id.
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----------------------- Page 21-----------------------
has explained, such certainty is not enough; only physical commitment to the stream of
81
export suffices.
It has long been the rule that the intent of the would-be exporter is not
82
dispositive, even if the goods were produced for or legally committed to export.
Articles intended for export are not "relieved from the prior ordinary burdens of taxation
which rest upon all property similarly situated. The exemption attaches to the export,
and not to the article before its exportation."83
Goods become tax-exempt exports only when physically committed to
export transport. In Empresa Siderurgica v. County of Merced a cement plant was sold
to an overseas company, which took title and was preparing the plant for export when
the state assessed a tax on it.84 The Supreme Court rejected an Import-Export Clause
challenge to the tax, explaining "it is not enough that there is an intent to export, or a
plan which contemplates exportation, or an integrated series of events which will end
with it."85
Only physical commitment to export commerce confers tax exemption. The
Court acknowledged that export was highly likely, but cautioned that this "prospect, no
86
matter how bright, does not start the process of exportation."
81 See Kosydar v. Nat'l Cash Register Co., 417 U.S. 62, 71 (1974); Empresa
Siderurgica v. Cty. of Merced, 337 U.S. 154, 157 (1949).
82 See, e.g., Cornell v. Coyne, 192 U.S. 418, 427 (1904) (determining state
manufacturing tax was constitutionally levied on goods produced specifically for export).
83 Id. (emphasis added).
84 337 U.S. at 155.
85 Id. at 156-57.
86 Id . at 157; see also Kosydar, 417 U.S. at 70 (holding even the "practical
certainty" of export for warehoused machines awaiting export was insufficient for tax
(continued...)
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In keeping with this precedent we conclude that, as in Richfield, the fish
product enters the stream of export only when it arrives on the cargo vessel which will
87 Once the fish product reaches the cargo vessel's hold, it has
take it out of the country.
been definitively committed to export, as the foreign-flagged ship cannot legally deliver
it to a domestic market.88 But before this occurs there remains a possibility that the fish
product could be diverted, and so it is not yet an export.89
Finally, we conclude that the landing tax is assessed before the fish product
has been definitely committed to export and gained tax exemption under the Import-
Export Clause. Under the Alaska Administrative Code the tax applies "at the moment
the act of landing begins."90 "Landing" is statutorily defined as "the act of unloading or
transferring a fishery resource."91 The landing tax is thus triggered by the
commencement, not the completion, of "the act of landing." But the fish product is not
committed to export transit until it arrives on the cargo vessel, and by this time the tax
has already been assessed.92
(...continued)
exemption).
87 See Richfield Oil Corp. v. State Bd. of Equalization, 329 U.S. 69, 82-83
(1946).
88 See 46 U.S.C. §§ 12102, 12103, 12112.
89 See Richfield, 329 U.S. at 83 ("[W]hen the oil was pumped into the hold of
the vessel . . . there was nothing equivocal in the transaction which created even a
probability that the oil would be diverted to domestic use.").
90
15 AAC 77.030.
91
AS 43.77.200(4).
92
The fish product first transported to refrigerated containers or dockside
(continued...)
-22- 7524
----------------------- Page 23-----------------------
We therefore conclude that the landing tax is permissible under Richfield
as well as Michelin and does not violate the Import-Export Clause. We now turn to
North Pacific's remaining claims.
B. The Landing Tax Does Not Violate The Tonnage Clause.
North Pacific alternatively challenges the landing tax under the Tonnage
93
Clause, which forbids states to "lay any Duty of Tonnage" on vessels,
or impose
94
charges for "entering, trading in, or lying in a port," without congressional consent.
North Pacific argues that the landing tax is imposed directly on its vessels solely for their
95
use of Alaska ports and navigable waters and is thus unconstitutional. The superior
court concluded that the tax violated the Import-Export Clause and thus did not reach this
issue; because we conclude that the tax is permissible under the Import-Export Clause,
we must also address North Pacific's Tonnage Clause arguments. We conclude that
these fail as well.
92 (...continued)
storage is landed and taxed long before being committed to export transit in the cargo
hold of a foreign vessel. We note that the closest question here is the fish product moved
directly from a fishing vessel to a foreign cargo vessel, but conclude that beginning the
landing process is still part of "an integrated series of events which will end with" the
product's commitment to export. See Empresa Siderurgica v. Cty of Merced , 337 U.S.
154, 157 (1949) (stating that "an intent to export, . . . an integrated series of events which
will end with" export, a contract for export, and completed export of other goods under
same contract were inadequate to commit goods to export).
93
U.S. Const. art. I, § 10, cl. 3.
94
ClydeMalloryLines v. Alabamaexrel. StateDocks Comm'n, 296 U.S.261,
263, 265-66 (1935).
95
North Pacific defines the term "ports" in this context as encompassing "all
navigable waters." It therefore argues that the landing tax would violate the Tonnage
Clause regardless of where in Alaska's territorial waters the fish product was unloaded.
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----------------------- Page 24-----------------------
The TonnageClausewas intendedto supplement theImport-Export Clause
and Commerce Clause, preventing coastal states from indirectly taxing imports and
96
exports by taxing the vessels used to transport them. Although the text of the clause
97
- it "has been
prohibits only taxes based on "tonnage" - a vessel's cargo capacity
deemed to embrace all taxes and duties regardless of their name or form, and even
though not measured by the tonnage of the vessel, which operate to impose a charge for
98
the privilege of entering, trading in, or lying in a port."
Like the Import-Export Clause, the Tonnage Clause should be read in light
of its purpose: to prevent coastal states from abusing their taxing power to disadvantage
99
their landlocked neighbors. However it should not be construed so as to disadvantage
the coastal states themselves by giving vessels and their owners "preferential
100
treatment." It simply prohibits discriminatory taxes imposed specifically on vessels,
which would effectively tax imports and exports to the detriment of landlocked states.
In keeping with this purpose, the Tonnage Clause does not bar all charges
101 Vessels may be taxed for general revenue purposes,
that might be imposed on vessels.
provided the tax does not discriminate against vessels as such: "in order to fund services
96 See Polar Tankers, Inc. v. City of Valdez , 557 U.S. 1, 6-7 (2009).
97 Tonnage, BLACK 'S LAW DICTIONARY (11th ed. 2019).
98
Clyde Mallory Lines, 296 U.S. at 265-66.
99
Polar Tankers, Inc., 557 U.S. at 6-7.
100
Id. at 9 (citing Michelin Tire Corp. v. Wages, 423 U.S. 276, 287 (1976)).
101 Id.
-24- 7524
----------------------- Page 25-----------------------
102
by taxing ships, a [s]tate must also impose similar taxes upon other businesses." This
similarity requirement discourages coastal states from indirectly taxing the citizens of
neighboring states through discriminatory taxation of the import/export process. It also
prevents the imposition of duties on vessels based strictly on tonnage or that operate as
103
a charge solely for "entering, lying in, or trading in a port."
In the Supreme Court's first Tonnage Clause case since 1935, it struck
down a municipal property tax on large vessels using the port of Valdez.104 The ships'
values were closely correlated with their cargo capacity and the tax was imposed directly
on the vessels, thus violating the Tonnage Clause.105 The Court reiterated that the Clause
was "not a ban on any and all taxes which fall on vessels."106 But the Valdez tax ran
afoul of the Tonnage Clause's text and purpose: it was imposed on vessels, was based
on cargo capacity, was unlike any tax levied against other properties or businesses, and
therefore was a discriminatory exercise of the taxing power injurious to interstate
107
commerce.
102 Id . at 12.
103 See Clyde Mallory Lines , 296 U.S. at 266.
104 Polar Tankers, Inc., 557 U.S. at 12 (plurality opinion).
105 Id. at 10.
106 Id. at 9 (emphasis omitted).
107 Id. at 12-13. In cases with no majority, "the position taken by those
Members who concurred in the judgments on the narrowest grounds" controls. Marks
v. United States , 430 U.S. 188, 193 (1977) (quoting Gregg v. Georgia , 428 U.S. 153, 169
n.15 (1976)). The concurrence in Polar Tankers would have barred a broader swath of
taxes on vessels, 557 U.S. at 17 (Roberts, C.J., concurring), and the dissent would have
upheld the tax. Id. at 20 (Stevens, J., dissenting). The plurality opinion has the
narrowest reasoning and thus controls.
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----------------------- Page 26-----------------------
Unlike the Valdez tax, the landing tax is assessed on the fish product itself
and is not a tax on vessels at all, putting it beyond the scope of the Tonnage Clause.
Further, the tax does not conflict with the Clause's purposes. It does not create friction
with other states or discriminate against vessels. We therefore hold that the landing tax
does not violate the Tonnage Clause.
NorthPacificargues that itsactivities in Alaskaconsist of"entering, trading
in, or lying in a port," and that the landing tax must therefore fall unconstitutionally on
its vessels for these activities. But North Pacific is subject to the landing tax because it
operates a floating fisheries business, not because it enters Alaska ports as part of that
108
business.
As North Pacific itself points out, the tax does not apply to other vessels
"entering, trading in, or lying in" Alaskan ports, including those delivering fish to
Alaskan processors or those that "simply transport the fish products through the state
without unloading or transferring them." The landing tax is assessed on fish product first
landed in Alaska by floating fisheries businesses, not on the component business activity
109
of "entering and trading in" Alaska ports.
108 AS 43.77.010; 15 AAC 77.005.
109 Similarly, in Alaska v. Arctic Maid the Supreme Court concluded that
Alaska could tax the operation of freezer ships "in connection with Alaska's commercial
fisheries" when the ships operated in the EEZ but processed fish taken in Alaska waters.
366 U.S. 199, 200, 205 (1961). The Court determined that the activities outside the state
werecomponentsofthelarger occupation being taxed and "practicallyinseparable"from
the "series of local activities which the [s]tate can constitutionally reach." Id. at 203-04.
The fishers were thus "engaged in business in Alaska when they operate their 'freezer
ships,' " even when the ships themselves were operating outside the state. Id. at 203.
While Arctic Maid was a Commerce Clause challenge, the Court's refusal
to artificially separate parts of a business operation taxed as a whole is instructive here.
See id . at 203-04. North Pacific's commercial activities necessarily involve entering
ports, but that is not the basis for the landing tax, and business operations do not become
(continued...)
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----------------------- Page 27-----------------------
North Pacific also argues that the landing tax, like the tax at issue in Polar
Tankers, discriminates against vessels. But unlike a property tax imposed only on large
ships, the landing tax mirrors similar taxes imposed on all participants in the fish
processing business, including those that operate only on land. It is "designed and
110 which is imposed on all entities
intended to . . . complement the fisheries business tax"
processing fish within Alaska, both on-shore and off-shore.111 The landing tax does not
impose a disproportionate tax rate on EEZ catcher/processors like North Pacific -to the
contrary, they are taxed at an equal or lower rate than the rest of the commercial fishing
industry.112 Alaska is meeting its obligation to "also impose similar taxes upon other
businesses."113
North Pacific's reading of the Tonnage Clause would expand it from
protecting vessels and their owners from discrimination to giving them "preferential
treatment vis-Ă -vis all other property, and its owners, in a seaboard [s]tate."114 This is
precisely what the Supreme Court cautioned against in Polar Tankers. As the
Department points out, it is difficult to imagine what activities using or pertaining to
vessels would remain taxable under this theory: virtually all of them involve entering,
(...continued)
exempt from taxation simply because one component would be individually untaxable.
110 15 AAC 77.005(a).
111 AS 43.75.015, 43.75.100.
112 Compare AS 43.75.015, with AS 43.77.010.
113 Polar Tankers, Inc. v. City of Valdez, 557 U.S. 1, 12 (2009) (plurality
opinion).
114
Id. at 9.
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----------------------- Page 28-----------------------
trading in, or lying in ports or navigable waters and by North Pacific's argument would
consequently be exempt from taxation.
The landing tax is not imposed on North Pacific's vessels or on the act of
entering, trading in, or lying in Alaska's ports, nor does it discriminate against vessels
or impede commerce. We therefore conclude that it does not violate the Tonnage Clause.
C. The Landing Tax Does Not Violate 33 U.S.C. § 5(b).
Finally, North Pacific claims that the landing tax violates 33 U.S.C. § 5(b),
which prohibits non-federal taxation of vessels for operating on navigable waters. The
superior court did not reach this issue; having determined that the tax is constitutional,
we now must do so. And for the same reasons the landing tax does not violate the
Import-Export or Tonnage Clause, we conclude that it does not violate 33 U.S.C. § 5(b).
Inrelevant part, 33 U.S.C. §5(b)prohibitsnon-federal entities fromlevying
"taxes . . . or any other impositions whatever" on "any vessel . . . or its passengers or
crew . . . if the vessel or water craft is operating on any navigable waters subject to the
authority of the United States . . . ." This language echoes the Tonnage Clause
prohibition against taxing vessels as vessels, or solely for their use of ports and navigable
waters. Importantly § 5(b) does not prohibit taxes on things other than vessels,
passengers, and crews. 115
Legislativehistory indicatesthat§5(b) was also meant to codify Commerce
Clause common law: as a sponsor of the bill explained, it was intended to prohibit state
or local taxes from being imposed "on vessels merely transiting or making innocent
115 33 U.S.C. § 5(b); see also CSX Transp., Inc. v. Ala. Dep't of Revenue , 888
F.3d 1163, 1184 (11th Cir. 2018); Commercial Barge Line Co. v. Dir. of Revenue , 431
S.W.3d 479, 484 (Mo. 2014) (en banc) ("[Taxpayers'] argument fails to consider what
the state is actually taxing. Missouri is not taxing the barges, towboats, or their crews.
Rather, it is assessing sales and use tax on the goods and supplies delivered to the
Taxpayers' towboats while they are in Missouri.").
-28- 7524
----------------------- Page 29-----------------------
passage through navigable waters . . . adjacent to the taxing community . . . . In most
instances, these types of taxes would not be allowed under the Commerce Clause of the
116 Courts therefore consider whether a tax challenged under
United States Constitution."
§ 5(b) discriminates against interstate commerce as well as whether it is imposed on
vessels, passengers, or crews.117 For example, a Hawaii court upheld the application of
a tax on business receipts to a charter fishing boat company.118 The state's business tax
was not imposed on vessels, did not discriminate against vessels, and was not levied
against vessels for "merely transiting or making innocent passage" through Hawaiian
waters.119 It was therefore not barred under § 5(b).
In contrast, in State, DepartmentofNatural Resourcesv. AlaskaRiverways,
Inc. we struck down a purported rental fee assessed on a per-passenger basis for a tour
120 As the per-passenger fee was unrelated
boat operator's useofstate-owned river banks.
to the rental value of the land being used, it functioned as "a charge exacted specifically
116 148 C ONG. R EC. 2,143 (2002) (statement of Rep. Young); see also H. R.
R
EP. No. 107-777, at 1 (2002) (Conf. Rep.).
117
SeeState, Dep't of Nat. Res. v. Alaska Riverways, Inc., 232 P.3d 1203, 1222
(Alaska 2010) (explaining that § 5(b), "like the Commerce and Tonnage Clauses,
prohibits levying fees on the use of navigable waters unless those fees do not impose a
significant burden on interstate commerce"); Reel Hooker Sportfishing, Inc. v. State,
Dep't of Taxation, 236 P.3d 1230, 1235-36 (Haw. App. 2010); Lil' Man In The Boat,
Inc. v. City & Cty. of San Francisco, No. 17-cv-00904-JST, 2019 WL 8263440, at *8-9
(N.D. Cal. Nov. 26, 2019).
118
Reel Hooker Sportfishing, Inc., 236 P.3d at 1234-36.
119
Id. at 1235 (quoting 148 CONG. R EC. 2,143 (2002)).
120 232 P.3d at 1222-23.
-29- 7524
----------------------- Page 30-----------------------
121
for the use of navigable waters." We concluded that it thus violated § 5(b)'s
prohibition on taxing vessels or their passengers.
North Pacific argues that the landing tax, like the per-passenger fee,
operates as a charge on the use of navigable waters and thus violates 33 U.S.C. § 5(b).
The Department responds that the tax is not on vessels, passengers, or crews and is
assessed on an entirely independent basis: the value of the unprocessed fish caught by
North Pacific and converted into frozen fish product.
We agree with the Department. The landing tax is not imposed on the
vessels or their passengers or crew, nor "exacted specifically for the use of navigable
122 Unlike the rental fee we previously rejected, the tax is assessed on an activity
waters."
separate from the vessels or crew and rationally linked to the impact of that activity on
state resources. The landing tax is not opportunistic taxation of vessels "merely
transiting" adjacent waters without landing or benefitting from any local services. Nor
does it impermissibly burden or discriminate against interstate commerce. The landing
tax does not violate the Import-Export or Tonnage Clauses, and for the same reasons we
conclude that it does not violate § 5(b).
NorthPacific'sargumentwould drasticallyexpand §5(b)'s reach. It claims
that even if the landing tax is not imposed on vessels, it applies only to activities
involving vessels, and the Department "provides no explanation of how a vessel can
engage in [landing fish product] within Alaska without using its navigable waters." But
again North Pacific does not explain how any activity involving vessels could be taxed
without violating § 5(b) under this theory. Its suggested interpretation would go beyond
121 Id. at 1221.
122 Id.
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----------------------- Page 31-----------------------
the statute's text, stated purpose, and the constitutional principles it expresses. We reject
North Pacific's 33 U.S.C. § 5(b) challenge along with its constitutional claims.
V. CONCLUSION
Weconcludethat thelandingtaxdoesnotviolatetheImport-Export Clause,
the Tonnage Clause, or 33 U.S.C. § 5(b). We therefore REVERSE the superior court's
decision and AFFIRM the decision of the Office of Administrative Hearings.
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