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You can search the entire site. or go to the recent opinions, or the chronological or subject indices. City of Valdez v. Polar Tankers, Inc. (04/25/2008) sp-6254

City of Valdez v. Polar Tankers, Inc. (04/25/2008) sp-6254, 182 P3d 614

     Notice:   This opinion is subject to correction  before
     publication  in  the  Pacific  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,


) Supreme Court Nos. S- 12218/12223
Appellant and )
Cross-Appellee, ) Superior Court No. 3AN-00-09665 CI
v. ) O P I N I O N
POLAR TANKERS, INC., ) No. 6254 April 25, 2008
Appellee and )
Cross-Appellant. )

          Appeal  from the Superior Court of the  State
          of    Alaska,   Third   Judicial    District,
          Anchorage, Peter A. Michalski, Judge.

          Appearances: Debra J. Fitzgerald and  William
          M. Walker, Walker & Levesque, LLC, Anchorage,
          for  Appellant and Cross-Appellee.   Leon  T.
          Vance,  Faulkner Banfield, P.C., Juneau,  and
          Susan  Orlansky and Eric T. Sanders,  Feldman
          Orlansky  & Sanders, Anchorage, for  Appellee
          and Cross-Appellant.

          Before:    Fabe,  Chief  Justice,   Matthews,
          Eastaugh, and Carpeneti, Justices.   [Bryner,
          Justice, not participating.]

          EASTAUGH, Justice.

          The  City of Valdez adopted an ad valorem property  tax
on large vessels docking at private facilities in Valdez, and the
city council thereafter adopted an apportionment formula based on
days spent in port for taxing large vessels engaged in interstate
commerce.  Several transporters of oil, including Polar  Tankers,
Inc.,  challenged  the tax in superior court,  alleging  that  it
violated  the Due Process, Commerce, and Tonnage Clauses  of  the
Federal  Constitution.   We hold that the  apportionment  formula
does  not create a risk of duplicative taxation; it was therefore
error to declare the ordinance unconstitutional as applied.
     A.   Factual History
          In 1999 the City of Valdez adopted Ordinance No. 99-17,
an  ad valorem property tax (vessel tax) on certain large vessels
docking  at  private  facilities in  the  city.  Part  A  of  the
ordinance describes the affected vessels:
          Boats  and  vessels of at least  95  feet  in
          length    for    which    certificates     of
          documentation have been issued under the laws
          of  the United States are subject to taxation
          at  their  full  and true  value  unless  the
          vessel  is  used primarily in some aspect  of
          commercial  fishing or docks  exclusively  at
          the  Valdez  Container Terminal where  it  is
          subject to municipal dockage charges.[1]
          The  city  subsequently interpreted the  exception  for
vessels  docking exclusively at the Valdez Container Terminal  to
also  apply  to  vessels docking exclusively at other  city-owned
docks.   Part  B  of the ordinance provides for  taxation  on  an
apportionment basis and for adoption of assessment formulas:
          Vessels operated in intrastate, interstate or
          foreign commerce that have acquired a taxable
          situs  elsewhere,  shall be  assessed  on  an
          apportionment  basis.   The  assessor   shall
          allocate to the City the portion of the total
          market  value  of  the property  that  fairly
          reflects  its use in the City.  The  assessor
          shall establish formulas for calculating  the
          proportion   of   the  total   market   value
          allocated   to  the  City.   The   assessment
          formula   shall  be  approved  by  the   city
          The  vessel  tax  was  proposed  to  address  what  was
described  as  a serious erosion of the citys tax base,  much  of
which is oil- and gas-related property.  For several years before
passage  of  the  ordinance, the portion of the  citys  tax  base
consisting  of  oil and gas property had been declining  rapidly,
and  it  would  continue to decline under a depreciation  formula
negotiated  between the State of Alaska and  the  owners  of  the
Trans Alaska Pipeline System (TAPS).
          In  accordance  with  Part B of  the  1999  vessel  tax
          ordinance, in 2000 the city council adopted a resolution
containing an apportionment formula.  Section 1 of Resolution No.
00-15 adopted a tax apportioned on the days spent in port:
          A vessel owner will pay the personal property
          tax  based  on  100 percent of  the  assessed
          value, times a ratio determined by the number
          of  days spent in Valdez divided by the total
          number  of days spent in all ports, including
          Valdez, where the vessel has acquired a situs
          for taxation.[3]
We refer to this as a port-day apportionment formula. The formula
also  exempts periods when a vessel is tied up because of strikes
or  withheld from the Alaska service for repairs.4  Section 2  of
the 2000 resolution contingently provides for adoption of another
apportionment formula that will more fairly represent  how  value
should be apportioned.5  It provides:
          If  a  taxpayer claims that in  a  particular
          case  the  apportionment formula approved  in
          this Resolution does not reasonably represent
          the  portion of the total value of the vessel
          that  should  be apportioned  to  the  taxing
          situs  of  Valdez, the taxpayer may petition,
          or  the  assessor  may require,  the  use  of
          another apportionment formula that will  more
          fairly  represent  how the  value  should  be
          apportioned  among Valdez  and  other  taxing
          Polar  Tankers,  Inc.  operates  tanker  vessels   that
transport crude oil from the TAPS terminal in Valdez to ports  in
Washington, California, and Hawaii.  In Valdez, Polar loads crude
oil  at  the Alyeska Marine Terminal, a private dock owned  by  a
consortium of oil companies  the TAPS owners.  Polar is a  wholly
owned subsidiary of ConocoPhillips Company.  The city issued  tax
statements  for  each of the assessed vessels in  early  July  of
2000,  2001, 2002, 2003, and 2004.  Polar paid the assessed taxes
under  protest  each  year.  The taxes it paid  each  year  were:
$440,221.24 in 2000; $398,157.62 in 2001; $1,037,530.12 in  2002;
$1,433,072.20 in 2003; and $1,657,249.02 in 2004.
     B.   Procedural History
          After the city enacted the apportionment resolution  in
2000,  Polar sued the city in superior court, claiming the vessel
tax  violated the Due Process, Commerce, and Tonnage  Clauses  of
the  Federal Constitution.  Polar was initially joined by several
other  tankship companies.  Over the next three years,  the  city
settled  with  all  of the plaintiffs except Polar  and  SeaRiver
Maritime,  Inc.   In  2004  the  superior  court  granted   these
plaintiffs  motion for summary judgment, holding that the  vessel
tax  was an unconstitutional duty on tonnage.  The city moved for
reconsideration.  The superior court granted the  reconsideration
motion,  vacated its earlier ruling, and directed the parties  to
brief  seven  legal and factual questions.  In January  2005  the
superior  court  issued  a decision and  order  ruling  that  the
          apportionment method violated the Due Process and Commerce
Clauses.   It declined to rule on the Tonnage Clause issue.   The
city  moved for summary judgment on that issue, and the  superior
court  granted  the  citys  motion in July  and  concluded  that,
assuming the vessel tax was fairly apportioned, the tax would not
violate the Tonnage Clause.
          In  January  2006 the superior court issued  its  final
judgment holding that the tax did not violate the Tonnage Clause,
but  that the port-day apportionment formula, as applied  to  the
plaintiffs,  violated the Due Process and Commerce Clauses.   The
judgment permitted the city to levy the vessel tax as soon as  it
adopted a constitutional apportionment formula, and required  the
city to repay all taxes overpaid by the plaintiffs, as calculated
using  the  new  apportionment  formula.   The  city  moved   for
clarification  of  the  final judgment.   The  court  denied  the
clarification motion but stayed the judgment and ordered that the
city  could not levy against Plaintiffs any amount of tax  beyond
the  amount  that would be due using this apportionment  formula:
Days  in  Valdez/365.  The court ordered that the amount be  paid
into  a  court-supervised account until the appeal was terminated
by  agreement of the parties or decision of this court.  Finally,
the superior court denied all parties motions for attorneys fees.
          Three  parties appealed.  SeaRiver eventually dismissed
its  appeal,  and the citys and Polars appeals were consolidated.
On  appeal,  the  city  challenges the Due Process  and  Commerce
Clause rulings and Polar challenges the Tonnage Clause ruling.
     A.   Standard of Review
          We  review  summary judgment rulings on  constitutional
issues such as the Due Process, Commerce, and Tonnage Clauses  de
     B.   The  Vessel Tax Apportionment Formula Does Not  Violate
          the Due Process Clause or the Commerce Clause.
          Polar  contends  that the vessel tax violates  the  Due
Process  and Commerce Clauses of the Federal Constitution.8   The
superior  court  held that the tax, Valdez Ordinance  99-17,  was
constitutional,  but  that  the  port-day  apportionment  formula
contained in Valdez Resolution 00-15 violated the Due Process and
Commerce Clauses.9
          Due  process requires that: (1) the property taxed have
a  physical  presence  and minimal connections  with  the  taxing
sovereign  (thus giving it a tax situs)10; and  (2)  the  tax  be
fairly  apportioned  to  opportunities, benefits,  or  protection
conferred or afforded by the taxing [authority].11
          In  Complete  Auto  Transit, Inc. v. Brady  the  United
States Supreme Court laid out the test for determining whether  a
tax  on mobile property used in interstate commerce satisfies the
Commerce Clause.12  The Complete Auto test requires that: (1) the
property   taxed  have  a  substantial  nexus  with  the   taxing
jurisdiction; (2) the tax be fairly apportioned; (3) the tax  not
discriminate  against interstate commerce; and  (4)  the  tax  be
fairly related to the services provided by the jurisdiction.13
          The  Supreme  Court  has noted that the  Complete  Auto
          test, while responsive to Commerce Clause dictates, encompasses
as well . . . due process requirement[s].14  We therefore consider
minimal connection/substantial nexus and fair apportionment under
both clauses simultaneously.
          1.   There  is  a substantial nexus between Valdez  and
               the  vessels,  such that Valdez has become  a  tax
          The  parties agree that Polars presence and  activities
in  Valdez are sufficient to permit the city to tax its  vessels,
and  that  Valdez  is  therefore a tax situs  for  Polar.   Ample
evidence  supports  this  conclusion.   There  is  a  direct  and
significant economic connection between the city and Polar.  Most
of  Polars  business  involves the oil it loads  at  the  Alyeska
Marine  Terminal in Valdez, and the parties seem  to  agree  that
Polars  tankers spend an average of about forty-two port days  in
Valdez per year.  Furthermore, the city provides many services to
Polar.  The city assists the Coast Guard in regulating traffic on
dedicated  tanker lanes.  The significant presence of  the  Coast
Guard in the city is primarily due to the operations of Polar and
the  other  oil  shippers.  The city tells us the Alyeska  Marine
Terminal,  which  is  privately owned by  the  TAPS  owners,  was
financed  by $1.3 billion in tax-exempt revenue bonds  issued  by
the City.  Polar has at least one employee permanently located in
Valdez,  and  Polars employees, including the vessel crews,  have
access  to all the services provided by the city, such as  police
protection, airport, roads, and hospitals.  The city is  involved
in  oil  spill contingency plans.  As demonstrated by  the  Exxon
Valdez  oil  spill in 1989, the city is heavily affected  by  oil
spills;   following  the  Exxon  Valdez  spill,  cleanup  efforts
continued  to  consume city resources for more than three  years.
All  of these factors create a substantial nexus between the city
and Polar such that Valdez has acquired the status of a tax situs
for purposes of the Due Process and Commerce Clauses.
          Because  we  agree with the parties that a  substantial
nexus exists, we also agree that Valdez is a tax situs for Polar.15
          2.   The vessel tax is fairly apportioned.
          The  superior  court concluded that the citys  port-day
apportionment formula by which the tax is calculated violates the
Due  Process and Commerce Clauses because the formula  creates  a
risk   of   multiple  taxation  and  is  therefore   not   fairly
apportioned.  We disagree.
          The    central   purpose   behind   the   apportionment
requirement  is  to ensure that each State taxes  only  its  fair
share of an interstate transaction.16  There is no single correct
method   of  apportionment;  rather,  a  tax  is  deemed   fairly
apportioned if it is both internally and externally consistent.17
Because  both  parties agree that the vessel  tax  is  internally
consistent  (i.e.,  if  all taxing jurisdictions  used  the  same
formula, a vessel would be taxed for one hundred percent  of  its
value), we address only external consistency.
          External consistency is the principle that looks to the
economic justification for the states claim upon the value taxed,
to  discover whether a states tax reaches beyond that portion  of
          value that is fairly attributable to activity within the taxing
state.18   According to Hellerstein & Hellerstein,  the  external
consistency test in substance is nothing more than another  label
for the fair apportionment requirement.19
          The  superior court concluded that the vessel  tax  was
not  fairly apportioned because the apportionment formula created
a  risk of duplicative taxation.  A tax may be invalid even if it
creates only a risk of duplicative taxation.  In Central Railroad
of  Pennsylvania  v.  Commonwealth of Pennsylvania,  the  Supreme
Court  stated that a domiciliary State is precluded from imposing
an  ad valorem tax on any property to the extent that it could be
taxed  by  another  State, not merely  on  such  property  as  is
subjected to tax elsewhere.20  We have similarly stated that  the
Commerce  Clause  is  triggered only upon an affirmative  showing
that property taxed by one jurisdiction has another taxable situs
and could be taxed elsewhere.21
          Polar admits that Valdez is a proper taxing situs.  But
Polar  nonetheless  argues  that  Valdezs  taxing  authority   is
subordinate to the taxing authority of Polars domicile  and  that
Valdezs apportionment scheme is unfair because it impinges on the
domiciles  taxing  authority,  creating  the  risk  of   multiple
taxation.   Polar  asserts  that  California  is  its  commercial
          Under  the home port doctrine, a vessel was subject  to
property  taxation in full at the domicile of the owner  and  not
elsewhere.22  But the Supreme Court in Japan Line, Ltd. v. County
of Los Angeles recognized that the home port doctrine has yielded
to  a rule of fair apportionment among situs states.23  The Court
there  noted that if the containers at issue in Japan  Line  were
instrumentalities of purely interstate commerce, a rule  of  fair
apportionment would have been applied.24
          Therefore, a rule of fair apportionment must be applied
to  the  taxation  of  Polars ships.  As  we  discuss  below,  an
apportionment formula is fair if it apportions the full value  of
a  ship between the taxing jurisdictions in which it is regularly
present  in proportion to the number of days during the tax  year
that the ship is present in each jurisdiction.  Our determination
that   Valdez  has  adopted  one  of  the  many  potential   fair
apportionment  schemes  it  could  choose  from  renders   Polars
assertion of home port superiority irrelevant.25
          Valdezs apportionment formula apportions the full value
of  a  ship  between  the taxing jurisdictions  in  which  it  is
regularly present in proportion to the number of days during  the
tax year that the ship is present in each jurisdiction.  Thus  if
we  assume  that a tanker is in port in Valdez for fifty  days  a
year  and in port in all jurisdictions including Valdez  for  150
days  per  year, the Valdez apportionment ratio would be  50/150.
There  is  no reason why the days at sea outside the jurisdiction
of  any taxing authority should be included in the denominator of
the  fraction.   This result is different, however,  from  Polars
contention that any jurisdiction is taxing for days spent at sea.26
          The  port-day  formula resembles the formula  that  was
involved   in  Braniff  Airways  v.  Nebraska  State   Board   of
Equalization  &  Assessment,  and whose  reasonableness  was  not
          challenged.27  The Braniff formula involved the ratio of aircraft
landings  in the taxing jurisdiction as compared to all  landings
in  all potential taxing jurisdictions.28  There is not too  much
difference  between landings and dockings, nor  between  dockings
and days in port.  Each of these measures assesses the extent  of
activity  in the taxing jurisdiction relative to the activity  in
all   taxing   jurisdictions.   This  satisfies   the   goal   of
apportionment, which is to ensure that each State taxes only  its
fair share of an interstate transaction.29  Most importantly  the
Braniff  formula taxed the whole aircraft in accordance with  the
ratio  indicated by the formula without carving out some separate
quantum  of  value for the aircrafts home port.   The  home  port
received  no special consideration even though the planes  likely
spent time flying over non-situs states.30
          The formula in Ott v. Mississippi Valley Barge Line Co.31
also  supplies an analogy.  In that case the apportionment  ratio
compared  the  number of barge miles in Louisiana  to  the  total
number  of barge miles in all state waters concerning the  routes
in  question.32  No special status, or even mention, was given to
the vessels home ports.  In Ott the vessels routes were from port
to  port on navigable rivers.33  But if instead a vessels regular
route was from St. Louis, Missouri through New Orleans, Louisiana
to Tampa Bay, Florida, it is hard to imagine that the denominator
would have to include miles traveled on the high seas outside the
taxing authority of any state.
          There  are  of  course  many conceivable  apportionment
formula‚ that might be fair.34  The port-days formula is but  one
such  example.   Because the formula is fair, and  accordingly  a
valid  formula for Valdez to use, and because Valdezs permissible
tax  necessarily limits the taxing authority of Polars  domicile,
there  is  no  concern about the risk of duplicative  taxation.35
Because the tax is fairly apportioned, the tax is also externally
          3.   Polar  waived  claims  of  discrimination  against
               interstate commerce and fair relation between  the
               tax and services provided.
          On  appeal, Polar only devotes a single sentence to the
third  element  of  the  Complete  Auto  test   whether  the  tax
discriminates against interstate commerce  stating in its  brief,
unfair  apportionment itself is a form of discrimination  against
interstate commerce.  Given the cursory nature of Polars  failure
to argue this issue separately, we consider it waived.36
          Even if we were to consider the issue on its merits, it
does  not  appear  that  the  vessel  tax  discriminates  against
interstate commerce.  In Moorman Manufacturing Co. v.  Bair,  the
United  States Supreme Court held that a tax did not violate  the
Commerce  Clause  even if it resulted in an out-of-state  company
paying  a greater portion of its income in taxes because the  tax
apportionment  method treat[ed] both local and  foreign  concerns
with  an  even  hand.37   According to  the  Court,  any  alleged
disparity was the consequence of the combined effect of  multiple
state  statutes, and a single state was not responsible for  that
combined effect.38  Like the tax in Moorman, the citys vessel tax
          applies equally to in-state and out-of-state vessels.  Any effect
on interstate commerce is incidental.
          Polar  also  waived any argument regarding  the  fourth
element  of  Complete Auto  whether the tax is fairly related  to
the  services provided.  Polar asserts that the tax is not fairly
related  to the services provided because the citys apportionment
method effectively treats a portion of [out-of-Valdez] time as if
the  tankers were present in Valdez.  But because Polar  has  not
briefed the issue we decline to address it.
          Because  Polar has attained a taxable situs in  Valdez,
and  because the vessel tax is fairly apportioned, we  hold  that
neither  the tax nor the apportionment formula violates  the  Due
Process Clause or the Commerce Clause.
     C.   The Vessel Tax Does Not Violate the Tonnage Clause.
          In its cross-appeal Polar asserts that the tax violates
the United States Constitutions Tonnage Clause,39 which prohibits
taxes  that  operate  to impose a charge  for  the  privilege  of
entering,  trading in, or lying in a port.40  The superior  court
initially  found  that the tax violates the Tonnage  Clause,  but
after  vacating  that judgment the superior court concluded  that
the  tax does not violate the Tonnage Clause.  In so ruling,  the
superior  court  noted that it had originally  misunderstood  the
taxpayers  argument on this matter.  Because the  parties  agreed
that  no trial concerning the Tonnage Clause claim was necessary,
and  because  (as  the  superior court  noted)  counsel  for  the
taxpayers  . . . clarified taxpayers agreement that had  the  tax
been  properly apportioned, the City has jurisdiction to tax  the
tankers,  the  superior  court dismissed  Polars  Tonnage  Clause
          The United States Constitution forbids the states from,
without  the Consent of Congress, lay[ing] any Duty of Tonnage.41
A  duty of tonnage is any tax or duty that operate[s] to impose a
charge for the privilege of entering, trading in, or lying  in  a
port, regardless of whether it is measured by the tonnage of  the
vessel.42   A  fairly apportioned property tax is not  a  tonnage
          Having concluded above that the disputed vessel tax  is
a  fairly  apportioned  ad valorem tax on personal  property,  we
necessarily  also  hold  that it does  not  violate  the  Tonnage
Clause.   The  vessels are taxed based on their value,  and  only
those  vessels that have acquired a taxable situs in  Valdez  are
taxed.44  Polar concedes that it has acquired a taxable situs  in
          In  Japan  Line,  Ltd. v. County of  Los  Angeles,  the
California Supreme Court sustained an ad valorem property tax  on
cargo  containers  against  a Tonnage  Clause  challenge.45   The
California Supreme Court reasoned that the cargo containers  were
not  being taxed while in transit [but r]ather they [were]  being
taxed  on  an apportioned basis for their continuous presence  in
the state.46  Like the containers in Japan Line, no single vessel
is  in the taxing situs of Valdez year-round, but as a group  the
tankers  form  a  continuous  presence  in  the   city.   As  the
California  Supreme Court noted, the presence  of  these  vessels
involves the constant use of many services provided by the (state
          and, here, the county); e.g., harbor facilities, roads, bridges,
water supply, as well as fire and police protection.47  Similarly,
the  Vermont  Supreme  Court upheld a personal  property  tax  on
vessels  in  Vermont, noting that [t]he tax  relates  to  police,
fire,  and  environmental protection afforded to  those  who  use
vessels  in  this  state.48  Polar does not deny  that  municipal
services  are  available  to  it  in  Valdez,  including  police,
airport, civic center, and medical services.  The vessel  tax  is
therefore  a  legitimate  property  tax  levied  to  support  the
services available to all taxpayers in the city, including Polar.
          Polar argues that the vessel tax is invalid because  it
is  a general revenue tax imposed only on specific vessels.   But
the  legitimacy of the vessel tax does not depend on whether  the
city  chooses  to  tax other personal property.   Alaska  Statute
29.45.050(b)(2)   provides   that   [a]   municipality   may   by
ordinance  .  .  .  classify as to type and exempt  or  partially
exempt  some  or all types of personal property from  ad  valorem
          Citing  Transportation Co. v. Wheeling,49 Polar  argues
that in order to be valid, the tax must be applied to the vessels
in  the  same  manner  as it is applied to  other  property.   It
reasons that because the vessel tax is the only personal property
tax  in effect in Valdez, the vessels are not being taxed in  the
same manner as other property.  We disagree.  Wheeling stands for
the  proposition that a charge based on the value of property  is
not a duty of tonnage.50  Valdez taxes the vessels value using the
same  mill  rate  it uses for all other property, including  real
property.51  It thus taxes the vessels in the same manner as other
property, because the tax is based on value.
          Polar  contends that the vessel tax is no more  than  a
charge for entering the Valdez port to access private facilities.
Polar  argues that the tax applies only to vessels that  call  at
the  three private docking facilities in Valdez, and that  it  is
therefore  .  .  . a charge for being in port and not  using  the
Citys  docking facilities.  (Emphasis in original.)  It  compares
the  tax  to one struck down by the California Supreme  Court  in
City of Oakland v. E.K. Wood Lumber Co.52  But E.K. Wood Lumber is
inapt.   The  fee there was a flat fee, not a tax  based  on  the
value  of  the  property.53  The fee was imposed on  all  vessels
landing  at  Oakland, regardless of whether they had  obtained  a
taxable  situs  there.54   E.K. Wood Lumber  therefore  does  not
persuade  us  that  the  citys  ad valorem  property  tax  is  an
unconstitutional duty of tonnage.
     D.   Other Issues
          The  city  asserts that the final judgment is defective
because  it  violates separation of powers and fails  to  sustain
Valdezs  vessel tax in accordance with the law.   The  city  also
contends  that  the ruling should have been modified  to  clarify
that  it  applies  only to Polar.  Because we are  reversing  the
judgment  below and remanding for entry of judgment for the  City
of Valdez, we do not need to address these arguments.
          Reversal  also makes it unnecessary to consider  Polars
argument concerning attorneys fees.  On remand the city  will  be
the prevailing party for purposes of Alaska Civil Rule 82.
          We  therefore REVERSE the judgment below and REMAND for
entry of judgment for the City of Valdez.

     1     Valdez  Ordinance 99-17 (codified as Valdez  Municipal
Code (VMC) 03.12.020(A) (1999)).

     2    Id.

     3    Valdez, Alaska, Resolution No. 00-15 (May 1, 2001).

     4    Id.

     5    Id.

     6    Id.

     7     Lewis  v. State, Dept of Corr., 139 P.3d 1266, 1268-69
(Alaska 2006).

     8     U.S. Const. amend. XIV  1; U.S. Const. art. I,  8, cl.

     9     In  its final judgment, the superior court stated that
the   port-day  apportionment  formula  is  contained  in  Valdez
Resolution  00-19.  This appears to be a typographical  error  as
the   port-day  apportionment  formula  is  contained  in  Valdez
Resolution 00-15.  We therefore refer to Valdez Resolution  00-15

     10     Atlantic  Richfield Co. v. State, 705 P.2d  418,  430
(Alaska 1985).

     11    Ott v. Mississippi Valley Barge Line Co., 336 U.S. 169,
174  (1949)  (holding  that ad valorem property  tax  apportioned
using miles traveled in state divided by total miles traveled did
not violate Commerce or Due Process Clauses).

     12     Complete  Auto Transit, Inc. v. Brady, 430  U.S.  274
(1977)   (upholding  sales  tax  challenged  by   motor   carrier
transporting cars into Mississippi from out of state).

     13    Id. at 279.

     14     Quill  Corp. v. North Dakota, 504 U.S. 298,  313  n.7

     15     See  Goldberg  v.  Sweet, 488 U.S.  252,  260  (1989)
(upholding  excise tax under Complete Auto test and stating  that
because  all parties agree that Illinois has a substantial  nexus
with the interstate telecommunications reached by the Tax Act, we
begin  our  inquiry with apportionment, the second prong  of  the
Complete Auto test).

     16    Id. at 260-61.

     17    Id. at 261.

     18     I  Jerome R. Hellerstein & Walter Hellerstein,  State
Taxation   4.15[2], at 4-142 (3d ed. 1998) (citing  Oklahoma  Tax
Commn v. Jefferson Lines, Inc., 514 U.S. 175, 185 (1995)).

     19    Id.

     20     Cent. R.R. of Pa. v. Pennsylvania, 370 U.S. 607,  614
(1962) (emphasis added).

     21     Kenai Peninsula Borough v. Arndt, 958 P.2d 1101, 1103
(Alaska 1998)  (emphasis added) (holding that Commerce Clause was
not violated because vessels tax status became fixed for full tax
year  on  date  of its assessment and it therefore could  not  be
taxed elsewhere, even after being sold).

     22    S. Pac. Co. v. Kentucky, 222 U.S. 63, 68-69 (1911); see
also Hellerstein & Hellerstein, supra note 18, at  4.12[2][c].

     23     Japan  Line, Ltd. v. County of Los Angeles, 441  U.S.
434, 442 (1979).

     24    Id. at 445-46.  Although it appears that some of Polars
vessels,  for some of the years at issue, might have  acquired  a
taxing  situs in a foreign nation, Polar does not argue that  the
international aspect of its commerce affects the Valdez tax.   We
recognize that Japan Line imposes an additional test for taxation
of  the instrumentalities of foreign commerce, id. at 446-49, but
we  do not reach that test because the parties did not raise this
issue on appeal.

     25    Polars claim of home port superiority is not compelled
by  the  cases  that Polar cites.  For example,  the  holding  in
Central  Railroad,  370 U.S. at 611-12, 614, that  a  domiciliary
situs cannot tax property to the extent that it could be taxed by
another  situs,  does not define the limits of a non-domiciliarys
right to tax.

     26      Polars   apportionment  argument   rests   on   this
characterization of the Valdez tax.  There is no risk of multiple
taxation   if   Valdez  uses  a  port-day   formula   and   other
jurisdictions use a port-day formula, voyage-day formula  (number
of  days  in  jurisdiction divided by total days in a  year),  or
voyage-distance  formula  (distance traveled  in  a  jurisdiction
divided  by  total distance).  A risk of multiple  taxation  only
exists  if  we  accept  Polars assertion that  its  domicile  can
extraterritorially tax its vessels for all time spent on the open

          Polar  provides no compelling reason for us  to  accept
this assertion.  Modern precedent and the repudiation of the home
port  doctrine  in Japan Line, 441 U.S. at 443,  suggest  that  a
domicile  possesses  no such expansive powers.   The  Japan  Line
Court announced that the special status traditionally accorded  a
domicile  can  claim no unequivocal constitutional  source.   Id.
Polars  view of a domiciles ability to assert an extraterritorial
tax conflicts with the tenor of Japan Line.

     27    Braniff Airways v. Nebraska State Bd. of Equalization &
Assessment, 347 U.S. 590, 593 & n.4, 597-98 (1954).  While  Polar
argues  that the Braniff Courts reasoning should not be  extended
to  ocean-going vessels, the Courts later decision in Japan  Line
largely  eliminated  the distinction between ocean-going  vessels
and  other instrumentalities of interstate commerce.  Japan Line,
441  U.S.  at  442.   It  is notable that the  Japan  Line  Court
specifically  cited Braniff in its discussion of  prior  opinions
whose  language distinguishing ocean-going vessels based  on  the
home  port doctrine the Court rejected. Id. (citing Braniff,  347
U.S. at 600).

     28    Braniff, 347 U.S. at 593 n.4.

     29    Goldberg, 488 U.S. at 260-61.
     30     A  variation on Braniff more dramatically illustrates
the  point: if an airline  domiciled in New York only has flights
between New York City and Los Angeles, the airline would  not  be
subject  to taxation by any jurisdiction other than New York  and
California.   The  Braniff apportionment  formula  of  number  of
landings  would  accord California and New York  even  powers  of
taxation.  Under the home port superiority method urged by Polar,
New York, the state of domicile, would have the ability to tax  a
plane for all times the plane was not in California.

     31    Ott v. Mississippi Valley Barge Line Co., 336 U.S. 169

     32    Id. at 171.

     33    Id. at 170.

     34     See  Goldberg, 488 U.S. at 261 ( [W]e have long  held
that  the Constitution imposes no single [apportionment]  formula
on  the  States,  and therefore have declined  to  undertake  the
essentially   legislative   task   of   establishing   a   single
constitutionally mandated method of taxation.  (quoting Container
Corp.  of  Am.  v.  Franchise Tax Bd., 463  U.S.  159,  164,  171

     35    See Cent. R.R., 370 U.S. at 614.

     36     Petersen  v. Mut. Life Ins. Co., 803  P.2d  406,  410
(Alaska  1990)  (Where a point is not given more than  a  cursory
statement in the argument portion of a brief, the point will  not
be  considered on appeal.); Lewis v. State, 469 P.2d 689,  691-92
(Alaska 1970).

     37     Moorman Mfg. Co. v. Bair, 437 U.S. 267, 274, 278 n.12
(1978)  (upholding Iowa apportionment formula for income  tax  on
interstate  business  against  Due Process  and  Commerce  Clause

     38    Id.

     39    U.S. Const. art. I,  10, cl. 3.

     40     Clyde  Mallory Lines v. Alabama ex rel.  State  Docks
Commn,  296 U.S. 261, 265-66 (1935) (holding fee exacted to  fund
regulation of harbor not unconstitutional duty of tonnage).

     41    U.S. Const. art. I,  10, cl. 3.

     42    Clyde Mallory Lines, 296 U.S. at 265-66.

     43     In  re  State Tonnage Tax Cases, 79 U.S. 204,  212-14
(1870)  (stating that vessels owned by individuals and  used  for
commercial purposes are considered property and are allowed to be
taxed by states and do not fall under Tonnage Clause); Bigelow v.
Dept  of  Taxes,  652 A.2d 985, 987-88 (Vt. 1994)  (holding  that
Vermonts tax was not tonnage tax because it taxed property  used,
not privilege of using Vermonts ports).

     44    VMC 03.12.020(A).

     45    Japan Line, Ltd. v. County of Los Angeles, 571 P.2d 254
(Cal.  1977),  revd on other grounds, 441 U.S. 434  (1979).   The
United  States  Supreme Court held that the tax,  as  applied  to
Japanese  shipping companies cargo containers  that  were  based,
registered, and subjected to property tax in Japan, and were used
exclusively  in  foreign commerce, violated the Commerce  Clause.
Japan  Line,  441  U.S. at 453-54.  The Court therefore  did  not
reach the Tonnage Clause question.  Id. at 439 n.3.

     46    Japan Line, 571 P.2d at 258.

     47    Id.

     48    Bigelow, 652 A.2d at 988.

     49     Transp.  Co. v. Wheeling, 99 U.S. 273, 283-84  (1878)
(noting that tax is only impermissible duty of tonnage when it is
taxed  as  instrument of commerce without reference to  value  of

     50    Id.

     51    VMC 03.12.022(A), .010, .060, .170.

     52     City of Oakland v. E.K. Wood Lumber Co., 292 P. 1076,
1080  (Cal. 1930) (holding that ordinance requiring every  vessel
to land at the citys wharves, or, upon paying the same charge, be
entitled to a permit to land at some other wharf in the city,  is
not  a charge, as to vessels so landing elsewhere, for facilities
or  services  furnished by the city and thus was unconstitutional
duty of tonnage).

     53    Id. at 1077-78.

     54    Id.

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