William J. Brennan, Jr.

“ The Court agreed that the franchise tax was unconstitutional and concluded that the railroad company was entitled to a refund of the portion of the tax imposed on out-of-state activity. Justice Holmes explained:
"It is reasonable that a man who denies the legality of a tax should have a clear and certain remedy. The rule being established that apart from special circumstances he cannot interfere by injunction with the State's collection of its revenues, an action at law to recover back what he has paid is the alternative left. ”

“ Just as a State may not object to an otherwise available remedy providing for the return of real property unlawfully taken or criminal fines unlawfully imposed simply because it finds the property or moneys useful, so also Florida cannot object to a refund here just because it has other ideas about how to spend the funds.↑ The State is free, of course, to provide broader relief as a matter of state law than is required by the Federal Constitution. ”

“ Allowing taxpayers to litigate their tax liabilities prior to payment might threaten a government's financial security, both by creating unpredictable interim revenue shortfalls against which the State cannot easily prepare, and by making the ultimate collection of validly imposed taxes more difficult. ”

“ To whatever extent petitioner succeeded in passing on the economic incidence of the tax through higher prices to its customers, it most likely lost sales to the favored distributors or else incurred other costs (e.g., for advertising) in an effort to maintain its market share. [32] The State cannot persuasively claim that "equity" entitles it to retain tax moneys taken unlawfully from petitioner due to its pass-on of the tax where the pass-on itself furthers the very competitive disadvantage constituting the Commerce Clause violation that rendered the deprivation unlawful in the first place. ”

“ Had the Florida courts declared the Liquor Tax invalid either because (other than its discriminatory nature) it was beyond the State's power to impose, as was the unapportioned tax in O'Connor, or because the taxpayers were absolutely immune from the tax, as were the Indian Tribes in Ward and Carpenter, no corrective action by the State could cure the invalidity of the tax during the contested tax period. ”

“ To protect government's exceedingly strong interest in financial stability in this context, we have long held that a State may employ various financial sanctions and summary remedies, such as distress sales, in order to encourage taxpayers to make timely payments prior to resolution of any dispute over the validity of the tax assessment. ”

“ We observed that if the taxpayer "has shifted the [economic] burden [of the tax] to the purchasers, they and not he have been the actual sufferers and are the real parties in interest," id., at 402, 54 S.Ct., at 449, and he ought not receive a windfall for their injury.
But petitioner does not challenge here a tax assessment that merely exceeded the amount authorized by statute; petitioner's complaint was that the Florida tax scheme unconstitutionally discriminated against interstate commerce. ”

“ If so, however, petitioner still would have suffered a comparative economic injury because the tax pass-on would have enabled the favored distributors alone to derive an increase in total revenue from the discriminatory tax.↑ It is conceivable that a particular distributor's economic injury may be quite severe, for example, if the tax drives it out of the market entirely (though a rational disfavored distributor would not allow itself to incur any greater economic injury through a pass-on than it would have incurred had it simply shouldered the entire burden of the tax deprivation itself) . ”

“ The deprivation worked by the Liquor Tax violated the Commerce Clause because the tax scheme's purpose and effect was to impose a relative disadvantage on a category of distributors (those dealing with nonpreferred products) largely composed of out-of-state companies, not because its treatment of this category of distributors diverged from some fixed substantive norm. [25] Hence, the salient feature of the position petitioner "should have occupied" absent any Commerce Clause violation is its equivalence to the position actually occupied by petitioner's favored competitors. ”

“ The State may, of course, choose to erase the property deprivation itself by providing petitioner with a full refund of its tax payments. But as both Montana National Bank and Bennett illustrate, a State found to have imposed an impermissibly discriminatory tax retains flexibility in responding to this determination. Florida may reformulate and enforce the Liquor Tax during the contested tax period in any way that treats petitioner and its competitors in a manner consistent with the dictates of the Commerce Clause. ”

“ Montana National Bank thus held that one forced to pay a discriminatorily high tax in violation of federal law is entitled, in addition to prospective relief, to a refund of the excess tax paid-at least unless the disparity is removed in some other manner. ”

“ It is upon taxation that the several States chiefly rely to obtain the means to carry on their respective governments, and it is of the utmost importance to all of them that the modes adopted to enforce the taxes levied should be interfered with as little as possible. ”

“ The court held that under these unique circumstances the distributor lacked standing to seek a refund, explaining that " [o] ne who does not himself bear the financial burden of a wrongfully extracted tax suffers no loss or injury, and accordingly, would not have standing to demand a refund." Ibid. The court in Szabo did not mention, let alone rely on, a state-law immunity bar to the refund action.↑ We reject respondents' intimation that the cost of any refund considered by the State might justify a decision to withhold it. ”

“ We have already noted that States have a legitimate interest in sound fiscal planning and that this interest is sufficiently weighty to allow States to withhold predeprivation relief for allegedly unlawful tax assessments, providing postdeprivation relief only. ”

“ Manufacturers may not sell directly to retail dealers, and distributors therefore serve as necessary intermediaries. The State places the legal incidence of the excise taxes on distributors, who must remit the taxes monthly. Distributors may choose to sell beverage products receiving the tax preferences, nonpreferred products, or both. ”

“ The rate varies directly with the total volume of such products sold by all distributors during the preceding month. If the volume of preferred products sold within any category is low, the tax rate is very favorable compared to the generally applicable rate for nonpreferred products. Conversely, at a relatively high volume of sales, the tax rate for preferred products equals the nonpreferred rate.↑ Florida law divides traffic in alcoholic beverages into three tiers: (1) manufacture or importation ”

“ The State would have had no choice but to "undo" the unlawful deprivation by refunding the tax previously paid under duress, because allowing the State to "collect these unlawful taxes by coercive means and not incur any obligation to pay them back . . . would be in contravention of the Fourteenth Amendment." Ward, 253 U.S., at 24, 40 S.Ct., at 422 ”

“ Florida's alcoholic beverage tax scheme clearly raises the relative cost of doing business for a manufacturer or distributor of alcoholic beverages which are not made from base crops which are 'adapted to growing in Florida.' " 524 So.2d 1000, 1008 (1988) .↑ Brief for Respondents on Rearg. 15.↑ Respondents also assert that no refund is appropriate because petitioner most likely would pay the same amount of tax even if the preferred sliding scale tax schedules were retroactively extended to petitioner. ”

“ General Oil Co. v. Crain, 209 U.S. 211, 233, 28 S.Ct. 475, 483, 52 L.Ed. 754 (1908) (Harlan, J., concurring) ; see also Charles River Bridge v. Warren Bridge, 11 Pet. 420, 585, 9 L.Ed. 773 (1837) (Story, J., dissenting) . Our consistent practice since Cohens confirms this broader understanding. ”