SAVING THE STATES FROM THEMSELVES - COMMERCE CLAUSE CONSTRAINTS ON STATE-TAX INCENTIVES FOR BUSINESS

Presently, the states are engaged in intense interstate competition fo r economic activity by providing tax incentives businesses to locate i n-state. In this Article, Professor Enrich argues that these state loc ation incentives harm the slates and their citizens, and that the Comm erce Clause may Present the only possible realistic restraint on this ''second Civil War.'' Although the Supreme Court has long employed the dormant commerce clause to strike down state regulations that discrim inate against out-of-state economic actors, the clause has trot been w ed to curb the stales' attempts to influence business location decisio ns through the use of tax incentives. Professor Enrich asserts that th is dichotomy is not intrinsic to the clause itself but is attributable , in part, to the interests of the particular parties who have litigat ed Commerce Clause disputes. Upon examining the motives and judicial s tanding of the potential litigants, he concludes that the states thems elves ave viable candidates to bring constitutional challenges to stat e location incentives. Professor Enrich contends that the Supreme Cour t's Commerce Clause case law, which focuses extensively on discriminat ory aspects of state taxation, provides a solid basis for constitution al attacks upon many common forms of business tax breaks. He argues, h owever, that the Court must reframe its analysis of discriminatory sta te taxation in order to evaluate sensibly the full range of slate loca tion incentives. He proposes an antidistortion standard, which would j udge whether a state tax incentive violates the Commerce Clause by ass essing whether that incentive distorts economic decisionmaking concern ing the location of business activity. By refocusing its jurisprudence , the Court can end the harmful consequences of state competition for businesses and reassert the primacy of the Commerce Clause as a protec tor of a robust national economy and a healthy federalism.