Facts
- Florida imposed a tax on aviation fuel sold within the state, regardless of whether the fuel was used on intrastate, interstate, or international flights.
- Wardair Canada, Inc., a Canadian airline, operated international charter flights into and out of Florida and purchased fuel in Florida for use exclusively in foreign commerce.
- Wardair challenged the tax as applied to its fuel purchases, arguing that federal law and a U.S.–Canada bilateral aviation agreement established a federal policy exempting foreign airlines from fuel taxes and therefore barred state taxation.
- Wardair also argued that the tax interfered with the federal government’s ability to speak with one voice in foreign commerce, violating the dormant Foreign Commerce Clause.
- A Florida trial court enjoined application of the tax to Wardair based on federal policy derived from the bilateral agreement.
- The Florida Supreme Court reversed in part and upheld the tax against both the preemption and Foreign Commerce Clause challenges.
Issues
- Whether federal aviation law and federal policy in international aviation preempt Florida’s tax on aviation fuel sold to a foreign airline for use in foreign commerce.
- Whether the tax violates the dormant Foreign Commerce Clause by impairing the federal government’s ability to speak with one voice in foreign commerce.
Decision
- The Supreme Court affirmed the Florida Supreme Court (8–1).
- The Court held that the Federal Aviation Act does not occupy the field of international aviation and does not preempt Florida’s fuel tax.
- The Court held that Florida’s tax does not violate the dormant Foreign Commerce Clause because Wardair failed to show a federal policy of reciprocal fuel-tax exemptions that the state tax undermined, and federal action in the area did not reflect the type of federal silence that would bar state taxation.
Legal Principles
- Preemption turns on congressional intent; absent express preemption or actual conflict, a challenger must show evidence that Congress intended to preempt the specific field regulated by the state law.
- Federal aviation law’s regulatory breadth does not, by itself, establish field preemption of all state measures affecting international aviation, particularly where the federal scheme contemplates state taxation.
- Dormant Foreign Commerce Clause “one voice” objections require a demonstrated federal policy that the state measure compromises; general international aspirations or practices are insufficient.
- International agreements that bind the national government do not, without clear terms, prohibit state or local taxation.
Conclusion
Florida’s aviation fuel tax applied to a foreign airline’s fuel purchases for international flights was upheld because federal aviation law and the U.S.–Canada agreement did not preempt the tax, and the tax did not impermissibly interfere with the federal government’s foreign commerce power.