Aloha Airlines, Inc. v. Director of Taxation of Hawaii
In Aloha Airlines, Inc. v. Director of Taxation of Hawaii , 464 U.S. 7 (1983), the Supreme Court considered whether the Anti-Head Tax Act (AHTA) preempted a Hawaii public service company tax, which provided:
"There shall be levied and assessed upon each airline a tax of four per cent of its gross income each year from the airline business." Id. at 10 (quoting Haw. Rev. Stat. 239-6 (1976)).
However, Hawaii, rather than describing this tax as a tax on gross receipts, which would be plainly prohibited by 1513(a), claimed that it was merely a "means of taxing the personal property of the airline," id. (quoting Haw. Rev. Stat. 239-6 (1976)), and thus fell within the saving clause provided by 1513(b).
The Supreme Court, however, reversed the Hawaii Supreme Court's decision upholding the statute, finding that the Hawaii court had failed to give effect to the "plain meaning" of 1513(a)'s preemption of taxes on gross receipts. Aloha Airlines, 464 U.S. at 12.
The Court was "unpersuaded by Hawaii's contention that, because the Hawaii legislature styled 239-6 as a property tax measured by gross receipts rather than as a straight-forward gross receipts tax, the provision should escape preemption under 1513(b)'s exemption for property taxes."
Rejecting this proposition, the Court categorically held: "The manner in which the state legislature has described and categorized 239-6 cannot mask the fact that the purpose and effect of the provision is to impose a levy upon the gross receipts of airlines." Aloha Airlines, 464 U.S. at 13-14.
In Aloha Airlines v. Director of Taxation, 464 U.S. 7, 104 S.Ct. 291, 78 L.Ed.2d 10 (1983), the Supreme Court held that a state tax, denominated as a property tax on airlines measured by their gross receipts, was in reality a tax on the gross receipts of airlines selling air transportation and carrying persons traveling in air commerce. See 464 U.S. at 13-14, 104 S.Ct. at 294-95.
The Court held that Sec. 1513(a) preempted such a tax. See id. at 14, 104 S.Ct. at 295