Arizona Pub. Serv. Co. v. Snead
In Arizona Pub. Serv. Co. v. Snead, 441 U.S. 141, 99 S.Ct. 1629, 60 L.Ed.2d 106 (1979), the Supreme Court dealt with the issue of whether a New Mexico state tax on electricity, which in effect applied only to electricity generated in New Mexico and sold out of state, violated a federal statute prohibiting taxes on electricity that were discriminatory against out-of-state consumers. Snead, 441 U.S. at 143-47, 99 S.Ct. at 1631-33.
The federal statute defined a discriminatory tax as one that "results, either directly or indirectly, in a greater tax burden on electricity which is generated and transmitted in interstate commerce than on electricity which is generated and transmitted in intrastate commerce." Id. at 146, 99 S.Ct. at 1632.
The state argued that an examination of New Mexico's entire tax structure was required to determine whether or not the electricity tax violated the federal statute. Id. at 149, 99 S.Ct. at 1633.
The Supreme Court rejected this argument, saying the federal statutory provision is directed specifically at a state tax "on or with respect to the generation or transmission of electricity," not to the entire tax structure of the State. The tax imposed by New Mexico ... is concededly a tax on the generation of electricity.... To look narrowly to the type of tax the federal statute names, rather than to consider the entire tax structure of the State, is to be faithful not only to the language of that statute but also to the expressed intent of Congress in enacting it. Because the ... tax itself indirectly but necessarily discriminates against electricity sold outside New Mexico, it violates that federal statute. Id. at 149-50, 99 S.Ct. at 1634.