Xerox Corporation v. County of Harris, Texas

In the case of Xerox Corporation v. County of Harris, Texas, 459 U.S. 145, 103 S.Ct. 523 (1982), the application of the supremacy clause of the Constitution and its provisions, which affect the relationship between the federal and state governments, is the fundamental issue. Under the supremacy clause, when any state or local law or regulation directly conflicts with those of the federal government, the federal law will generally prevail. This federal preemption carries the implication that the state rule will be void to the extent of the inconsistency or conflict.

The following factors contributed to this suit: Copier parts, manufactured by Xerox Corporation, were being stored in a customs-bonded warehouse in Houston, Texas; Harris County and the City of Houston assessed a nondiscriminatory ad valorem personal property tax on the copiers; Xerox brought action against this tax in Texas Courts; the Texas courts upheld the tax; and Xerox appealed the decision to the U.S. Supreme Court. The Supreme Court reversed for Xerox. They ruled that the imposition of ad valorem property taxes on imported goods stored in a customs-bonded warehouse and designed for foreign markets was preempted by Congress' comprehensive regulation of international trade.

The Import-Export Clause has implications for this case, also. This clause prohibits the federal government from taxing exports and prohibits the states from taxing either imports or exports. It appears that Harris County a

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d for domestic resale. And lastly, we will assume that, although Xerox was storing the copy machine parts at the Houston port because they were forced to remove them from Panama, Xerox had used the Houston port before and was familiar with the procedures. Given these assumptions, and the facts presented in this case, three alternative courses of action are suggested. First, on discovering the ad valorem personal property tax, Xerox could have provided information to Port authorities establishing their non-taxable import-export status. Second, Xerox could have refused to pay the fees, contacted customs and advised them of the tax. Third, Xerox could move their shipment to another customs-bonded storage area that did not impose the tax. Each of these suggested alternative actions has advantages and disadvantages. During action that Xerox did follow, the disadvantages were the staff and legal costs as well as the time involved with the courts. The major advantage they gained, however, was a decision by the Supreme Court that reversed the Texas court's decision in their favor. The issue of the ad valorem tax is resolved. They also established this legal right for any other company using the Houston port in this manner.

Category: Government - X