Craft & Sheppard's Supreme Court Review
Commerce Clause
States and their political subdivisions have long-issued bonds for public purposes. They often exempt interest earned on their own bonds from their state income taxes, but impose them on bond interest from other states. Under a dormant Commerce Clause analysis, the Court has struck state laws that discriminate against out-of-state producers. Kentucky exempted interest earned on publicly issued, in-state bonds, but taxed interest on out-of-state bonds. In Dep't of Revenue v. Davis the Court determined that Kentucky’s differential tax scheme served legitimate public purposes and did not violate the dormant Commerce Clause.
