American Trucking Associations, Inc. v. Smith

PETITIONER: American Trucking Associations, Inc.
RESPONDENT: Smith
LOCATION: Sable Communications of California

DOCKET NO.: 88-325
DECIDED BY: Rehnquist Court (1988-1990)
LOWER COURT: Arkansas Supreme Court

CITATION: 496 US 167 (1990)
ARGUED: Mar 22, 1989
REARGUED: Dec 06, 1989
DECIDED: Jun 04, 1990

ADVOCATES:
Mr. Andrew L. Frey - Reargued the cause for the petitioners
A. Raymond Randolph Jr. - Reargued the cause for the respondents

Facts of the case

In 1983, the American Trucking Associations, Inc. (ATA) challenged the flat tax portion of Arkansas' Highway Use Equalization (HUE) tax, alleging that it violated the Commerce Clause. The Arkansas Supreme Court, relying on Supreme Court precedent, rejected this claim. Subsequently, on June 23, 1987, the Supreme Court decided American Trucking Ass'ns., Inc. v. Scheiner, 483 U.S. 266 (1987), which held that state application of flat highway use taxes was unconstitutional. Pending re-hearing in the Arkansas Supreme Court, Justice Blackmun ordered, in August 1987, that all new taxes collected be kept in escrow. Subsequently, the Arkansas Supreme Court held that HUE was unconstitutional, but that Scheiner did not apply retroactively. The court went on to decide that taxes already collected for the tax year beginning July 1, 1987, could remain in the state treasury, but that those funds placed in the escrow account ordered by Justice Blackmun should be refunded, as they had not been spent or budgeted for future spending.

Question

(1) Does the Court's decision in Scheiner apply retroactively? (2) Even if the Scheiner decision does not apply retroactively, can the state keep taxes collected before the escrow account was established when those taxes are for the tax year July 1, 1987 to June 30, 1988, a period after Scheiner?

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