Quill Corp. v. North Dakota, 504 U.S. 298, 13 (1992)

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Opinion of the Court

particular transaction because that application would "impos[e] a direct tax on interstate sales." Most recently, in Complete Auto Transit, Inc. v. Brady, 430 U. S., at 285, we renounced the Freeman approach as "attaching constitutional significance to a semantic difference." We expressly overruled one of Freeman's progeny, Spector Motor Service, Inc. v. O'Connor, 340 U. S. 602 (1951), which held that a tax on "the privilege of doing interstate business" was unconstitutional, while recognizing that a differently denominated tax with the same economic effect would not be unconstitutional. Spector, as we observed in Railway Express Agency, Inc. v. Virginia, 358 U. S. 434, 441 (1959), created a situation in which "magic words or labels" could "disable an otherwise constitutional levy." Complete Auto emphasized the importance of looking past "the formal language of the tax statute [to] its practical effect," 430 U. S., at 279, and set forth a four-part test that continues to govern the validity of state taxes under the Commerce Clause.5

Bellas Hess was decided in 1967, in the middle of this latest rally between formalism and pragmatism. Contrary to the suggestion of the North Dakota Supreme Court, this timing does not mean that Complete Auto rendered Bellas Hess "obsolete." Complete Auto rejected Freeman and Spector's formal distinction between "direct" and "indirect" taxes on interstate commerce because that formalism allowed the validity of statutes to hinge on "legal terminology," "drafts-manship and phraseology." 430 U. S., at 281. Bellas Hess

5 Under our current Commerce Clause jurisprudence, "with certain restrictions, interstate commerce may be required to pay its fair share of state taxes." D. H. Holmes Co. v. McNamara, 486 U. S. 24, 31 (1988); see also Commonwealth Edison Co. v. Montana, 453 U. S. 609, 623-624 (1981) ("It was not the purpose of the commerce clause to relieve those engaged in interstate commerce from their just share of [the] state tax burden even though it increases the cost of doing business") (internal quotation marks and citation omitted).

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