Cite as: 512 U. S. 186 (1994)
Opinion of the Court
if it may independently subsidize its farmers, it is free to finance the subsidy by means of any legitimate tax.
Even granting respondent's assertion that both components of the pricing order would be constitutional standing alone,15 the pricing order nevertheless must fall. A pure subsidy funded out of general revenue ordinarily imposes no burden on interstate commerce, but merely assists local business. The pricing order in this case, however, is funded principally from taxes on the sale of milk produced in other States.16 By so funding the subsidy, respondent not only assists local farmers, but burdens interstate commerce. The pricing order thus violates the cardinal principle that a State may not "benefit in-state economic interests by burdening out-of-state competitors." New Energy Co. of Ind. v. Lim-bach, 486 U. S., at 273-274; see also Bacchus Imports, Ltd. v. Dias, 468 U. S., at 272; Guy v. Baltimore, 100 U. S., at 443. More fundamentally, respondent errs in assuming that the
constitutionality of the pricing order follows logically from the constitutionality of its component parts. By conjoining
15 We have never squarely confronted the constitutionality of subsidies, and we need not do so now. We have, however, noted that "[d]irect subsidization of domestic industry does not ordinarily run afoul" of the negative Commerce Clause. New Energy Co. of Ind. v. Limbach, 486 U. S. 269, 278 (1988); see also Hughes v. Alexandria Scrap Corp., 426 U. S. 794, 815 (1976) (Stevens, J., concurring). In addition, it is undisputed that States may try to attract business by creating an environment conducive to economic activity, as by maintaining good roads, sound public education, or low taxes. Zobel v. Williams, 457 U. S. 55, 67 (1982) (Brennan, J., concurring); Bacchus Imports, Ltd. v. Dias, 468 U. S., at 271; Metropolitan Life Ins. Co. v. Ward, 470 U. S. 869, 876-878 (1985).
16 It is undisputed that an overwhelming majority of the milk sold in Massachusetts is produced elsewhere. Thus, even though the tax is applied evenhandedly to milk produced in State and out of State, most of the tax collected comes from taxes on milk from other States. In addition, the tax on in-state milk, unlike that imposed on out-of-state milk, does not impose any burden on in-state producers, because in-state dairy farmers can be confident that the taxes paid on their milk will be returned to them via the Dairy Equalization Fund.
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