Cite as: 516 U. S. 325 (1996)
Opinion of the Court
commerce." Oregon Waste, 511 U. S., at 103. "Finally, the events on which the interstate and intrastate taxes are imposed must be 'substantially equivalent'; that is, they must be sufficiently similar in substance to serve as mutually exclusive 'prox[ies]' for each other." Ibid. (quoting Armco Inc. v. Hardesty, supra, at 643).
III
There is no doubt that the intangibles tax facially discriminates against interstate commerce. A regime that taxes stock only to the degree that its issuing corporation participates in interstate commerce favors domestic corporations over their foreign competitors in raising capital among North Carolina residents and tends, at least, to discourage domestic corporations from plying their trades in interstate commerce. The Secretary practically concedes as much, and relies instead on the compensatory tax defense.3 The only
3 Although the Secretary does suggest that the tax is so small in amount as to have no practical impact at all, we have never recognized a "de minimis" defense to a charge of discriminatory taxation under the Commerce Clause. See, e. g., Associated Industries of Mo. v. Lohman, 511 U. S. 641, 650 (1994) ("[A]ctual discrimination, wherever it is found, is impermissible, and the magnitude and scope of the discrimination have no bearing on the determinative question whether discrimination has occurred"); Maryland v. Louisiana, 451 U. S. 725, 760 (1981) ("We need not know how unequal the Tax is before concluding that it unconstitutionally discriminates"). We likewise reject the Secretary's speculation that the most likely effect, if any, of the taxable percentage deduction is to encourage out-of-state firms to compete in the North Carolina market so that their North Carolina shareholders may take advantage of the deduction. As we explain further, supra, at 330-331, such promotion of in-state markets at the expense of out-of-state ones furthers the "economic Balkanization" that our dormant Commerce Clause jurisprudence has long sought to prevent. Hughes v. Oklahoma, 441 U. S. 322, 325-326 (1979); see also Halliburton Oil Well Cementing Co. v. Reily, 373 U. S. 64, 72 (1963) (a State may not impose "a tax which is discriminatory in favor of the local merchant" so as to "encourag[e] an out-of-state operator to become a resident in order to compete on equal terms") (internal quotation marks and citation omitted).
333
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