Cite as: 517 U. S. 843 (1996)
Opinion of the Court
Jeffrey P. Minear argued the cause for the United States. On the briefs were Solicitor General Days, Assistant Attorney General Argrett, Deputy Solicitor General Wallace, Kent L. Jones, Gary R. Allen, and Ernest J. Brown.
James R. Atwood argued the cause for respondent. With him on the brief was Andrew W. Singer.
Justice Thomas delivered the opinion of the Court. We resolve in this case whether the Export Clause of the Constitution permits the imposition of a generally applicable, nondiscriminatory federal tax on goods in export transit. We hold that it does not.
I
Section 4371 of the Internal Revenue Code imposes a tax on insurance premiums paid to foreign insurers that are not subject to the federal income tax.1 26 U. S. C. § 4371 (1982 ed.). International Business Machines Corporation (IBM) ships products that it manufactures in the United States to numerous foreign subsidiaries and insures those shipments against loss. When the foreign subsidiary makes the shipping arrangements, the subsidiary often places the insurance with a foreign carrier. When it does, both IBM and the subsidiary are listed as beneficiaries in the policy.
IBM filed federal excise tax returns for the years 1975 through 1984, but reported no liability under § 4371. The Internal Revenue Service (IRS) audited IBM and determined that the premiums paid to foreign insurers were taxable under § 4371 and that IBM—as a named beneficiary of the insurance policies—was liable for the tax. The IRS assessed a tax against IBM for each of those years.
IBM paid the assessments and filed refund claims, which the IRS denied. IBM then commenced suit in the Court of
1 The tax does not apply if a policy issued by a foreign insurer is "signed or countersigned by an officer or agent of the insurer in a State, or in the District of Columbia, within which such insurer is authorized to do business." 26 U. S. C. § 4373(1) (1982 ed.).
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