About Complete Auto Transit v. Brady

The Complete Auto Transit vs Brady case was a dispute over sales taxes that the Mississippi State Tax Commission imposed on all in-state and out-of-state transportation carriers. Complete Auto Transit transported the cars to Mississippi August 1, 1968 to July 31, 1972. The 1977 case would have a bearing on all future transportation taxes forever.

The Plaintiff and Defendant

The Plaintiff was Complete Auto Transit, a Michigan company that transported vehicles for General Motors Corporation. General Motors built the vehicles and transported them by train to other states, including Mississippi, a state that taxed all transportation businesses "just for doing business." The Defendant, Brady, was Mississippi Tax Commissioner, Charles R. Brady. This Supreme Court case started January 19, 1977.  

The Reason for This Case

Mississippi taxed transportation businesses in its state. Complete Auto Transit disagreed with Mississippi's tax and went to court about it. Mississippi said that it was just a sales tax. Many, including Complete Auto Transit, said that Mississippi was taxing them just to have the privilege to do business in Mississippi. The Supreme Court decided that companies that did business in more than one state have the responsibility to pay its share of each state's tax burden. The case was decided on March 7, 1977.

New Commerce Laws

This case caused the creation of more interstate commerce tax rules. For one, a state is prohibited from taxing a company that does business in another state. Tax discrimination against anyone or any company is forbidden. The companies would still get services such as police protection for paying its taxes