Case: Polar Tankers v. City of Valdez, Alaska

Date: Wednesday, April 1, 2009

Issue: Can a city target a property tax that falls almost exclusively on oil tankers that anchor in its harbor?

Background: City officials in Valdez, Alaska instituted a tax targeting the oil tankers that fill its harbor. Valdez is the end of the Trans Alaska Pipeline and is the northernmost ice free port in North America. The ordinance uses a complicated formula to determine the assessment for each vessel. Not surprisingly, ship-owners objected to the tax and sued. The case is now before the Supreme Court. The tanker owners claim the tax is a violation of the Constitution's Tonnage Clause that prohibits states from imposing duties on ships unless otherwise allowed by Congress. The city maintains that the lower court’s analysis was correct in concluding the Tonnage Clause does not apply to property taxes.