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					SIDLEY AUSTIN BROWN & WOOD                                 LLP                       WASHINGTON, D.C.


                                           M E M O R A N D U M


TO:                 Todd M. Malan
                    Executive Director
                    Organization for International Investment (OFII)
FROM:               Daniel M. Price
                    Marinn F. Carlson
                    Daniel Bahar
RE:                 Constitutionality of Md. Code Ann. § 10-306.1
DATE:               September 10, 2004


             PRIVILEGED ATTORNEY-CLIENT COMMUNICATION
    ATTORNEY WORK PRODUCT (PREPARED IN ANTICIPATION OF LITIGATION)

        You have asked for a preliminary analysis as to whether Md. Code Ann. § 10-306.1 is
vulnerable to constitutional challenge because of its apparent discrimination against companies
engaging in foreign commerce. You have also asked whether such constitutional challenges to
state tax measures could be filed in federal court, and whether OFII has standing to challenge the
Maryland law on behalf of its members.

        Based on our preliminary analysis, Md. Code Ann. § 10-306.1 is vulnerable and could be
opposed on at least three grounds under the U.S. Constitution’s Foreign Commerce Clause.1 The
strongest and simplest claim would allege that the law impermissibly discriminates against
foreign commerce by penalizing taxpayers that engage in certain transactions with related
entities operating outside the United States. The law may also be challenged because it results in
multiple taxation and impairs the federal government’s ability to “speak with one voice” in
matters of foreign commerce. The latter claim would require evidence of an existing federal
policy against discrimination by the states regarding deductions from taxable income for
royalties and other expenses. Preliminary analysis indicates that such a policy exists and is
articulated in the United States Model Income Tax Convention and many U.S. bilateral tax
treaties (consistent with our earlier discussions).

       Because the Foreign Commerce Clause arguments are both straightforward and
compelling, we have not, in this preliminary memorandum, separately analyzed the related
question of whether Md. Code Ann. § 10-306.1 may also be invalid under either American
Insurance Association v. Garamendi2 or Crosby v. National Foreign Trade Council3 on the
1
    U.S. Const. art. I, § 8, cl. 3 (“The Congress shall have Power ... To regulate Commerce with foreign Nations”).
2
 539 U.S. 396 (2003) (finding that a provision of California’s Holocaust Victim Insurance Relief Act was
preempted by a federal foreign policy favoring voluntary agreements over litigation as the primary means for
settling outstanding Holocaust-era insurance claims).
3
 530 U.S. 363 (2000) (finding that a Massachusetts law barring state procurement from companies doing business
with Burma was preempted by federal statute imposing sanctions on Burma).
SIDLEY AUSTIN BROWN & WOOD                              LLP                      WASHINGTON, D.C.

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grounds that it is directly preempted by federal foreign policy and/or tax treaties currently in
force. We note, however, that the analysis of such claims would largely parallel the “speak with
one voice” analysis under the Foreign Commerce Clause. The evidence of a federal foreign
policy against state tax discrimination regarding royalty and other deductions, discussed below,
would thus suggest that a preemption claim is also viable.

        Below we also conclude that the Tax Injunction Act requires that a non-federal actor such
as OFII seeking either an injunction or a declaratory judgment that a state tax law is
unconstitutional must bring such a challenge in state court. In addition, we consider OFII’s
standing and conclude that—presuming the interests of one or more OFII members in fact are
affected by the Maryland law—OFII should have standing to challenge the law on behalf of its
members.

        This memorandum has four parts. Section I summarizes key provisions of Md. Code
Ann. § 10-306.1. Section II provides a preliminary analysis of whether the law violates the
Foreign Commerce Clause. Sections III and IV examine the procedural issues relating to the Tax
Injunction Act and OFII’s standing.

I. BACKGROUND: MD. CODE ANN. § 10-306.1

        Md. Code Ann. § 10-306.1 provides for the addition to federal taxable income (in order
to determine Maryland modified income) of “any otherwise deductible interest expense or
intangible expense” if such expense results “directly or indirectly” from “one or more direct or
indirect transactions with[] one or more related members.”4 “Intangible expenses” include, inter
alia, “an expense ... for ... intangible property, to the extent the expense ... is allowed as a
deduction or cost in determining taxable income” and “a royalty, patent, technical, or copyright
fee.”5 “Related members” include, inter alia, individuals or entities owning 50% or more of the
value of the taxpayer’s outstanding stock and “component members” of the taxpayer as this term
is defined under 26 U.S.C. § 1563(b).6 In brief, the required addition prevents a Maryland
taxpayer from avoiding taxes by taking a deduction for an interest or intangible expense paid to a
related member that will not itself pay taxes on the payment received.

        However, the required addition to taxable income does not apply where (i) the transaction
giving rise to the interest or intangible expense “did not have as a principal purpose the
avoidance of [Maryland taxes],” (ii) the transaction was made at arm’s-length, and (iii) the
transaction fits into one of three alternative scenarios.7 Among these alternatives, the addition
does not apply where Maryland or another “state or possession of the United States” has already


4
    Md. Code Ann. § 10-306.1(b).
5
  Md. Code Ann. § 10-306.1(a)(5). “Intangible property” means “patents, patent applications, trade names,
trademarks, service marks, copyrights, and similar types of intangible assets.” Md. Code Ann. § 10-306.1(a)(6).
6
    Md. Code Ann. § 10-306.1(a)(8)-(9).
7
    Md. Code Ann. § 10-306.1(c).



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SIDLEY AUSTIN BROWN & WOOD                                LLP                       WASHINGTON, D.C.

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taxed the income received by the related member from the Maryland taxpayer taking the
deduction.8 This scenario will be found to exist, subject to certain exceptions, if:

                the related member was subject to tax by net income in Maryland “or another state or
                 possession of the United States,”

                “a measure of the tax imposed” by Maryland “or another state or possession of the
                 United States included the interest expense or intangible expense received by the
                 related member,” and

                “the aggregate effective tax rate imposed on the amounts received by the related
                 member is equal to or greater than 4%.”9

         The law also provides that the required addition to taxable income does not apply “if, in
lieu of the 4% effective tax rate requirement ... the aggregate effective tax rate imposed on the
amounts received is greater than or equal to the aggregate effective tax rate that would have been
imposed on the additional income of the payor corporation if the interest expense or intangible
expense had not been deducted.”10

         In layman’s terms, the Maryland law thus exempts a Maryland taxpayer from adding
back interest and royalty payments to its taxable income if the related company receiving the
otherwise deductible payment from the Maryland taxpayer is subject to a tax on said income
generally equal to or greater than 4%, in Maryland or another U.S. state or possession. The
exemption is not available, however, if the payment is made to a related company that pays taxes
on it in a foreign country. Critically, the law therefore appears, on its face, to provide better
treatment for Maryland taxpayers engaging in transactions with related companies taxed in the
United States than with those taxed abroad.

II. FOREIGN COMMERCE CLAUSE ANALYSIS

       The U.S. Constitution provides that “Congress shall have Power ... To regulate
Commerce with foreign Nations.”11 Where Congress has been silent and thus not expressly
preempted state action in this area, the Supreme Court still “has allowed only such action as it
has deemed consistent with the nationalizing policies perceived to underlie the congressional
power delegated in the Commerce Clause itself.”12 The Court may strike down state laws
8
    Md. Code Ann. § 10-306.1(c)(3)(ii).
9
    Id. Under Md. Code Ann. § 10-306(a)(2), “aggregate effective tax rate” means:
[T]the sum of all effective rates of tax imposed by all states, including [Maryland] and other states or possessions of
the United States, where a related member receiving a payment of interest expense or intangible expense is subject
to tax and where the measure of the tax imposed included the payment.
10
     Md. Code Ann. § 10-306.1(d)(1).
11
     U.S. Const. art. I, § 8, cl. 3.
12
     1 Laurence H. Tribe, American Constitutional Law 1151-2 (3d ed. 2000).



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SIDLEY AUSTIN BROWN & WOOD                               LLP                     WASHINGTON, D.C.

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affecting foreign commerce unless they satisfy a four-part test set forth in Complete Auto
Transit, Inc. v. Brady.13 Under Complete Auto Transit, a state tax on interstate commerce is
permissible only if it “(1) applies to an activity having a substantial nexus with the taxing state,
(2) is fairly apportioned, (3) does not discriminate against interstate commerce, and (4) is fairly
related to services provided by the state.”14 A state tax on foreign commerce must also meet two
additional requirements. First, the tax must not “enhance the risk of multiple taxation by foreign
sovereigns.”15 Second, the tax must not “impair federal uniformity in this sensitive area so
intimately connected with foreign relations.”16

        Strong arguments can be made that the Maryland law violates the Foreign Commerce
Clause because it (i) discriminates against foreign commerce, (ii) enhances the risk of multiple
taxation, and (iii) impairs federal uniformity. We consider each claim separately below (though
aspects of the claims are mutually reinforcing).

            A. Discrimination against foreign commerce

          The strongest and simplest claim against Md. Code Ann. § 10-306.1 would allege
unlawful discrimination against foreign commerce. In Kraft General Foods, Inc. v. Iowa Dept.
of Revenue and Finance, the Supreme Court struck down an Iowa tax on dividends received by
an entity paying taxes in Iowa from its foreign subsidiaries.17 The law treated foreign commerce
less favorably than domestic commerce, since Iowa taxpayers were permitted to take a deduction
for dividends received from domestic subsidiaries.18 The Court found that the Iowa law’s
disparate treatment of foreign commerce was “indisputable.”19 Such discrimination violated the
Foreign Commerce Clause since “[a]bsent a compelling justification ... a State may not advance
its legitimate goals by means that facially discriminate against foreign commerce.”20 The state’s
administrative justifications for the law (based on efficiency advantages realized by having state
tax forms and procedures “replicate federal practice”21) were not sufficient to demonstrate that
the “State’s goals cannot be adequately served by reasonable nondiscriminatory alternatives.”22

     Kraft provides solid ground to argue that Md. Code Ann. § 10-306.1 violates the Foreign
Commerce Clause. The Maryland law facially discriminates against foreign commerce,

13
     See 430 U.S. 274 (1977); 1 Laurence H. Tribe, American Constitutional Law 1154 (3d ed. 2000).
14
     Id. at 1106.
15
     Id. at 1156.
16
     Id.
17
     505 U.S. 71 (1992).
18
     Id. at 74.
19
     Id. at 75.
20
     Id. at 81.
21
     Id.
22
     Id. (internal quotations omitted).



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SIDLEY AUSTIN BROWN & WOOD                                LLP                     WASHINGTON, D.C.

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penalizing state taxpayers that engage in certain transactions with related entities when the
relevant portion of these entities’ income is taxed abroad rather than in the United States. It
seems difficult for Maryland to offer a “compelling justification” for such discrimination,
particularly since the Court appears unwilling to accept justifications founded on administrative
exigency. Most commonly, “serious health and safety concern[s]” are needed to show a
compelling justification.23 No such concerns appear to underlie the Maryland tax law. As in
Kraft, it will also be more difficult for Maryland to justify its discriminatory law because other
states have successfully addressed the same regulatory problem without discrimination.24

            B. Risk of multiple taxation

         Md. Code Ann. § 10-306.1 arguably also violates the Foreign Commerce Clause because
it yields multiple taxation of the same income. The Supreme Court seemed to articulate a bright-
line rule against multiple taxation of foreign commerce in Japan Line, Ltd. v. County of Los
Angeles.25 It has since indicated that a law will not always be invalidated because it results in
multiple taxation, particularly in the absence of reasonable alternatives.26 The Maryland law still
seems vulnerable to such a challenge, however, because it almost inevitably results in multiple
taxation and a reasonable alternative exists that would not place this burden on foreign
commerce.

        In Japan Line, the Court held invalid a California ad valorem property tax on Japanese-
owned shipping containers that passed through California’s ports, inter alia, because the tax
resulted in double taxation.27 Because the shipping containers were “domiciled abroad,” the
Court observed that the home country had “the right, consistently with the custom of nations, to
impose a tax on [the containers’] full value.”28 The imposition of an additional tax on these
containers—even apportioned to account only for the limited period in which the containers were
present in the state—would “inevitably” result in double taxation.29 The Court thus found
California’s property tax in violation of the Foreign Commerce Clause.

        Yet after Japan Line, the Court then declined to strike down several state laws that
resulted in multiple taxation, limiting Japan Line’s potentially broad reach. In Container Corp.,
the Court upheld California’s “unitary business”/“formula apportionment” method of calculating
a corporation’s taxable income.30 Taxpayers had challenged this method, inter alia, on the

23
     Id. at 81-2.
24
     See id. at 81.
25
     441 U.S. 434 (1979).
26
  See Container Corp. of America v. Franchise Tax Board, 463 U.S. 159 (1983); Barclays Bank PLC v. Franchise
Tax Board of California, 512 U.S. 298 (1994).
27
     Japan Line, 441 U.S. at 452.
28
     Id. at 447.
29
     Id.
30
     463 U.S. at 193. The unitary business/formula apportionment method calculates taxable corporate income in two


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SIDLEY AUSTIN BROWN & WOOD                                 LLP                       WASHINGTON, D.C.

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ground that its application resulted in double taxation of entities subject in other jurisdictions to
the more accepted “separate accounting”/“arm’s length” calculation of taxable income.31 The
Court found that, while application of the unitary business method would sometimes result in
double taxation, it did not violate the Foreign Commerce Clause. According to the Court, the
scrutiny accorded to measures yielding double taxation “must take into account the context in
which the double taxation takes place and the alternatives reasonably available to the taxing
State.”32 The Court observed, first, that the unitary business method did not “inevitably” lead to
double taxation.33 Second, adoption by California of the separate accounting method would not
eliminate the possibility of double taxation.34 Thus, “[a]lthough double taxation is ...
constitutionally disfavored ... particularly in the international context,” the unitary business
method was not prohibited.35 The Court subsequently affirmed this ruling in Barclays Bank.

         A strong argument exists that Md. Code Ann. § 10-306.1 is invalid under the standard
articulated in Japan Line, even as tempered by Container Corp., and Barclays Bank. Like the
tax at issue in Japan Line, Maryland’s tax law almost inevitably results in double taxation. To
prevent tax avoidance, the Maryland law provides for the addition to a Maryland taxpayer’s
taxable income of otherwise deductible interest and intangible expenses when such expenses are
incurred in transactions with related business entities. The law does not exempt Maryland
taxpayers from the required addition when a related business entity in a foreign country has paid
taxes upon payment of the interest or intangible expense by the Maryland taxpayer. The law
thus inevitably results in double taxation of the payment (presuming that such payment is subject
to tax in the foreign jurisdiction in which the related entity operates).

        The existence of reasonable alternatives that would prevent double taxation similarly
supports invalidation of the law on multiple taxation grounds. Indeed, Maryland has already
adopted a reasonable alternative for taxpayers seeking deductions for expenses paid in similar
transactions with related entities in the United States. A reasonable alternative for foreign-

steps. First, it “defin[es] the scope of the ‘unitary business’ of which the taxed enterprise’s activities in the taxing
jurisdiction form one part.” Id. at 165. Second, it “apportion[s] the total income of that unitary business between
the taxing jurisdiction and the rest of the world” based on a formula designed to approximate the scope of corporate
activities in the jurisdiction. Id.
31
   Id. at 184-5. The “separate accounting” or “arm’s length” method calculates taxable corporate income in general
by treating each corporate entity “as if it were an independent entity dealing at arm’s length with its affiliated
corporations.” Id. at 185. The result is that each separate entity is subject to tax “only for the income it realizes on
its own books” in the jurisdictions where it operates. Id.
32
     Id. at 189.
33
  Id. at 188 (“Whether the combination of the two methods (i.e., taxing of a corporation in some jurisdictions under
the unitary business approach and, in others, under the separate accounting approach) results in the same income
being taxed twice or in some portion of income not being taxed at all is dependent solely on the facts of the
individual case”).
34
  Id. at 191 (Corporations subject to taxation in multiple jurisdictions that apply “separate accounting” method to
determine taxable income might still be subject to double taxation due to differences in “precise rules” for
reallocation of income among related corporate entities).
35
     Id. at 193.



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SIDLEY AUSTIN BROWN & WOOD                                  LLP                  WASHINGTON, D.C.

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related companies would also exempt taxpayers from the required addition to taxable income,
upon demonstration that related entities in foreign countries are subject to tax on the payments.
Other states currently provide such exemptions. For example, Massachusetts exempts from its
own “add back” statute royalty and related interest payments to a related company resident in
any country “which has in force a comprehensive income tax treaty with the United States.”36

            C. Federal government’s ability to “speak with one voice”

         Md. Code Ann. § 10-306.1 is also vulnerable to challenge under the Foreign Commerce
Clause because it arguably impairs the federal government’s ability to “speak with one voice” in
matters of foreign commerce. In Japan Line, the Court found that California’s tax on Japanese
shipping containers in international commerce prevented the United States from “speaking with
one voice in regulating foreign trade.”37 The Court observed that the United States and Japan
had both signed the Customs Convention on Containers.38 The United States’ signing of the
Convention demonstrated “[t]he desirability of uniform treatment of containers used exclusively
in foreign commerce” and “a national policy to remove impediments to the use of containers as
instruments of international traffic.”39 The Court found that California’s tax “frustrate[d]
attainment of federal uniformity” with respect to these goals and policies.40 The possibility that
other states might impose similar measures further increased the threat to federal uniformity. 41
The tax also threatened U.S.-Japanese economic relations due to the possibility that Japan would
retaliate against the state measure—such retaliation “would be felt by the Nation as a whole.”42

        While the Court rejected similar “speak with one voice” arguments raised in Container
Corp. and Barclays Bank, the grounds on which it rejected these arguments would seem to
support a challenge to Md. Code Ann. 10-306.1. In Container Corp. and Barclays Bank, the
Court considered whether the impact of California’s unitary business method of calculating
taxable income impermissibly impaired federal uniformity.43 In Container Corp., the Court held
that California’s unitary business method did not impair federal uniformity as it neither
implicated delicate foreign policy issues nor “violate[d] a clear federal directive.”44 In holding




36
  Mass. Gen. Laws ch. 63, § 31K (subject to certain conditions, including (i) said payments must be deductible
under federal income tax law, and (ii) said payments must have a valid business purpose other than tax avoidance).
37
     Japan Line, 441 U.S. at 452-3 (internal quotations omitted).
38
     Id. at 452.
39
     Id. at 452-3.
40
     Id. at 453.
41
     Id.
42
     Id.
43
     See, e.g., Container Corp., 463 U.S. at 193.
44
     Id. at 193-97.


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SIDLEY AUSTIN BROWN & WOOD                                  LLP                       WASHINGTON, D.C.

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that California’s tax did not violate a clear federal directive, the Court first noted that no party
claimed that federal statutes preempted California’s tax system.45 The Court then noted that:

                      although the United States is a party to a great number of tax
                      treaties that require the Federal Government to adopt some form of
                      ‘arm’s-length’ analysis in taxing the domestic income of
                      multinational enterprises ... the tax treaties into which the United
                      States has entered do not generally cover the taxing activities of
                      subnational governmental units such as States, and in none of the
                      treaties does the restriction on ‘non-arm’s-length’ methods of
                      taxation apply to the States.46

The Court also observed that the Senate had attached a reservation to a tax treaty declining to
apply the federal policy to the states and that Congress had thus far avoided enacting legislation
“designed to regulate state taxation of income.”47

        In rejecting the “speak with one voice” claim in Barclays Bank, the Court similarly found
that “Congress implicitly has permitted the States” to use the unitary business method of
calculating taxable income.48 The Court emphasized the Senate’s reservation to the U.S.-U.K.
tax treaty, precluding application to the states of a treaty provision effectively barring use of the
unitary business method to calculate taxable income of U.K.-controlled taxpayers.49 The Court
directly contrasted the treaty provision on calculation of taxable income with the provision on
state tax discrimination, which explicitly applied to the states.50

        In light of these cases, a strong argument thus exists that Md. Code Ann. § 10-306.1
impermissibly impairs federal uniformity and impedes the government’s ability to “speak with
one voice.” Container Corp. and Barclays Bank indicate that U.S. tax treaties with foreign
countries may serve, in a legal analysis under the Foreign Commerce Clause, as evidence of
federal policies regarding taxation of foreign income. As the Court pointed out in Barclays
Bank, while U.S. tax treaties generally are not applicable to the states, many of these treaties
prohibit state tax discrimination. For example, the United States Model Income Tax Convention
of September 20, 1996 includes the following provisions on non-discrimination:

                                                     Article 24
                                               NON-DISCRIMINATION


45
     Id. at 196.
46
     Id. (italics added).
47
     Id.
48
     512 U.S. at 326.
49
     Id.
50
  Id. (“The final version of the treaty prohibited state tax discrimination against British nationals ... but did not
require States to use separate accounting or water’s edge apportionment of income.”) (italics added).



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                   1. Nationals of a Contracting State shall not be subjected in the other
                   Contracting State to any taxation or any requirement connected therewith that is
                   more burdensome than the taxation and connected requirements to which
                   nationals of that other State in the same circumstances, particularly with respect
                   to taxation on worldwide income, are or may be subjected. ...

                   ...

                   3. Except where the provisions of paragraph 1 of Article 9 (Associated
                   Enterprises), paragraph 4 of Article 11 (Interest), or paragraph 4 of Article 12
                   (Royalties) apply, interest, royalties, and other disbursements paid by a resident
                   of a Contracting State to a resident of the other Contracting State shall, for the
                   purpose of determining the taxable profits of the first-mentioned resident, be
                   deductible under the same conditions as if they had been paid to a resident of the
                   first-mentioned State. ...

                   ...

                   6. The provisions of this Article shall, notwithstanding the provisions of Article
                   2 (Taxes Covered), apply to taxes of every kind and description imposed by a
                   Contracting State or a political subdivision or local authority thereof. 51


Article 24(6) of the Model Convention clearly renders the prohibition on the specified forms of
discrimination applicable not only to the federal government but also to the states. Both the
general obligation under Article 24(1) and the obligation specifically governing, inter alia,
deductions from taxable income for payment of royalties under Article 24(3) articulate federal
policies that seem in conflict with Md. Code Ann. § 10-306.1. Further research would be
necessary to survey the available evidence in other tax treaties, federal laws, and regulations
supporting the existence of a clear federal policy banning state tax discrimination. The
preliminary analysis presented here, however, indicates that Md. Code Ann. § 10-306.1 is
vulnerable to constitutional challenge on the ground that it impermissibly interferes with a
clearly articulated federal policy.

III. TAX INJUNCTION ACT

        Under the federal Tax Injunction Act52 (the “Act”), suits for injunctive relief or
declaratory judgments finding state tax measures unconstitutional generally must be brought in
state court. The Act provides that “[t]he district courts shall not enjoin, suspend or restrain the
assessment, levy or collection of any tax under State law where a plain, speedy and efficient

51
  United States Model Income Tax Convention of Sept. 20, 1996, available at http://www.treas.gov/offices/tax-
policy/library/model996.pdf. See also, e.g., Convention between the Government of the United States of America
and the Government of Japan for the avoidance of double taxation and the prevention of fiscal evasion with respect
to taxes on income, Nov. 6, 2003, U.S.-Japan, art. 24; Convention between the Government of the United States of
America and the Government of the United Kingdom of Great Britain and Northern Ireland for the avoidance of
double taxation and the prevention of fiscal evasion with respect to income and on capital gains, July 24, 2001, U.S.-
U.K., art. 25.
52
     28 U.S.C. § 1341.



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remedy may be had in the courts of such State.”53 Although the Act’s text nominally leaves open
whether a suit seeking only a declaratory judgment that a state tax law is unconstitutional may be
brought in federal court, the Supreme Court expressly held in California v. Grace Brethren
Church that the Act “prohibits a district court from issuing a declaratory judgment holding state
tax laws unconstitutional.”54 The Court reasoned that “[b]ecause the declaratory judgment
procedure may in every practical sense operate to suspend collection of the state taxes ... the very
language of the Act suggests that a federal court is prohibited from issuing declaratory relief in
state tax cases.”55 While further research could be conducted regarding the Act’s narrow
exceptions (e.g., permitting federal actions by the United States to protect itself and its
instrumentalities), it is clear that a challenge to a state tax law by a non-federal actor such as
OFII generally must be brought in state court.

IV. OFII’S STANDING

         OFII is almost certain to have standing to challenge Md. Code Ann. § 10-306.1 on behalf
of its members. An association has standing to sue on its members’ behalf “when (a) its
members would otherwise have standing to sue in their own right; (b) the interests it seeks to
protect are germane to the organization’s purpose; and (c) neither the claim asserted nor the
relief requested requires the participation of individual members in the lawsuit.”56 Presuming
that the Maryland law affects the interests of one or more OFII members, OFII should meet the
requirements for associational standing. First, if, as we presume, the interests of one or more
OFII members are affected by the law, then these members would have standing to sue in their
own right. Second, the interests that OFII would seek to protect in bringing suit are identical to
one of its organizational purposes, namely, ensuring that U.S. subsidiaries of foreign
corporations are not subject to discrimination under U.S. law. Third, there is no reason why
either the purely legal claim asserted or the relief requested would require the direct participation
of OFII members. OFII is well positioned to represent its members.




53
     Id.
54
     457 U.S. 393, 408 (1982).
55
     Id.
56
     New York State Club Ass’n Inc. v. City of New York, 487 U.S. 1, 9 (1988).



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