Whether granting unfettered deference to a State tax commissioner's decision to reapportion the revenues of an interstate business violates the Due Process Clause and Commerce Clause

QUESTION PRESENTED This Court has long held that State taxation of interstate commerce is only permissible where, among other factors, the tax is fairly apportioned to the entity’s activities in the State. New Jersey, like many States, has a statute that allows its taxation authority to order the reapportionment of revenue attributable to the State where the taxpayer’s method of apportionment does not properly reflect the revenue that is reasonably attributable to the State. Unlike other States, New Jersey applies a presumption of correctness to its Division of Taxation’s decision to depart from the standard apportionment methodology, and requires the taxpayer to demonstrate that the Division’s departure is improper instead of requiring the Division of Taxation to demonstrate why the taxpayer’s apportionment was improper. This leads to a “heads I win, tails you lose” system in which the Division of Taxation can take different departure approaches to different taxpayers to maximize New Jersey’s revenue, and the differing approaches will be affirmed in court challenges because of the deference afforded the Division of Taxation. The question presented is: Whether granting unfettered deference to a State tax commissioner’s decision to reapportion the revenues of an interstate business violates the Due Process Clause and Commerce Clause.