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The general rule of federal question jurisdiction does not extend to cases in which plaintiffs challenge the lawfulness of a state or local tax. In recent years, the Supreme Court has expressed its belief that this lack of a federal forum should not concern taxpayers, as the federal and state judiciaries are equally competent in deciding questions of federal law. Many observers have disputed this parity thesis, labeling it a convenient but dangerous myth. In the field of state and local taxation specifically, lawyers have expressed their distrust of state courts' willingness to protect the federal rights of taxpayers, especially when those taxpayers are domiciled outside the taxing state. While several scholars have explored the question of parity in other contexts, the empirical question whether state courts are systematically biased against taxpayers seeking the protection of federal law has gone largely unexamined.

This article offers a preliminary exploration. It presents a study of all reported state court decisions interpreting Public Law 86-272, a federal statute that provides businesses with immunity from state income taxes when they keep the extent of their contacts in the taxing state beneath a specific threshold. The study suggests that, at least as a prima facie matter, these decisions provide little support for the belief that state courts systematically disfavor taxpayers making federal claims. Instead, state courts appear to have interpreted Public Law 86-272 with a fair degree of consistency.



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