"The better to secure and perpetuate mutual friendship and intercourse among the people of the different States in this Union, the free inhabitants of each of these States, paupers, vagabonds, and fugitives from justice excepted, shall be entitled to all privileges and immunities of free citizens in the several States; and the people of each State shall free ingress and regress to and from any other State, and shall enjoy therein all the privileges of trade and commerce, subject to the same duties, impositions, and restrictions as the inhabitants thereof respectively, provided that such restrictions shall not extend so far as to prevent the removal of property imported into any State, to any other State, of which the owner is an inhabitant; provided also that no imposition, duties or restriction shall be laid by any State, on the property of the United States, or either of them." — Articles of Confederation.
"No State shall, without the Consent of the Congress, lay any Imposts or Duties on Imports or Exports, except what may be absolutely necessary for executing it's inspection Laws: and the net Produce of all Duties and Imposts, laid by any State on Imports or Exports, shall be for the Use of the Treasury of the United States; and all such Laws shall be subject to the Revision and Control of the Congress." — Article I, Section 10. US Constitution.
One of the many problems that prompted early Americans to scrap the loose association known as the Articles of Confederation was the economic inefficiency associated with allowing individual states to impose import and export tariffs. In the new US Constitution, Congress, not the states, had the responsibility for regulating interstate commerce.
The specific prohibition of interstate taxes by the Constitution is at the heart of the American federalism. The federal government has the dominant responsibility for international relations, while individual states take care of their own affairs focusing on the peculiar regional needs of their constituencies and relying on their own resources to do so.
One indirect advantage of such federalism is interstate political and economic competition. Those states whose wise legislation provides best for the liberty and happiness of their constituents will attract people and business. The prohibition against state import and export duties prevents states from avoiding difficult tradeoffs by passing taxes onto outsiders.
In Quill v. North Dakota (1992) the Supreme Court reaffirmed that the US Constitution granted exclusive power to the Congress to regulate interstate commerce and that individual states could not force companies in other states to gather state sales taxes. In that particular case, North Dakota could not compel the Delaware-based Quill corporation, that had no significant presence in North Dakota, to collect sales taxes on the office equipment and supplies it sold mail-order to the citizens of North Dakota. The ruling does not prevent North Dakota from taxing their own citizens for out-of-state purchases, but from forcing a particular means for collecting the taxes. Out-of-state companies can not be made tax collection agents. Only if a company has a significant presence in a state, can the state prevail upon that company to collect such taxes.
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