Sotomayor Record Indicates Penchant for Protectionist State Tax Policies

July 16, 2009

Tenure on Court of Appeals Shows Harsh Tax Code Readings, Pro-Protectionist Rulings

Washington, DC, July 16, 2009 – As the Senate Judiciary Committee continues its third day of confirmation hearings for Supreme Court nominee Sonia Sotomayor, an analysis of her judicial record demonstrates the Second Circuit Court of Appeals judge has favored discriminatory state taxes that infringe on interstate commerce.

In Tax Foundation Fiscal Fact No. 179, “Past Sotomayor Opinions Not Encouraging for Opponents of State Tax Overreaching,” Joseph Henchman, Tax Counsel and Director of State Projects, and Law Clerk Travis Greaves examine two cases—Swedenburg v. Kelly and William L. Rudkin Testamentary Trust v. Commissioner of Internal Revenue—handed down during Judge Sotomayor’s time on the Second Circuit that appear to provide insight as to how she may handle important tax questions on the Supreme Court. The Fiscal Fact may be found online at

“Her reading of the tax code, when it fills in ambiguous or unclear areas, may be harsher on taxpayers and more favorable to the government, as seen in Rudkin,” the authors write. “She also has shown an inclination to approve the constitutionality of state regulations at face value, even in the face of evidence of protectionist motivations and consequences as in Swedenburg.”

One issue that the Supreme Court needs to resolve is the recent trend of aggressive actions by states to tax beyond their borders—in the case of Swedenburg, direct winery-to-consumer sales and more recently, efforts of states to collect so-called “Amazon taxes” from out-of-state Internet retailers. In Swedenburg, Sotomayor upheld a New York law prohibiting out-of-state wineries from selling in the state—a case eventually reversed by the Supreme Court.

“While a nominee’s prior voting record or political affiliation is no guarantee as to how they will decide cases as a Supreme Court justice, these two different cases may provide some insight into Judge Sotomayor’s judicial performance,” the authors conclude, noting that in the Tax Foundation’s June analysis of retiring Justice Souter’s tax jurisprudence, he has shifted from questioning states’ protectionist use of their taxing authority to a willingness to twist precedents to uphold such laws. “Judge Sotomayor, if confirmed, may start her tax law judicial opinions on the high court where Justice Souter left it.”

The Tax Foundation is a nonpartisan, nonprofit organization that has monitored fiscal policy at the federal, state and local levels since 1937.


Fiscal Fact No. 179 can be found at To schedule an interview, please contact Tax Foundation Manager of Media Relations Natasha Altamirano at (202) 464-5102 or

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