Mayo Collaborative Serv., Inc. v. Comm’r of Rev.

State Taxation

Mayo Collaborative Serv., Inc. v. Comm’r of Rev., No. A04-2190
(Minn. June 30, 2005)

A medical reference laboratory challenged the constitutionality
of a state tax on the gross revenues of health care providers. In order to
avoid "pyramiding" tax
liability, the state statute provided a resale exemption that permitted providers
to exclude revenues for services that would be taxed again after being resold
by other in-state providers. The laboratory argued that the tax imposed an unreasonable
burden on interstate commerce because it allowed an exemption for intrastate
transactions but not for interstate transactions. The Supreme Court of Minnesota
disagreed, finding the statute did not facially discriminate against interstate
commerce. The court also found the tax revenue exemption was consistent with
the Commerce Clause of the United States Constitution.