Part I. Rulings and Decisions Under the Internal Revenue Code of 1986

exports. In granting U.S. Shoe summary judgment, the Court of International Trade (CIT) held that it had jurisdiction under 28 U.S.C. §1581(i) and that the HMT qualifies as a tax. Rejecting the Government’s characterization of the HMT as a user fee, the CIT reasoned that the tax is assessed ad valorem directly upon the value of the cargo itself, not upon any services rendered for the cargo. The Federal Circuit affirmed. Held:

1. The CIT properly entertained jurisdiction in this case. Section 1581(i)(4) gives that court residual jurisdiction over “any civil action . . . against the United States . . . that arises out of any [federal] law . . . providing for . . . administration and enforcement with respect to the matters referred to in [§1581(i)(1)],” which in turn applies to “revenue from imports.” This dispute involves such a law. The HMT statute, although applied to exports here, applies equally to imports. That §1581(i) does not use the word “exports” is hardly surprising in view of the Export Clause, which confines customs duties to imports. Moreover, 26 U.S.C. §4462(f)(2) directs that the HMT “be treated as . . . a customs duty” for jurisdictional purposes. Such duties, by their very nature, provide for revenue from imports and are encompassed within §1581(i)(1). Accordingly, CIT jurisdiction over controversies regarding HMT administration and enforcement accords with §1581(i)(4). Pp. 3–5.

2. Although the Export Clause categorically bars Congress from imposing any tax on exports, United States v. Interna- tional Business Machines Corp., 517 U.S. 843 ( IBM), it does not rule out a “user fee” that lacks the attributes of a generally applicable tax or duty and is, instead, a charge designed as compensation for government-supplied services, facilities, or benefits, see Pace v. Burgess, 92 U.S. 372, 375–376. The HMT, however, is a tax, and thus violates the Export Clause as applied to exports. Pp. 3–9.

(a) The HMT bears the indicia of a tax: Congress expressly described it as such, 26 U. S. C. §4461(a), codified it as part of the Internal Revenue Code, and provided that, for administrative, enforcement, and jurisdictional purposes, it should be

Section 355.—Distribution of Stock and Securities of a Controlled Corporation

26 CFR 1.355–2: Limitations.

The revenue ruling declares Rev. Rul. 70–225 obsolete because it is no longer determinative following modifications made by the Taxpayer Relief Act of 1997, as amended by the Tax Technical Corrections Act of 1998. See Rev Rul. 98–44, page 4.

26 CFR 1.355–2: Limitations. (Also section 7805; 301.7805–1.)