McKesson Corp. v. Division of Alcoholic Beverages and Tobacco

The McKesson Corporation (McKesson) (plaintiff) was a distributor of alcoholic beverages doing business in Florida. In 1985, the Florida legislature revised its liquor tax laws to correct a discriminatory tax scheme that gave preferential treatment to companies whose beverages were made from products grown in Florida. The revisions deleted the express preferences for Florida products and instead provided tax rate reductions for use of specific types of crops, all of which were commonly grown in Florida and used to make alcoholic beverages. McKesson paid the taxes without discount until June 1986, when it sought a refund of the excess taxes, claiming the tax was unlawful. After the state denied the request, McKesson sued the Division of Alcoholic Beverages and Tobacco and other state agencies (defendants) in state court, seeking injunctive and declaratory relief under the Florida and United States Constitutions, as well as a refund of the excess taxes under state and federal law. The trial court granted McKesson’s motion for partial summary judgment, holding that the tax scheme violated the Commerce Clause and enjoining future enforcement. The trial court, however, did not order a refund or any other relief regarding the previously paid taxes. The parties cross-appealed, and the Florida Supreme Court affirmed. With regard to the refund issue, the Florida Supreme Court found that the state collected the taxes in “good faith reliance on a presumptively valid statute,” and that a refund would be a windfall to McKesson, who likely passed the cost of the taxes on to its customers. The United States Supreme Court granted certiorari on whether McKesson was entitled to a partial tax refund under federal law.